Erich Graham got injured playing hockey a few years ago at age 24, and like a growing number of 20-somethings will be in the age of Obamacare, he was on a high-deductible health insurance plan. He knew he’d have to pay for an expensive MRI, so he called different clinics to try to shop around for the best price.
He learned the hard way a basic lesson in the health care market: It’s next to impossible for patients to learn the costs of procedures.
"Doctors won't actually tell you the price of a procedure until you already have the bill in hand," he says. "It's like looking at apartments, checking out the amenities, meeting the landlord, signing the lease, and then finding out what the rent is."
Graham, 27, and co-founder Greg Tobkin, 28, are now working to launch a startup called Doctible (that's the working title, there's another company already called Doctible doing much the same thing) that aims to bring new transparency to the health care market, and make it easier for patients to shop around for dentists and doctors in their price range.
Sites like ZocDoc and even Yelp already offer patient reviews, but the founders of Doctible want to ask people to submit their actual bills for procedures done by health care providers in their neighborhood. Someone could come to Doctible, look up their ZIP code, and view the out-of-pocket price for specific procedures at different providers along with a rating of the actual quality of care (based on patient reviews). The company Castlight Health, which has raised $160 million in venture capital financing, provides a similar service for employers and their employees, but not for the general public.
"This will definitely exist in five years, whether it’s us or someone else who does it. There’s too big a need," says Tobkin, who notes that health insurers, patients, and doctors will all have more incentives to cut the costs of care under the new health law.
The duo was among the first five graduates of Cornell Tech, the closely watched graduate school program that will be the cornerstone of New York City’s new tech campus planned for Roosevelt Island. They formed the idea behind Doctible as part of completing their master’s program and presented the startup project at the school’s open studio event in December, held at its temporary base inside Google’s New York City office.
Now that Tobkin and Graham have graduated, they are hoping to work on Doctible full-time. They're currently seeking initial seed funding, space in a New York City startup accelerator, and advisors who are familiar with the convoluted world of health care pricing. They have a prototype site, but no live users yet, and will surely face large barriers prior to launch. Crowdsourcing anything useful—and particular information that is hard to get—must overcome the "chicken-and-egg" problem of getting a critical mass of initial users. Tobkin says they will initially focus on specific procedures and specialties, such as Lasik and dental care, for which patients are sometimes the most price-conscious.
Cornell Tech dean Dan Huttenlocher says that Doctible is a good example of the entrepreneurial environment in the new program, which aims to "reinvent" graduate-level tech education with a practical focus that bridges the traditional divides between academia and industry.
The school wants to give student entrepreneurs the resources and expertise to succeed in startups after they leave school, without duplicating what’s already widely available (such as forming yet another incubator program), he says. Startups that come out of the master’s program will generally be at a "pre-seed" stage. And unlike Stanford’s recent controversial decision to invest in student startups, Cornell won't take an equity stake in companies that form (licensing intellectual property is a different matter), Huttenlocher says.
The Cornell Tech program is growing slowly. At the time of the Open Studio in December, it had 30 students, six post-doc researchers, and 10 faculty members. It will also be exciting to see how Doctible does in the future, both because it's a good idea, and also because it's one of the early startups from the city's big push to build its reputation as a hub for innovative new companies.