You know how a medical visit these days tends to result in a welter of confusing bills and mysterious charges? Well, Kent Ivanoff used to get those bills, too. When the former Capital One executive moved back to his home state of Idaho from Virginia to raise his family in 2008, he decided that his next business would do something to make medical billing more predictable, effective, and user-friendly.
The result: VisitPay, a Boise software company that in November received its first professional investment, a $15 million infusion from Flare Capital, Norwest Venture Partners and Ascension Ventures in Silicon Valley for its patient financial services program. VisitPay, which counts among its clients St. Luke’s in Boise and Intermountain Health in Utah, provides an online platform where health consumers can see their bills, set up payment plans, and get more information about their insurance coverage.
Ivanoff founded VisitPay – then called iVinci Health – with Vince Martino, another former senior executive from Capital One, in his basement and staffed it with data analysts who were also Capital One alums. VisitPay’s clients have about $30 billion in revenue, he said. He expects that to double in the next six months.
The existing way that patients pay for health care is not just confusing; it’s ineffective. Patients tend to pay only $30 to $40 on every $100 they’re billed, said Ivanoff – far less than they tend to pay on other purchases, such as washing machines. VisitPay promises to raise that ratio, in part by offering payment plans of up to 36 months.
Ivanoff was also prompted to start VisitPay by the passage of the Affordable Care Act, predicting it would send a lot of health consumers to high-deductible health plans, which would move the burden of many payments to people, not insurance companies.
It took the team seven years, longer than Ivanoff expected, to create VisitPay. Ivanoff and others bootstrapped the company at first, and then they did a round of angel funding in 2011. In 2014, they raised another $5 million from existing investors and from two new ones – Intermountain in Salt Lake City, and Inova in northern Virginia.
Along the way, Ivanoff worked very closely for a year with Jeff Taylor, chief financial officer at St. Luke’s, to learn about the existing billing system and how to improve it. The $2 billion St. Luke’s, with eight hospitals and more than 200 medical offices in Oregon and Idaho, was a good fit for VisitPay, Ivanoff said, because it has a close alliance with the insurance company SelectHealth, enabling VisitPay to integrate the company’s explanation of benefits into bills.
“If the health system has a partnership with an insurance company, like SelectHealth, we can create complete transparency on the whole ecosystem,” said Ivanoff, who now manages his own family’s medical bills through VisitPay.
VisitPay went live at St. Luke’s in 2014, was modified, and now the online portal manages about 45,000 St. Luke’s accounts – about 30 percent of the total, Ivanoff said. He added that Visitpay has increased the Boise-based hospital’s patient payments 20 percent over traditional billing processes.
“We make the hospital radically more efficient,” Ivanoff said.
Taylor said the hospital measures satisfaction with the “patient financial experience” and has seen this rise since VisitPay was deployed. He thinks part of that is the fact that VisitPay lets users pay bills anytime of the day or night, and to choose among repayment plans.
Now, Visitpay has about 60 employees, most of them software or data developers in Boise. With the latest infusion of capital, VisitPay plans to keep hiring and to move to a larger space in Boise in 2018.
VisitPay leaders have learned along the way that things won’t necessarily move at the pace they set.
“The hardest thing about building this business is having an overwhelming value proposition for health system providers, and having to contend with an incredibly long sales cycle because they are typically slow and monolithic in their decision-making,” Ivanoff said.
That said, Ivanoff added that VisitPay wouldn’t have succeeded in his home state if St. Luke’s executives hadn’t been a uniquely visionary set of administrators. All health systems are struggling now with patient payments and complex billing systems. But not many are willing to listen to outsiders and integrate complex new systems in partnerships with third-party payers, Ivanoff said.
“To have all of that in our backyard where we had the right mix of talent, capabilities, experience to actually mobilize in a hard-hitting way was like catching lightening in a bottle,” he said. “I truly don’t think it would have (or could have) happened anywhere but in Boise, Idaho.”
Anne Wallace Allen is editor of the Idaho Business Review