PriorAuthNow Inc. quadrupled its business in 2021 – and should do even better this year after linking arms with the nation's largest IT network connecting health systems and insurers, co-founder and CEO Joe Anstine said.
It took years to get to this point, he said, but now that the startup has reached a critical mass, it can tackle a larger vision, he said.
After starting with automation of a vexing pre-approval process, PriorAuthNow's software can facilitate care-planning dialog that leads to lower costs and healthier patients, Anstine told Columbus Business First after the company announced a $25 million funding round.
"We’re only just now scratching the surface of this network," Anstine said. "I don’t see any end to the explosive growth we've had."
The Columbus startup was founded just over five years ago to automate prior authorization for surgeries and other procedures, a slow, frustrating fax and phone process for hospital billing departments. The company says its software cuts the work required to four minutes from 45, and cuts more than six days off the turnaround time for an insurance approval.
But it has to do more, Anstine said.
"If you’re just trying to automate a broken system, there’s only so much value you can get out of that," he said.
"What we’re trying to do is end the arms race," he said, between healthcare providers and health plans.
"There’s just diminishing return when you use friction as a cost containment tool," Anstine said. "They will both find value, once you create those connections and replace prior authorization with intelligent collaboration."
PriorAuthNow is analogous to CoverMyMeds, which was acquired for $1.4 billion after improving prior authorization for prescriptions. Decisions on procedures are more complex and unique to each patient, parsing clinical history as well as financial interests.
"It’s not transactional – it’s conversational," Anstine said. "We deliver coordinated connectivity. We reduce administrative waste associated with it and replace it with more meaningful interactions … that ultimately benefit the patient."
The startup's early years were a series of hurdles.
"There was the business challenge, and there was the technical challenge," Anstine said.
First, PriorAuthNow had to persuade government and private insurers that it actually is in their interest to pay for necessary procedures that prevent worse health problems down the line, while helping figure out what makes something necessary.
Next, it had to engineer interfaces with the many different IT systems of the plans, health systems and physician practices that refer to those hospitals. To be successful, the software has to integrate into all of them so the tools show up as part of a natural workflow – instead of logging out of a patient health record into another system.
"It was really key: We met the industry where it’s at on both sides of the equation," Anstine said. "There’s a reason why nobody before us tried to create coordinated connectivity with health plans. ... When you’re trying to stand up a network, it takes time and capital to get enough of one side of it up that the other side cares."
That effort got a turbo boost this year in a a strategic alliance with Availity, the largest health IT network connecting healthcare providers and payers. The 20-year-old private equity-backed company is based in Jacksonville, Florida.
PriorAuthNow's revenue comes from software subscription and usage fees from both sides.
Last year one-fourth of PriorAuthNow activity was earlier in the process, while a doctor was still in the room with the patient. Anstine wants that proportion higher.
"We see ourselves as somebody going at what we think is one of the largest opportunities in the U.S. economy, which is healthcare waste," Anstine said. "It enables us to create connections and allow these folks to collaborate in ways they never could before.
"We want to be able to impact every single patient in the country."
The company has grown to 70 employees and could top 100 in the coming year, Anstine said. It exited Columbus and Atlanta offices after going remote in the pandemic, but a large portion of its staff is in Central Ohio.
Eventually it could create a central collaboration space, but not require workers to report, Anstine said. The company has won recruits from companies with mandatory back-to-office plans.
Insight Partners, a New York City VC and private equity firm, led the most recent round. Also participating were Atlanta-based Panoramic Ventures and Silicon Valley's Health2047 Capital Partners LLC. Since inception PriorAuthNow has raised $57 million.
