Less Insult From Injury

Dan Robinson's ordeal with his son's rare illness led Intuit to develop software to untangle hospital bills

Dan Robinson's son, Zane, was born in November, 2000, with a genetic disorder so rare that only a few hundred people around the world have it. In the first year of his life, Zane underwent open heart surgery and an operation on his stomach. He suffered a hernia, dehydration, and other conditions that required emergency care. He was in the hospital for a total of 60 days; the cost came to $1.2 million.

Robinson, then a 32-year-old engineering manager at Intuit Inc. (INTU ) in Mountain View, Calif., and his wife, Kelli McLaughlin, who had been an elementary school teacher, were overwhelmed. For six months they paid little attention to the medical bills arriving in the mail almost daily. When Robinson finally sat down with the file box of papers he had accumulated, among them were a $100,000 bill for Zane's heart surgery that had not been sent to his insurance company, threatening letters about charges he had never received, and dozens of "explanation of benefits" statements from his insurer that he couldn't match to any bills.

To keep track of it all, Robinson did what came naturally to him: He wrote a software program. "It was buggy. You had to be a software engineer to use it," he says. "I wouldn't have inflicted it on anybody else." Yet he was sure that many of those dealing with serious health problems needed something like it.

A WORLD OF FRUSTRATION

That realization, born of one man's distress, would eventually become central to Intuit's business strategy. It began with a new, well-received product, the Quicken Medical Expense Manager, which was introduced in 2005. The process of developing that software revealed to Intuit a world of consumer frustration. A medical system that is maddening, time-consuming, and expensive: It started to seem like a perfect opportunity for the company that examined the U.S. Tax Code and thought up TurboTax. As Chief Executive Steve Bennett says: "We are always looking for a large unmet need that we can solve."

In April, the $2 billion company announced a more comprehensive health-care initiative with UnitedHealth Group Inc. (UNH ) and others that Bennett hopes could one day be as important to Intuit as its $850 million QuickBooks business is now. It was a triumphant moment for Robinson, although he had no idea it was coming. His bewildering encounters with the medical system had, in the meantime, spurred him to make a career change that he had long been contemplating.

When Robinson first mentioned his business idea to colleagues in 2001, he was met with even less than skepticism: indifference. He had written StreetFinder, the first software program of its kind, for Rand McNally & Co. in 1995 and had worked on the personal finance software, Quicken, at Intuit for three years. Still, he wasn't surprised by the reaction. "There wasn't much thought about developing new products then," he says. "And I was an engineering manager, not a marketer."

Two years later, though, Intuit's culture had begun to change, especially at Quicken, whose growth had stalled as online banking lessened the need for software to manage personal finances. Peter Karpas, then in charge of Quicken Solutions Group and now chief marketing and product management officer, was young, creative, unbound by tradition. He wanted his staff to think of innovation as more than simply improving its core software program. Karpas helped set up a "green-light process" to approve, guide, fund, and sometimes kill ideas for new products. At each step, the employees were to answer one essential question to the satisfaction of a group of executives. After identifying several people, including Robinson, who "had that entrepreneurial spark," as Karpas says, he issued a challenge: "Find something that excites you, go forward, and answer these questions."

Zane's health troubles were well-known at Intuit. Robinson had missed work to care for his son and, later, to contend with the government agencies that provided services to the disabled. Partly because Robinson's desire to do something to help people with their medical expenses was so intense, Karpas initially regarded it as somewhat quixotic. When Robinson pitched his idea to Karpas over lunch in the fall of 2003, he received only a slightly more encouraging response than he had before: total uncertainty. "I didn't see or feel the big unmet need," Karpas recalls. "I felt Dan's need."

But Karpas agreed to give Robinson the time (half of his workweek for however long it took) and, a little later, the resources (including a partner, Kate Welker, who could help with market research) to build a case that his financial stress was not his problem alone. Robinson and Welker visited dozens of people in their homes to see how they handled all of the bills and statements generated by the health-care system. Their conclusions were that people would spend hours to get even a few dollars out of their insurance companies, and that they wanted some way to assert control at a time when their lives had been upended by health concerns. Based on Intuit's experience with Quicken, Robinson estimated that of the many millions struggling to keep up with their medical paperwork, a couple hundred thousand would be likely to use some kind of financial software.

Around the office, Robinson tried to sell his project at any opportune moment. As he says, "the first sentences of every conversation were: 'Health care is a $1.3 trillion business, and we don't have a piece of it. Health care is messed up. There ought to be lots of ways to make it easier, and people will pay for that help."'

"GET IN THE GAME"

By February, 2004, Robinson was ready for the crucial "proof of concept" presentation, after which only 18 of the hundreds of projects continued to receive funding. He won approval, which, he says, "was a huge surprise to everybody. Most people thought this was the end of Dan's experiment." For Karpas, the most convincing part of Robinson's talk was an 18-word statement of the precise unmet need his software would satisfy. It was: When I get a piece of paper in the mail, I will know what to do with it.

As Robinson worked full-time with more than a dozen employees to develop the software and marketing plan, he struggled with a difficult decision. He had applied to the University of Minnesota Law School and been accepted with a scholarship for the fall of 2004. Dealing with patient outreach groups and talking with Intuit consumers convinced him, he says, "that a lot of these people need a good lawyer, not just good software." His own legal disputes with the state of California over Zane's eligibility for various services and the presentations he made to Karpas helped him realize that he could be very persuasive. He left Intuit for school eight months before Medical Expense Manager was launched.

As Robinson predicted, the software was quickly adopted by a select group of people with serious medical problems; by Intuit's standards it was a modest moneymaker. More important, says Bennett, is "that it helped us get in the game." In November, 2005, Intuit appointed its first general manager for health care, Dan Levin, who had been vice-president for product management. He set out to find other companies to work with. "We have a very good handle on what we do well," he says. "It was clear we needed strong partners." Although details about upcoming products are scarce, the ultimate aim is to provide consumers with easy electronic access to all their medical information, whether it's held by insurers, hospitals, pharmacies, doctors, or employers. (Medical Expense Manager requires that information be entered by hand.) Intuit executives believe this could revolutionize health care, but, as with Quicken, success depends on the cooperation of all these institutions. The initial offering, due in mid-2007, is "version one in a multiyear plan," says Bennett.

Robinson says he is astounded by what Medical Expense Manager has led to at Intuit. He's in the Bay Area this summer working at a law firm and in touch with former colleagues. Kelli and Zane, "a happy, laughing boy whose health is great," he says, are with him. "I'm happy with my decision to go to law school," Robinson adds. "But I can't help thinking what would have happened if I had stayed."

By Susan Berfield

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