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Bootstrapping To $19 Million: Office Ally CEO Brian O’Neill (Part 3)

Posted on Wednesday, Sep 22nd 2010

SM: Based on the number of customers you have today, how many people have insurance companies laid off due to your technology?

BO: I have no idea. We have taken a significant amount of money out of the healthcare budget.

SM: I asked that question in a complimentary fashion. Good technology has effects on organizations.

BO: I feel bad sometimes, but we don’t sell buggy whips anymore. Things evolve.

SM: I don’t feel bad. Inefficient operations cost ridiculous amounts of money.

BO: Exactly. I think 17 cents of every dollar an insurance company makes goes toward administrative costs. If we can eliminate that waste of money, it will be a beneficial reduction of healthcare costs.

SM: Did you keep the same demonstration-oriented sales process to acquire more customers?

BO: Yes. St Joseph’s allowed me to use them as a reference. That made it very easy. They would tell our potential clients that we had saved them $4 million in less than one year.

SM: What was the competitive landscape at the time?

BO: There were only a few major competitors. WebMD used to process claims, and they eventually sold that off. ProxyMed was also a competitor at the time. We are probably responsible for  their going bankrupt.

SM: What was wrong with ProxyMed?

BO: All the other clearinghouses charged the doctors. I had a medical office biller call our office, and he would not believe me that our software was free and that we would charge the office for a paper claim only in the event we did not have a connection to a certain insurance provider. I drove up to meet with him in person, and he showed me a bill from ProxyMed for $8,700 a month to send claims electronically.

I went through the bill line and line and told him that if he sent the exact same claims through Office Ally it would cost him $2.75. He had eleven claims that we could not file electronically. We saved his office $100,000 a year.

SM: What about athenahealth?

BO: They are an HR and practice management system that sends claims to us to be cleared for certain payers. They are a billing company. They enter the bills and post the payments. In two more weeks we will be rolling out that feature as well.

SM: How did your revenue ramp from 2001 to 2010?

BO: Every year it has increased. In the past three years the number of doctors using our product has grown by over 30% a year. In Tennessee, for example, we have grown 330% this year. In Tennessee, AmeriChoice is the Medicaid for the state. AmeriChoice sent letters out to every doctor in the state telling them about our free service. That has driven a lot of growth. I am also the only clearinghouse in the country who will take a file from a doctor in any format.

SM: Do you take care of medical coding as well ?

BO: Yes, that is all built in. We also have payer specific edits. If an anesthesiologist sends a claim to Cigna, we know that Cigna requires the start and stop time of the medication to allow them to calculate the total medicine units. If a doctor forgets to put a start and stop time, our software will make sure the doctor is aware that Cigna requires it.

This segment is part 3 in the series : Bootstrapping To $19 Million: Office Ally CEO Brian O’Neill
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