A Web Design Entrepreneur Has a Hit with Health Care Consumers

Every entrepreneur has a story about the moment he conceived his business idea. Mitch Rothschild’s came after he ruptured his Achilles tendon playing basketball. As he lay on the operating room table waiting for anesthesia to take effect, his surgeon said, “I’m excited I get to do this operation. I don’t get to do that many of them.”

As he faded out, suddenly concerned that he was going under the knife of a newbie, Rothschild says he asked himself, “How did I not know this?” As he recovered (from a successful surgery), he realized he hadn’t known about his surgeon’s lack of experience “because there was no good source of data about doctors,” he says.

Though Rothschild had been running a Web design and search engine optimization firm and had no healthcare industry experience, he launched Vitals in 2008 in New York to create that source of data about doctors. Over the years, with investment from athenahealth, Vitals has evolved to become a business that aims to bring healthcare system transparency to consumers. Its website provides patients, employee health plans, and health insurance companies with cost, quality, and accessibility information that allows them to shop for healthcare as they would a car or airline flight.

In the last three years, Inc. magazine ranked Vitals among America’s fastest growing companies; it has entered the ranks of the top healthcare websites like WebMD, Livestrong, and the Mayo Clinic; and it has helped upwards of 12 million people find a doctor. More than 25 insurance companies in more than 20 states (and counting—Rothschild says a new one joins every month), now use Vitals to provide information to employees who get benefits from the employers they serve.

Rothschild says it wasn’t as hard as you might expect for a Web design guy to break into such a complex and bureaucratic industry. “Consumer-facing healthcare tools have been a decade behind every Web and big data innovation in the U.S.,” he says. “When we bring stuff that was really hot in 2008 and 2009 to healthcare in 2014, it’s like we’re Magellan. Healthcare needs more people like me.”

Indeed, Rothschild says a big reason his business has done so well is that “there is madness” in the healthcare system. “You get a procedure and you have no idea if your bill is going to be $300 or $3,000. Doctors go out of their way to not tell you about themselves. Once this information becomes transparent, you’re creating a marketplace.”

A platform like Vitals means that “a guy who’s not good is not going to survive,” he says. “We tell you the quality of the doctors, the patient ratings, and the cost of seeing that doctor.”

Members—consumers who are enrolled in one of collaborating healthcare plans—pay nothing to login through their health plan and get information about prices and procedures to make intelligent decisions. Vitals’ data enables them to discover, for instance, that they can save a lot of money by going to their local imaging center instead of to the hospital their surgeon referred them to for an MRI.

Rothschild says Vitals is able to provide that information because its APIs pull that data from the Web—doctors and dentists’ own websites, hospital websites, physician certification boards—as well as from its partner insurance companies. “We suck it all in and we normalize it,” Rothschild says. Anyone can use the public-facing platform to search for information about physicians. But when a member is logged in, she can see the rates her insurer has contracted with providers, her cost savings options for various procedures, where she stands on her deductible, the number of services or appointments that her plan covers, and other stats.

Rothschild says the Vitals formula is the same one that has worked for other data aggregators like Kelley Blue Book or Yahoo!: “Have the best big data out there, make it easy to use, offer decision support, and allow user feedback.”

Vitals’ revenue comes from healthcare plans, providers such as physicians who pay to have their profile appear at the top of search results, and pharmaceutical advertising. One example of how Rothschild’s brainchild seems to be printing money for him and his investors is a recent deal: “We have a ‘contact us’ page on our website like most companies do,” he explains. “A tiny Texas regional health plan filled out the form.” His team signed a contract with the plan 60 days later.

“I’ve never had a business before where someone filled out an online form and I made a $1.2 million sale,” he says.