Daniel Johnson

Service Category, SearchAmerica
Daniel Johnson

A patient in need of treatment is asked by the hospital to document his identity and income. Unable to produce a birth certificate or W-2 statement, broke and uninsured, the patient stresses out. If he does get treated, the hospital doesn’t get paid and a collection agency swoops in to make the patient’s life miserable.

Headquarters: Maple Grove
Founded: 2001
Revenues: $20 million
Ticker: Private
What It Does: Develops software that allows clinics and hospitals to identify uninsured patients eligible for other forms of health coverage

Now imagine that same patient approaching the hospital registration desk. Within 10 seconds, his identity is verified and he’s told that he qualifies for Medicaid. Treatment is rendered, the hospital gets paid.

That’s what SearchAmerica facilitates. Its software automates the identification of patients who qualify for financial assistance programs. Health care entrepreneur Daniel Johnson founded SearchAmerica in 2001 after learning that a typical hospital identifies and enrolls only 60 percent of patients who qualify for hospital charity or government programs.

In 1994, Johnson founded Member Services International, which leveraged emerging Internet technologies to connect disparate databases and provide a centralized Web site where businesses could locate individuals who were delinquent in paying their bills. Primarily used by collection agencies, the company changed its name to MedServe Link in 1997 and focused exclusively on the health care market. Johnson sold MedServe to German technology giant Siemens in 2000, but Siemens’ efforts to integrate MedServe’s solutions into its product line proved cumbersome. The following year, Johnson and a team of private investors bought some of the MedServe technology back from Siemens and founded SearchAmerica.

SearchAmerica’s flagship product, Payment Advisor, was launched in 2003. “This is an emerging technology for health care providers,” Johnson explains. “Many hospitals have not yet adopted a product like this, but the market is adopting the technology at an unprecedented rate.” With a customer base of 500 hospitals, Payment Advisor has achieved 10 percent market penetration while building a 70 percent market share.

SearchAmerica, whose revenues are expected to jump 40 percent to $20 million this year, is well positioned for continued growth. “We have a larger customer base, very high customer service levels, and the ROI for our product is routinely 10 or 20 to 1, which is critical in an era where cutting expenses is so important in health care,” he explains. “We are also highly integrated into the software that is currently used in hospitals, which makes it very easy for them to use us.”

In December 2008, Johnson sold SearchAmerica to Ireland-based credit powerhouse Experian. “SearchAmerica required additional resources to keep up with growth,” Johnson says. “We needed to broaden our product, and we needed additional resources to stay ahead of the market and to cope with the rapid growth we were experiencing. Experian is an information company, so they were a perfect match for us.”

Johnson expects market dynamics to work in SearchAmerica’s favor. “People who can pay for health care need to pay, and those who cannot afford to pay must be subsidized,” says Johnson, adding, “I don’t see that system changing.”