iVinci raises $5 million for hospital billing, with support from St. Luke’s

iVinci Health has raised $5 million from four hospital systems, including St. Luke’s Health System, for its new hospital billing and payment system.

The system is now being used at St. Luke’s after years of development. St. Luke’s Chief Financial Officer Jeff Taylor said iVinci is the first company the health system has invested in, though it’s interested in partnering and potentially investing in other companies that could improve the health care delivery model.

The funding is the second large capital investment by St. Luke’s in iVinci. The Boise-based hospital system was part of the company’s first round of $1.3 million in funding in 2011, along with an unnamed hospital in the Pacific Northwest. St. Luke’s and that undisclosed hospital were part of the second round of funding, along with Intermountain Healthcare based in Salt Lake City and Inova Health System in Falls Church, Va.

“We believe that this is a disruptive approach that’s never been achieved in the billing area as it relates to the patient experience. Our hope is that the patients at St. Luke’s have a better experience,” Taylor said.

Kent Ivanoff, iVinci’s CEO, said the startup’s service makes it easier for hospitals and patients to settle bills. Ivanoff and Taylor both said patients, instead of insurance companies or Medicaid and Medicare, are paying a larger share of hospital bills, due to the rising popularity of high-deductible health insurance plans. A decade ago, patients footed 10 percent of the bill, but that percentage will soon be 20 percent, Taylor said. And patients want consumer-friendly systems.

“Health care billing is enormously complex. To improve the overall patient experience, we felt like we needed to simplify the process for our patients and provide a platform that would be conducive to that,” Taylor said.

iVinci makes the VisitPay patient revenue management system, which is now fully in use at St. Luke’s and partly being used by the other three hospitals. VisitPay includes a payment and financing system for patients, as well as a patient scoring and segmentation system that helps hospital predict how and when patients will pay, and a patient revenue intelligence center that offers payment data and analytical tools to hospitals.

Ivanoff said VisitPay benefits both patients and providers. It gives patients a simpler way to view and pay their bills, including the ability to dispute questionable charges or develop a financing plan with the hospital to pay off large bills. Hospitals, meanwhile, are more likely to get paid for their bills, because confusion over billing is a key reason why patients don’t pay promptly, Taylor and Ivanoff said.

“The combination of a great clinical experience and a great billing experience is how you’re going to drive loyalty and patient consumerism,” Ivanoff said.

Ivanoff said hospitals are free to set the length and possible interest rates of the financing plans they offer to customers who can’t pay immediately. St. Luke’s historically hasn’t charged interest for months or possibly even years on bills, Taylor said.

“This will allow us to put it into a more structured process, where the interest-free period could be for four months to six months, depending on the terms,” Taylor said.

While St. Luke’s is using all of VisitPay’s services, the three other hospitals are still implementing the services and don’t have the payment portal in place yet, Ivanoff said. iVinci seeks to expand the number of hospitals it serves.

“We’ve got a pretty robust pipeline. I think we’ll find several new clients in the fourth quarter,” Ivanoff said.

iVinci was founded in 2010 by Ivanoff and Chief Operating Officer Vince Martino. Ivanoff’s background is in financial services. He founded American Direct Credit in Boise, which was later acquired by Capital One Financial Corp. He stayed with Capital One until 2008, eventually becoming an executive vice president in charge of some of the bank’s credit card programs.

iVinci has worked with St. Luke’s to develop VisitPay for four years. Taylor said St. Luke’s has worked with other startups in the health care sector, notably White Cloud Analytics in Boise, but iVinci is the first the hospital system has invested in. He said St. Luke’s isn’t looking to become a venture capital investor, but will look at investing and partnering with companies that can improve the health care experience.

iVinci now has 15 employees in Boise, and contracts with 10 software developers at a company Ivanoff didn’t wish to disclose. The company also has an office in Salt Lake City. He said the company seeks to expand its workforce in Boise and open a Washington, D.C. office.

“We are hiring literally as we speak and expect to double our workforce in Boise in the next 12 months,” Ivanoff said. The company is primarily looking for software developers and data engineers. He said getting high-quality workers in Boise is a potential growth constraint which is why, along with having staff near the other hospitals it currently serves, iVinci will have offices elsewhere.