My $8,000 medical bill

In the fall of 2021, I ruptured my Achilles tendon playing a game of pickup basketball. I absolutely don’t recommend tearing your Achilles! This small tendon connects the muscles in your calf to your heel bone and is critical to anything movement-related. I limped away from the game to the orthopedic surgeon’s office, where I learned that a full recovery would take up to a year, including surgery and months of physical therapy.

I was fortunate to have a good insurance policy so I didn’t give much thought to the cost. My surgery was successful, and I made good progress in my first PT sessions. But one Thursday, I showed up for PT and the clinic said I owed over $8,000 because my claim was denied. I felt confused, angry, and afraid — it was a lot of money!

The cast was a huge bummer, but a high point of this period was our dog Boka graduating puppy school

Over the next 2 weeks, I spent hours on the phone with the clinic, my employer, and my health insurance company while they pointed fingers at one another. Adding insult to injury, my insurance provider told me the only way to escalate the dispute was to physically mail them a letter.

It was a frustrating and time-consuming process, and I nearly threw in the towel.

But after a few weeks and many calls, I finally achieved a resolution: incredibly, it turned out I didn't owe $8,000, and the clinic actually owed me money — they misbilled me! My mind was blown. How could this possibly happen? What if, instead of spending hours fighting this, I had just paid $8,000 I didn’t owe?

The biggest problem in healthcare

My co-founder Adam and I originally started Thatch with a goal of building something to help cancer patients; we both lost parents to cancer too early. We knew we wanted to combine our experience to build something to improve the healthcare experience for patients like our parents. As we spent our first few months conducting about 100 conversations with cancer patients, we learned that the worst part of the healthcare experience patients cited wasn’t even the treatment itself — it was paying for it.

Many of the stories we heard sounded similar to my own recent experience with my Achilles. We dug deeper and learned that nearly everyone — not just those with chronic conditions like cancer — experiences similar challenges during their healthcare journey. About 70% of people say healthcare is the hardest thing to pay for. Over 100m Americans carry $1T in medical debt, now the leading cause of personal bankruptcy. Customer satisfaction rankings for health insurance are among the lowest of any industry and getting worse. It’s a total mess.

This experience is complex and painful for many reasons, but we were excited to take on the challenge and felt strongly about our mission: to make the experience of paying for healthcare easier and more modern.

As we explored how to bring that vision to life, we learned about these incredibly powerful — but complicated — healthcare payment rails which exist to help people save money on healthcare tax-free: HSAs, FSAs, and HRAs. We saw an opportunity to build an abstraction over these systems, making them easier and more accessible.

We also felt strongly that we’re the right team to solve this problem: Adam spent 4 years at one of the largest health insurance companies in the world, while launching a few bootstrapped SaaS companies on the side. That led him to Stripe, where he started and led customer engineering teams over the last 7 years. I started my career in healthcare as a cancer researcher at MIT. Then I founded the US sales team at a clinical software startup before working on the product team at a bigger Bay Area biotech. We knew we wanted to spend our lives working on this problem, and Thatch was born.

We were home in San Diego and Austin the day we incorporated; we had to settle for a virtual high five.

We believe that the solution to the shortcomings of HRAs, FSAs, and HSAs is rooted in financial technology and not healthcare technology. We built a team of folks from fintech backgrounds who are excited about applying the modern financial infrastructure developed over the last decade to a domain that hasn’t seen nearly enough financial innovation. We understand the worlds of healthcare and fintech well, and believe magic happens at intersections.

Early days: resolving billing and claims issues

From our conversations with patients we also saw a huge opportunity for impact while we proved out the ability to repeatably resolve billing and claims issues for patients, so we quickly built an MVP. Amazingly, we wiped $50,000 in medical bills off the books in a couple of months.

A young mom recovering from cancer treatment no longer had to choose between paying back the hospital or paying her mortgage.

Another person whose car was repossessed because of crippling medical debt could finally breathe again.

As we were experimenting and iterating on an MVP, we were also setting up health insurance for our employees. We quickly started seeing the problems businesses encounter paying for healthcare.

Paying for healthcare as business owners

I signed our team up for health insurance through our payroll provider, had a series of calls with their broker, then reviewed, signed, and emailed PDFs back and forth to get our health insurance up and running. This gave us a plan underwritten out of Texas (where I live). But as a fully remote startup, we hired our first few folks in California, Washington, New York, and Massachusetts — everywhere but Texas!

We quickly learned that health plans are still extremely regionalized. Coverage with the plan we selected was fine in Texas, but it turned out the same plan had poor coverage for out-of-state employees. Our Californian team members were sad to leave the Kaiser plan their previous employers offered, but providing a secondary plan with Kaiser didn’t seem feasible. Our plan didn't even have a single therapist available in New York. We explored bringing on a mental health benefit to provide coverage, but learned many benefits vendors won’t even sell to companies our size.

Things came to a head during our open enrollment, when we had a disaster: our payroll provider mistakenly deactivated health coverage for the entire team. These things never have good timing, and I learned this while I was in Tokyo on vacation with my family: someone on our team went to visit the doctor and was told they couldn’t accept our insurance. I spent hours on hold with our insurance company at 4am from a hotel room across the world, trying to get our plan reinstated.

Talking with other founders and benefits leaders, you see variations of these same problems everywhere, yet everyone seems to accept that health insurance is a pain and “that’s how it is.”

This seems crazy!

Solving the problems we experienced

We're excited to fix these problems both for businesses and their employees. We’re launching Thatch as an employee benefit, and we’re focused first and foremost on the employee experience.

Solving the terrible financial experience in healthcare isn’t going to happen overnight, and there’s a lot of work ahead of us to achieve our vision (more on that in the next section). But Thatch already helps employees with a number of painful experiences:

• Resolving billing and claims errors. Denied claims and billing errors are surprisingly common and stressful. Instead of spending hours on hold as I did, members can text directly with Thatch and our member advocates will work to resolve these issues on their behalf. It saves a ton of time and frustration.
• Saving for healthcare. HSAs are an incredible tool to save for your future and pay health expenses tax free, but they’re notoriously confusing and hard to use. We built a modern HSA that provides unique features like reverse funding, digital receipt tracking, one-click reimbursements, and more.
• Understanding healthcare spending holistically. The Thatch debit card and dashboard provide a system of record for all healthcare spending, making it easy for employees to stay on top of their expenses, understand their spending and savings habits, and plan for the future.

Thatch is currently a good fit for businesses who want to give their employees a better healthcare experience and help them save for care. If that sounds like you, we'd love to talk!

The long-term vision

Our vision is to be the default platform every forward-thinking company uses to provide great healthcare for their team.

Businesses shouldn’t have to deal with the frustrations I experienced selecting a specific insurance plan, administering benefits, navigating open enrollment, and dealing with issues that arose for our employees. We think the ideal experience for companies is to select a budget, press a button, and let employees choose their dream benefits experience.

Employees deserve a much more personalized experience, where they choose the health insurance and benefits they want, instead of the ones their employer chose for them. Saving for their future with HSAs and FSAs should feel easy and intuitive, not frustrating and confusing. If they run into problems, they should be able to send a text message to have it fixed.

This is what we’re building. With a simple interface that abstracts away the complexity of HSAs, FSAs, and HRAs, we’re creating a modern experience where the same system can facilitate everything from purchasing health insurance to choosing premium wellness benefits. And businesses can enable this experience in 5 minutes using Thatch.

By solving the broken financial experience, we believe we can greatly improve the physical, emotional, and financial health of millions of people. We’re very excited about what comes next, and would love to chat if you’re interested in being part of our mission.