Billing transparency pays off for St. Luke's Health

Tech startup iVinci Health didn't set out to help patients understand bills coming from St. Luke's Health System.

It set out to help St. Luke's understand what bills were likely to get paid by patients.

The two organizations, both based in Boise, Idaho, started working together in 2013. IVinci founder Kent Ivanoff was selling his expertise in predicting who would pay how much and when.

It was an analytics system based, in part, on what Ivanoff learned earlier in his career at credit card company Capital One Financial Corp.

"We started by building a business tool to help hospitals understand payment dynamics," Ivanoff said.

What St. Luke's quickly learned from the startup's analytics led iVinci to a whole new business and a new way of billing for the health system.

iVinci's business intelligence showed patients wanted to go online and see their statement and pay their bill like they did with other accounts. It also showed they were more likely to pay if they could easily set up an installment payment plan.

Trouble was, St. Luke's didn't have such a system. "We didn't have a digital platform," said Michael Rawdan, St. Luke's senior director of revenue cycle. "IVinci said they thought they could create one."

So iVinci built an online payment portal called VisitPay.

Before teaming up with iVinci, St. Luke's, like pretty much every other health system, didn't know much about the link between ease of payment and its own bottom line. St. Luke's learned it could save a lot on collections by installing a system for paying bills that was easier for the consumer.

"The poorer the experience, the more expensive it is for the organization—on the order of three to four times more expensive—just the cost of servicing the account," Rawdan said.

The model for how iVinci built out the VisitPay system was collaborative, working with St. Luke's and allowing the system to test what worked and what didn't. IVinci also started working with other provider clients to customize its core platform. The health systems drove much of what went into the product based on their individual needs.

That ability to help design what VisitPay would allow patients to do was a main selling point for another client, Salt Lake City-based Intermountain Healthcare, said Todd Craghead, vice president of revenue cycle at the system. "We provided a fair amount of input, with the intention that it would totally replace our system."

"It's important for a vendor to come with, 'Here's a shell of the platform, and here's the functionality,' " St. Luke's Rawdan said. "They came to the table with a shell. We worked closely with them over a few months with patient feedback through focus groups."

Ivanoff said the features of the VisitPay system are mostly driven by clients, which in addition to St. Luke's and Intermountain, include Virginia's Inova Health and Washington state's MultiCare Health System.

"The beauty of the tool is it provides complete flexibility for the health system to design how they want to work with the patient," Craghead said. "The patients can go in and say, 'I can afford to pay X amount at X per month,' and they can do that all online."

For example, "One of the things health systems have asked us to create is a version that can be used at point of service so health systems can help consumers understand what they will owe and help arrange financing," Ivanoff said.

Providers were ripe for the product because few had considered making billing and collections easier for patients, he said. Most of their focus was on big payers such as Medicare or private insurers.

But passage of the Affordable Care Act and trends in the private sector have triggered a rush to high-deductible insurance plans. Ivanoff and his partners' initial bet that patients would owe more has paid off for the firm. "Consumers are on the hook for more, and they don't have a 21st century tool set for dealing with that," Ivanoff said.

St. Luke's says it has seen a 48% increase in patient satisfaction with the billing experience, and a 70% increase in deductible and co-pay payments since implementing VisitPay.

"On traditional platforms the average bad-debt rate on those (accounts) is 20%; that's a pretty robust number," Ivanoff said. "Our bad-debt rate is 75% lower than that. And that's without making collection calls. If you give consumers transparency and control they like it far better, and they pay far better."​

A version of this article also appeared on Modern Healthcare's Transformation Hub. Read more at modernhealthcare.com/transformation.