Parachute Health digitizes DME

NEW YORK - Healthcare technology platform Parachute Health has raised $5.5 million on its mission to kill the fax machine for DME orders.

The company offers a standalone cloud-based website and an app in Epic's “App Orchard” that digitizes the process of determining insurance coverage, selecting providers, and sending and tracking orders for DME.

“The end goal for Parachute is to solve this problem for patients of not getting the equipment they need when they need it,” said CEO David Gelbard, who launched Parachute in 2016 after his father, who was recovering from back surgery, never received a walker that had been ordered for him at discharge. “With Parachute, there's no question they'll get that equipment. If we can solve that problem across the country, we'll be incredibly successful.”

To date, Parachute says it covers 60% of the healthcare market in New York and, with minimal effort, has grown a presence in more than 20 states.

With its new funding, which includes investments from former execs at United Health Group and McKesson, Parachute plans to hire “implementation teams” to grow its presence nationwide.

“Our main competitor is inertia and the fax machine,” Gelbard said.

Parachute has first targeted DME orders, but it also plans to use its new funding to launch additional healthcare products and services.

“Nearly every post acute-care product and service comes across via paper and fax, with the exception of prescription drugs,” Gelbard said. “This puts DME at the cutting edge across post-acute care right now. It's also one of the more complex markets, with tens of thousands of products and thousands of insurers.”

Parachute charges providers a per-transaction fee to use the platform, but that's not a difficult sell, Gelbard says, when you consider that providers like Landauer Medstar, a beta partner, have been able to turn their businesses around using the platform, even in the face of reimbursement cuts.

“We've reduced faxes and phone calls by 80%, we've reduced order abandonment from 40% to less than 5% and we've seen an increase in productivity on our order verification team by 20%,” said Tony Gonzalez, regional vice president at Landauer Medstar in Manhasset, N.Y. “We've seen an increase in co-pay collection rates of 25% to 30% and we've seen denials drop by 1% to 2%.”

QMES, the parent company of Landauer Medstar, has now adopted the platform in other DME businesses in its portfolio, and in January alone, they had processed orders for more than 11,000 patients using Parachute.

“We're solving a real problem—a real choke point—in the market,” Gelbard said.