Interview with Dr. Karun Philip
It will be great if you could give me a brief background about your company as to what you do and you know, what kind of value proposition do you have to deliver in the medical practice management field? If you could give me a brief background about your company, we can take from there.
Alright. Tranquilmoney was
incorporated in 2001, based out of New York. We got new investors and we acquired a company in India that I earlier owned
which did you know, back office software development and business process
outsourcing work in India for US and European clients. So our strategy was not to move jobs
from our company who happen to be in India. We created a platform that allows teams to work within our
client's company along with teams that we provide in global locations. Our first
major client was Citibank who wanted to move their loan processing to their own
offices in India, Sri Lanka, Philippines from European branches. And that's
when I built the software -- in 1995 -- and then used it for companies like UPS and
then McKesson Corporation, Prudential securities. And then Costco Pharmacy.
Costco and Prudential Securities were our first big clients, and then McKesson Corp. Then we decided that were all *pharmacy* revenue cycle management. So we decided to focus on pharmacy revenue cycle management. Because by then developing a global workforce was commonplace and we needed to specialize in the vertical. So Costco was starting to open pharmacies in all of their stores. We had 12 stores when we started with 12 pharmacies and 12 of best stores wouldn't be started. And then now they have over 500. So that provided us a lot of our growth over the years. But at the same time, instead of becoming too dependent on one client, I started working with physician practices again, back in around 2001. And what we did in pharmacy was initially I had 250 employees in India because paper was scanned at profitable. And then we would we would put it through a double key entry process. My PhD was in intelligent character recognition using neural networks, but that doesn't give you a hundred percent. So I came to the conclusion that we already have the hardware for AI. It's, it's in human beings, it seems the brain of human beings. So I have the best hardware available at a low price anywhere in the world. I just have to develop the software to control the workflow and give them a structured work process to follow. I call it Managed Natural Intelligence.
I have PhD in AI, which I used to recognize the heart wall and CT images and develop a finite element models so that I can figure out how much, how well a patient's heart is doing. And I got pretty good results. Well, the best in the industry at the time, but artificial intelligence will never be 100% perfect. So I couldn't go to the idea to let you know, you start with manual, then let AI help and then you manually correct. So it's a, it's you can go around that cycle as many times as you need. When, when it came to recognizing characters for financial transactions, we couldn't do with less than a hundred percent. So the old method of which IBM invented was two people see the same image and enter the same data. If it matches, it goes through. If it doesn't, it goes back to the same process.
So when we started with paper intensive processes that the pharmacy used to handle, I made sure that we work with all of the players. So over the years, we helped convert the pharmacy system to handle both paper and electronic formats of all varieties.
I decided that since pharmacy was too small a focus area, we should take up physician practices as well. When it comes to physicians practices, there is still has a lot of paper. So right now we're doing the same thing. We back up the paper or electronic and proprietary formats and then convert it to a standardized format, which is called HL7. That's the industry standard. So and then we built the software. I got it certified as an HR product. That was also those common things like online appointment scheduling for the doctors as well as templates to help them diagnose and decide what procedure to do. And then the system will electronically or paper bill. And then when the payment comes in, we will, if it comes in electronically, we'll take the electronic data and each person's electronic data is slightly different also, although they follow a standard called the eight 37, the custom fields. So each, each pair uses it differently. So we built an expert system, which has also artificial intelligence of a different time to to put in the rules that each care uses.
For each insurance plan, we put the contract details in our platform. But the plans have the option of changing the contract sometimes without informing the physician. So our software will capture that. And then we'll try and confirm with the insurance plan and we'll report to the physician. But the plan has changed. So if you want to renegotiate with them, then this is the documentation you need. So it's software and, and services like if I give someone, there are software providers who give the physician software and then they have to operate it. And then there are billing companies that use whatever software they have and then do the billing and follow up. Now I view it as complete business process outsourcing, including software. We give away the software for free and we charge a, either a percentage or a per claim fee depending on the state or different rules about it.
And we only get paid a small percentage of what the physician receives from the insurance companies. And say for example, I mean our, our percentage varies greatly depending on the specialty or if it's a flat fee or depending on the number of cranes, et cetera. But what we get is a small fraction of increase in collections that the physician receive. So it's not this free software. It's better than free software and services because we're, we're not focusing on getting rid of doctors, employees. We're creating a global team who can use software that will create a joint workflow using people anywhere in the world to work for that, whether it's one physician or a thousand, it doesn't matter. We can create teams of any size because this software is proprietary. We developed it ourselves and we can hire as many people as we want.
We have a formal training program. We give a certificate to people who grips. We're a training program and we have experts that will work for the doctor who know how to code in each specialty and so on. So it's not just getting rid of someone in the us and hiring someone in India. It is adding more people to the team. Your current team and the person who's going to be paying for it is eventually the insurance company will have to pay whatever they contracted to pay. We do not allow physicians to submit project and train. So the insurance companies like us too because when it comes through us, we've already collected the evidence, but the procedure actually took place. So we feel we're addressing all the, the points of gain and by converting data formats from one to the other, we start up doing it manually, but we automate it over time.
And the price doesn't change. It's the same because there is a cost to manual labor and there is a cost to developing software so it balances out. But over time, if we scale, we, if we scale up, there are a million doctors. So my goal is to serve at least a 999,999 at them. So we need to automate as much as possible so that we can scale through working with everyone. Now, some people may have their own software or some third party software and we're happy to work with that. They don't have to change anything. We will interface with whatever they have. They can, other billing companies or software companies can partner with us. And they can provide their components and use whichever of our components that they want to use. So we're totally open about partnering with other vendors in field at the same time.
It's a doctor who's been around for it took a long time, eyes on the paper documents will help them convert or whatever he has. And you be, you can continue to use paper and within 24 hours that data will be electronic. So we have a bunch of options. I mean, you can, you know, for the meaningful use, you get a benefit from either the government or the insurance companies. And so we can prove that there's meaningful use of the software. Many, many doctors today are giving up private practices and joining the hospital hospital or big group. But what happens is they say they're going to pay, you say $240,000 a year, but then there's a clause in the same that if you have collections go down, then your salary goes down. And then these hospitals, they focus on their own high dollar billing for whatever specialty you go in and say operation or some complicated procedure. And the physician would just get a hundred dollar reference fee. They don't follow up on the collections that a hundred dollars, whereas it's important because the doctor will see a thousand patients and a hundred dollars each. So he has to collect every penny to make a decent living. And so we do that just like we did in pharmacy where the average claim is $40 that is owed by third party insurance. And we started with manual and over 20 years we've made it almost a hundred percent electronic.
So how do you really create this balance when it comes to innovation and simplicity, ease of use, seamlessness? How do you really maintain this balance in inside yourself?
You're absolutely right. And there are two ways we handle that. One thing is that everything we build has a customizable user interface. So when we set up for physician, we don't show him all the options are available, but he will have a customized UI that focuses purely on things that he does most often. The second thing is that some doctors don't even look at the software. They just run monthly reports or weekly reports or daily reports and they'll get them by email in whatever format they want. So by they do not have to know that the software has so many options.
It's a combination of those two. I mean, if they want something new, we develop that. We customize what we have already or would charge $25 an hour if it requires changing our software code and it's our code so we can modify it to anything that each doctor wants. But when we modify, if we add a feature for one doctor, it become available optionally to all the other doctors.
Your system provides the option for the doctors or the practices to really you know, create a seamless proposition for the data unit that pine menace that claims the skid dealing, the, you know, the custom reports, the chalk module dashboards and messaging and the patient odorless belt. So the data that's contained in these kind of features, how do you secure that data? How do you create a system which is combined to their regulator system out there? Regulatory you know you know, options out there. So it'd be great if you could talk to me about the security and the regulators.
Yes. So we have been audited in order to get a certified EHR status. Our servers hosted professional hosting platform where to get into the server, you need a hand print access. We implement a 128 bit security. You can access it through any browser, but if you would like, we can limit it to the specific IP address that that comes from your office. We set up a virtual private network, if you'd like. But basically if you just want a little bit of security, all you need is secure web access to a secure browser and a password. You can also set up multiple more levels of security yourself. Or we will do it for you.
So can you give me an example here, a case study or a success story where you helped your clients in obtaining what they wanted. Now I completely understand that you might not be able to name the practices name, but Hey, you know, what I'm looking for is a before and after scenario, some of the challenges that your clients face before the collaborative with you. And how did you really help for the solution?
Yes. I can give you one specific example, but it's very specific to New York. New York state has a Workers' Compensation Board, which arbitrates the workers' compensation claims. So we were the first to integrate electronically with the Workers' Compensation Board. So for the doctors, we started the New York workers' compensation revenue cycle management. We built electronic interfaces to the Workers' Compensation Board and he went from getting paid next to nothing, to 99.9% collection.
You know, people do work for compensation only because they have to, if at all. And usually they don't get paid because the insurance administrator just gives some excuse and doesn't pay. But in New York, if you file with the Workers' Compensation Board, then they act as arbitrators. What we do is we collect the whole reimbursement contract for each insurer, and find out who hasn't paid the contracted amounts. We send the physicians practice a report for each of the plan administrators, which they email or fax to each of them.
And if they still don't pay even after agreeing to pay, we have an Attorney Portal. The physicians attorneys can download the documents they need for the brief, and present it to the judge. The insurance administrator has to dispute it, or pay it, or agree on a settlement.
So the workers' compensation appeal process of New York state takes income from what was zero, to a hundred percent. And so for many other doctors in New York, we helped them take on a new line of business, which is workers' compensation. Because from getting zero dollars a claim, they can get at least as much as Medicaid pays, for instance. Another example is what is called the Major Medical insurance plans, that most of us take. The increase in collections in one case was 1000% in workers' compensation. It's 10 times of what they used to collect.
But in Major Medical, our average increase in collections is about 40%. Sometimes they say "we didn't get the claim" or they just pay less than the contracted amount. And unless you do the accounting and reconciliation, you don't know which plan wasn't paid or which claim was paid less.
But most of them, if you do the accounting party and send them the report, they'll pay if you get, if your data is accurate. Some of them it goes to court even from major medical. But it, I mean the court, if it goes to court, it ends up in a settlement that, you know, the attorneys either side don't really want to drag it out. They'd come to a settlement and our data is 100% accurate. So 40% is the average increase of a normal physician that we provide. And again, our rate varies from 2% to 18%, but the average would be about 10%. Which is a fraction of the increase in realized revenue.
Talking about your company now, what would you say are some of the factors that differentiates your company? Puts you ahead of the competition. Of course, being in the business for so long and having copped a unique niche for yourself I believe is a strong point of differentiator, shift differentiation. And then of course the team and you have years of years of experience in this field. So I believe they experience it and they expertise are two of the major points that differentiating. But any of the point that you mentioned or maybe you wanna elaborate on kind of the experience?
I did my PhD and then work for Tata Consultancy Services ("TCS"), which is the largest software company in India. And then I started my own business. I could afford to do these things because I'm from a family who could financially back me. And we;re one of the largest groups of family owned companies in India, I'm the only one in the family who went to the U S and became a US citizen and started a US company. But the family companies include MRF Ltd, which is the largest tire company in India, and the 12th largest in the world.
We own the largest circulation newspaper in India. We have coffee, tea and rubber plantation, large sizes. So I could have just sat on my back and, and done nothing. But I went to the top one of the top engineering colleges in India and I'm interested in technology.
And I decided to go to the U S and then I fell in love with the US so I wanted to stay there, and at the same time keep a connection, keep my connections in India. And so we are backed by billions of dollars of the family network of companies. I've never taken any money from my family yet. This company grew from its revenues. Our first clients were happy with our willingness to customize the software to their needs, so we became highly recommended. So I mean that if I want, I have extra capital -- my part of those billions. So we are financially very stable.
One other question that I had was about the future of the company.
When it comes to the next 12 to 18 months, what would be the next big step that
your company would be taking?
Well there was football culture, Notre Dame coach Lou Holtz. He said: "First be the best and then be the first." I think with physician practice management, we are now the best. And so from 2020, I started working on becoming the First.
I've never done sales and marketing. My clients just came to me, but now we have a sales and marketing budget. We have publicity, we have people on the ground going to doctors offices. And there's 800,000 of the million doctors used, still have independent practices. They're all selling out and joining hospitals. But then they think they're going to get a $240,000 salary, but they end up earning a hundred thousand or less. And they would like to and they are allowed to by contract, continue their private practices. And over the next 12 to 18 months, I'm going to be focusing on growth. We have everything working and we took our time to get it to work correctly in property and fast. So we're cheaper, better, faster than anybody in the market, but what we haven't done with sales and marketing. So that's my goal for the next 12 to 18 months.