For the past few years I have had the privilege of living in Silicon Valley and building the future of health information.

My first year in the valley was spent as an early employee at an EHR company called drchrono. I was lucky to do that and spend all my time talking to over 20,000 doctors across the country, mainly about their electronic health record but also about their electronic billing systems.

It was mind boggling to me how broken the information exchange in this space is. Most doctors have absolutely no idea what they charge per visit because each insurance company has their own contractual rate with the doctor.  So with over a 1,000 insurance companies and 900,000 docs and over 300,000,000 patients this information is an absolute mess.  This is something I learned at drchrono that doctors have no idea what they charge for a visit and it blew my mind.

I also found out that before a doctor can actually perform a procedure they need to contact an insurance company just to make sure they will actually get paid. For every procedure. On every patient. Consider the complexity and urgency of even common procedures, such as childbirth. The necessary transactions are staggering.  In healthcare parlance this is called a healthcare eligibility query.

In an age where we can process nearly every transaction online healthcare eligibility continues to be driven by 30 minute phone calls. Doctors, pharmaceutical companies, labs, imaging facilities and more hire full departments to make these phone calls to find out: can this patient get this injection, will they be covered for that, or can this patient go and get this diagnostic lab that they want because they might be pregnant.

Last year alone there were over 2 trillion health care eligibility queries.  Each procedure may have up to five.  All of this results in phone calls and paper work, and just information all over the place with health insurance companies.  That’s how Eligible started.

When I left drchrono,  I wanted to build my own company based upon eligibility. Coming from there, I thought the market was one-sided, driven by the needs of the medical professionals.  However, I found out that the market and the opportunity is actually much bigger than just doctors. People, you and me, we make eligibility queries all the time.  Think about the last time you had to have surgery or someone in your family needed to go under anesthesia.

Luckily, unlike most of digital health, this isn’t a chicken/egg problem. We don’t need to run around begging the insurance companies to open this information up to us electronically. In 1996 federal protocols were published and every insurance company was required to comply.  Each of the insurance companies have spent millions of dollars complying over the past 10 to 15 years, but unfortunately those standards were built in 1996 and they do not take advantage of what it means to be in 2013.  The protocols were designed for mainframes and a cloud-less world including dial up modems, SOAP APIs, X12 EDI interfaces, and yes, FAX machines.

Since the insurance companies have invested so much money and as of today the government mandates them, Eligible has decided that, for now, we have to leave the mandated standards as is.  However; we have built a simple solution (namely, layers of REST apis) on top of them so that all different types of health care companies can build real time eligibility into their systems just as fast as they would with the protocols of today’s technology.  Like the internet, we think getting this data out of the hands of X12 consultants/gurus and into the hands of every developer intersted in digital health will allow for innovation we can’t fathom today.

In terms of the workload and costs we are cutting: integrations like this used to require an engineering team with EDI consultants, integration consultants, HIPAA consultants, and at least 9 months of initial implementation time (not to mention the constant upgrades/maintenance to keep up with new regulations, etc) and now they are taking one engineer and a few hours of development while Eligible handles all the connections, data standards, and compliance in the cloud.

One of our biggest customers is Kareo.com a practice management system for 15,000 doctors across the country. We were able to land this customer with no marketing and no “sales” pitch.  They found us via google during a company hackathon and were able to implement us in under three hours.  More customers include pharmaceutical companies, genetic testing companies, appointment scheduling apps, patient check in kiosks, and even some startups in our current class @ Rock Health.

We’re adding rocket fuel to an existing massive market.  Big companies, companies with over 2 million people that come to them every month are using our system to check to make sure that those people have health coverage for the services they need.  Everyday we’re processing real time healthcare transactions to over 700 health insurance companies in all 50 states.

*Special thanks to Geoff Clapp for reading drafts of this.