An Interview with Rachel Mertensmeyer

Contributor: Beverly Bradway WG ’91
To learn more about Beverly, click here.


image001.jpgRachel Mertensmeyer is CEO and Founder of RexPay and an experienced marketing and brand management professional.

Q: The stated mission of RexPay is to “rescue patients from medical bill mayhem” by creating a way for patients to centralize medical bills and make payments.  How did the idea come about?

A: A few years ago while living in New York City and working at Unilever in Brand Management, I suffered an injury that left me with 38 medical bills and $10,000 of debt across 11 providers.  It was a frightening and difficult time, made worse by an ongoing stream of bills, service statements, insurance letters, and duplicate notices.  It was hard making sense of it all — which ones to pay, what to pay, and what insurance covered.  Furthermore, I wound up needing $10,000 to cover my share and financed it with credit cards - at 26% interest!    

Getting through this was a real challenge. I was spending hours on the phone, constructing elaborate Excel spreadsheets for tracking purposes, and managing stacks of information with priorities that were unclear. This is what led to my “aha moment.”  I had to find a way to help patients centralize medical bills, offer guidance on process and payments, and eliminate the unnecessary complications.    

Q: What did the early days of RexPay look like? And, why Phoenix, Arizona for the company headquarters?

A: Six months after my recovery, I moved to San Francisco and started the business.  I joined an accelerator called Launch Pad Digital Health and committed to learning as much as possible, validating the RexPay concept, and defining the value proposition (it’s relevancy, the potential market benefits, and product differentiation).  As my time with the accelerator was wrapping up, I was on a flight to visit family in Arizona and found myself seated next to a retired Silicon Valley CFO, Al Castino.  Our conversation began on the topic of music but evolved to the topic of RexPay, my start-up.  Al became my first investor and remains engaged as an advisor on strategy, finances, and operations. 

As for “Why Phoenix?” Things started coming together quickly after meeting Al.  He and I attended tech summits within Phoenix, looked at available support/talent resources within the city, considered the climate for small business and tech, and concluded, as the sixth largest metropolitan city in the U.S., Phoenix actually offered a great ecosystem for what we needed to accomplish. 

Q: Was working with an accelerator a good investment? How was your effort shaped by the experience?

A: Working with an accelerator was a great investment.  I was eager to look at the concept with the help of experts.  Once I had identified Launch Pad as the right resource, I applied to their program, paid an upfront fee, and just settled in to learning as much as possible. The first month and a half was spent in class and doing homework every day.  I had never founded a company, had no background in healthcare (with the exception of my time as a patient), and I had plenty to learn.  My advice for others considering a start-up venture is to identify an accelerator that offers the best fit for the kind of company you are creating and leverage that time to your advantage. It was invaluable for me.

Q: Where are you today in the development of RexPay?  When do you expect to see first revenues?

A: We started RexPay in February 2018. Today, we are considered a seed stage company.  The first version of our product is ready to go, and our first customer is launching in September 2019.  We are also planning to make the product available to the public in Q4 2019. Based on our plans for rollout, we expect to be cash flow positive by 2022. 

Q: What is your typical day as a founder?

A: The start of my days is the same.  I use early mornings to set strategy and have quick meetings with my Product and Customer Success teams, but, after that, every day is different!  Some days I am focused on fundraising and other days my focus is on operations, marketing, or client relations. With that said, I’m always close to the product.

Q: What has been the most challenging part of your start-up efforts? 

A: Fundraising has been the most challenging part.  This is the first time I have built a company, and I don’t have a natural network of individuals for early support.  Furthermore, connecting with people who may have investment interest takes real time and legwork.  Additionally, I’m a young, female founder which presents its own set of challenges.  Less than 4% of venture capital funding goes to female-led companies right now.  Fortunately, persistence has paid off, and we just closed a pre-seed round of $825,000 with angel investors.  And, now that we have a finished product and our first client is ready to launch, we will start raising our seed round of $1M-1.5M to continue our growth and expansion.   

Screen_Shot_2019-10-11_at_3.15.06_PM.pngQ: You mentioned your launch in September, 2019.  Who is your first customer and why?

A: Our first customer is an OB/GYN practice.  Since having a baby is often the first time a woman experiences layers of bills across multiple specialties, it’s a great place to start.  Specifically, research confirms that most deliveries generate 20 medical bills across 5 providers and roughly $8-9,000 in out-of-pocket costs.  In addition, Athena Research shows maternity specialties have the third highest payment default rates in specialty medicine.  Furthermore, we’re seeing that 70% of  Millennials are delaying payments, believed to be a function of bill-paying inconveniences as well as realization of their broader existing debt.  So, we are excited about our launch and anxious to see how RexPay supports this group of patients and their providers.  

With success in this first phase, our plan going forward is to provide support in a way that someone who uses RexPay (in this case for a maternity experience) continues to use the app to manage and pay all of their medical bills.  It’s a platform that has ‘stickiness,’ and we think our business will grow exponentially as these early patient adopters continue to use it for other medical bill needs and bring on family members over time.  RexPay provides simplicity, clarity, and support — simplicity of payment, clarity of information, and support on financial resources for large out-of-pocket costs.  There is nothing else like it on the market today. 

Q: Are you set up to help patients who may be hit with egregious billings related to emergent care?  Specifically, the media has highlighted emergent air transportation (fixed wing/rotary) as an issue.  There was also a recent story about dialysis.

A: Our team at RexPay is always brainstorming how to better help patients who are hit with significant medical debt so they can safely navigate the bill pay process. Currently, RexPay helps patients with significant medical debt better understand what payment plans are available to them and provides guidance on avoiding medical debt that will negatively impact their credit score. In addition, we provide guidance and tracking for medical bill due dates so patients know which bills to prioritize. Also, patients can ask the RexPay chatbot questions about medical bill terminology, health insurance, and health savings account policies to better understand their rights and options. 

Q: If the OB/GYN experience goes well, what next for RexPay? 

A: We will be looking at pediatrics and primary care for our next launch, and, after that, the chronic care space.  Basically, our platform works for any specialty or healthcare segment.  In fact, we could roll out RexPay to all healthcare segments right now. But for now we are focusing to make sure we execute an efficient go-to-market strategy.

Q: When will you and your RexPay team know you have succeeded?

A: When patients nationwide consider RexPay the “go-to” tool for easily managing their healthcare finances. 

According to CMS, healthcare spending in the U.S. grew by 3.9% in 2017 and represented 17.9 % of overall gross domestic product expenses.  It’s an aspect of life where Americans commit significant financial resources yet have little or no information and support when it comes to working through the costs and payments. We are excited to move forward, remove complications and barriers, and make a meaningful difference for patients (and their providers). 

Contact Rachel at: [email protected]