David Frederiksen – Chief Executive
David has a background in Financial Modeling and Healthcare Strategy. He launched PatientFocus in 2008 as a medical billing company that functions as an outsourced extension of their clients’ billing office.
His passion for better healthcare and faster payouts has supported his focus on building a team and company to address the ever-growing patient-pay challenge facing healthcare providers today. In this interview, David talks to me about his experience in the healthcare industry and the emerging trends he expects to see in the coming years.
Merging Passion with a Career in Healthcare Finance
In the healthcare industry, David observed that oftentimes one party’s upside is another one’s downside. Helping providers to help their patients figure out their medical bills is one of the rare functions in healthcare where there are easily more winners than losers.
Healthcare economics is rich with competing interests whether it’s a payer versus a provider, or a provider versus a supplier, etc. David’s focus on creating an outsourced patient-pay solution like PatientFocus was to optimally offer benefit to both providers and their patients.
Prior to PatientFocus, David worked for a data company translating analytics for their bank clients and the healthcare providers to whom the banks were lending. Before that, he founded and sold a company that loaned money to rural hospitals across the country.
‘I’ve been on the financial side of healthcare for a long time, and it’s where my heart is. Healthcare economics defy logic, and don’t make a lot of sense sometimes, but I wouldn’t be happy in any other place.’
When talking about David’s motivation for founding PatientFocus, he recounts working at a company that worked with banks who were lending money to healthcare organizations. The banks were essentially extending a line of credit based on the healthcare company’s daily A/R balance.
One of the things that David noticed was that none of these banks would lend a dime against the outstanding patient-pay A/R. It could be a million dollars and less than 30-days old, but the banks viewed it as worthless.
David realized that the majority of those healthcare organizations did not have the systems or the tools to bill patients effectively. At the same time, there were countless news stories about patients who were suffering under the weight of high deductibles and other out-of-pocket expenses, but nobody was talking about how difficult it was for the healthcare providers to bill and collect it.
‘I saw an opportunity and knew that patient pay, high deductibles, and co-insurance were here to stay and were only going to get bigger. I figured there had to be a way to insert some sanity into the process.’
In talking about landing his first account, David says it’s a process of building trust and finding clients where trust-based collaborative relationships can be built for the ultimate welfare of the patients.
Partnering with clients requires of a lot of networking, a lot of introductions, and a lot of meetings. The team worked very hard to build relationships with local and national healthcare providers who share their values. Once they got that first client, they did a great job for them which led to the next client and the next client and the next client.
Current Business Structure and Organization
Presently, PatientFocus works with a variety of clients ranging across hospitals, physician practices, or ambulatory surgery centers. Their niche is large oncology practices owing to their commitment to treating patients with the utmost care, consistency and clarity which is precisely what oncologists’ demand.
As a company that delivers on that, PatientFocus benefits all other types of clients as they also receive that same level of customer care which involves taking care of patients, increasing cash flow, and decreasing patient complaints.
Currently, David leads a team of 25 people based out in Nashville. The team handles the patient pay portion of the revenue cycle after insurance. They do find a lot of insurance for patients which perhaps didn’t get billed correctly and send the insurance information back to the client to file. They handle all of the patient billing outreach and all of the resulting inbound workflow.
When asked about branching out into medical billing and collections, David claims that the company has no plans to do so. According to him, billing insurance and filing claims are about transactions while billing patients is about relationships. These two are distinctly different processes that require different skill sets. They need different systems, different processes, and different people. By focusing on that single aspect of the revenue cycle, PatientFocus has been successful.
PatientFocus Operations during the COVID-19 Pandemic
PatientFocus was built by leveraging technology that automated countless processes that historically required manual intervention. This helped the team to readily adapt to the circumstances surrounding the pandemic. Their patient outreach did not stop and nothing changed in the way they worked with patients throughout the past year.
‘Our mission from the very beginning has been to put the patient first and figure out how to help each patient. Whether a patient is experiencing having financial distress from a job loss or a global pandemic, we were already doing the things necessary to help our patients get through it all.’
Standout Moments as a Business Leader in the RCM Domain
For David, one of the biggest standout moments was when they rebuilt their platform in order to scale. They took all of their institutional knowledge and experience and rebuilt it on a highly configurable customer-relationship platform.
This allowed the company to accommodate more clients with diverse businesses. They could easily work with multiple clients in multiple ways based upon their clients’ preferences and businesses rules.
‘Letting our business needs drive our technical decisions made all the difference in the world and allowed us to scale exponentially.’
Talking about PatientFocus’ proudest achievements, David believes it is the volume of patients they have helped over the years. The name of the company, PatientFocus, was a deliberate choice because they put the patient at the center of everything they do.
‘If you put the patient at the center and you treat them like customers, everything else will fall into place. I’m very proud of how we built a level of customer care into a process that has historically not been known for customer service.’
Overcoming Challenges in the Industry
David claims that growth is a challenge and ensuring that you have the right people in the right seats at the right time is a constantly evolving process. He feels fortunate to have built a tremendous team that is dedicated to building the company with him, which is not always easy to achieve.
‘Running a company is not about what you can do, it’s about how you can bring a team together to do great things, and I am most proud of my team.’
Business Plans for the Future
Looking towards the future, David’s focus is on driving revenue and partnering with more clients. They aim to help as many patients as they can, and are excited about the opportunities within oncology. As they already have a good foothold in that space, expansion is a function of working with other large practices and hospitals.
Regarding marketing methods that help growth, David says that any marketing or sales effort that allows personal interaction with potential clients is always a good thing. With the pandemic hopefully subsiding, meeting clients face-to-face is what David looks forward to.
Top Philosophies and Core Values in Business
Number one is to put the patient first, which is also the company’s mission statement. If the patient is the center of everything you do, the quality of the work improves, and the team dynamics improve.
Outside of clinical care, the patient is not always at the center, and that’s historically how patient billing has worked. David and his team work very hard to change that at least for their clients and their patients.
‘Our guiding principle is to put the patient first, seek to understand their needs and determine the best way to help them get through the billing process – whether it is an extended payment plan, online payment options, or even just being there to listen to them.’
In keeping the focus on the patients, David is also conscientious about their provider clients. He states that they have the experience and the track record to prove that by putting the patients at the center, they can increase the patient-pay revenue and reduce patient complaints to almost zero.
Treating patients like customers benefits the clients tremendously: collections dramatically increase, and the patients are happier. The complaints go down, and the billing offices have more time to focus on everything else they have to do. It’s a philosophy that pays dividends and results for everyone, and patients are grateful for it.
Advice for Newcomers Starting a Career in RCM
There are lots of phases of RCM. When it comes to coding or filing an insurance claim, there are many factors to it and lots of little companies that will take on one slice of the revenue cycle, so there’s plenty of places to play a role in RCM. PatientFocus plays in the post-insurance/pre-bad debt space.
David’s advice to anyone looking at RCM is to determine where they want to play a role. Is there a high demand for a particular service? There could certainly be a need, but are customers are ready to open up their wallets and pay for it? That’s demand.
‘Be thoughtful, be creative and find a role where you can keep the patient at the center of everything you do. That’s where you’ll be most successful.’
Key Learnings over the Years
Put the patient first – that’s what matters. Without patients, there’s no reason for anyone to be in this industry. At PatientFocus, our specialty is oncology and cancer patients are a very special group of people. They are dealing with a lot of physical trauma, and they’re scared. Their family is scared.
Aside from the fact they have been diagnosed with a very scary disease, patients with a cancer diagnosis are dealing with a lot of emotional and financial challenges as well.
PatientFocus has built a level of customer care that extends the thoughtful and truly compassionate care that oncologists are known for. The team helps oncology clients extend that care through the billing process.
Key Benefits of Services at PatientFocus
The company is built as a technology-enabled service, offering full-service patient billing which includes statements, phone calls, text messages, e-mails, and online payment options. That’s the bulk of the service, but patient billing has a lot of moving parts.
There are countless transactions flowing between and among insurance companies, providers, and patients, so by extension, there is a considerable amount of data flowing between and among the clients, insurance companies, their patients, and PatientFocus.
Managing all that on behalf of the clients removes a tremendous amount of work and headache from the clients’ business offices and staff while delivering increases in cash flow and reductions in patient complaints.
Vision for Future of the RCM Domain
David believes that patients are going to be paying even more out of pocket over time, which is likely to make them more demanding. Providers will have to find better ways to serve their patients. This is also likely to produce favorable results for patients.
Providers will be forced to step up their game and provide better, more accessible service along with simple things like better parking, better scheduling, and less wait times. Paying customers demand customer service from their providers, which will be a good thing for everybody.
‘The days of patients’ sitting in a waiting room for two hours to see a doctor for ten minutes are coming to an end because if patients are forced to pay a $5000 deductible, they will find another provider that doesn’t make them wait.’
Emerging Trends Expected in the RCM Space
Billing the patients on the front end of treatment or before a doctor’s visit is a trend that has been coming online for a while. Price transparency is widely discussed across the industry, but still has a long way to go.
Transparency is a part of the solution when it comes to helping patients understand their bills prior to service, but there’s a lot of moving parts to make that happen. For providers, pricing transparency solutions are not only complicated to manage, but also expensive to implement. Multiple systems – some of which are outside the four walls of a provider’s office – have to sync up in order to inform a patient what they owe in real-time, and that is a lot of data that has to come together quickly and accurately.
There are some companies out there that are making great strides in this effort, but there’s a lot of work to be done before this becomes the norm.
Leadership Lessons Learned over the Years
‘Success is not about what you can do, it’s about bringing a team together to do what needs to be done.’
David states that he founded PatientFocus 11 years ago and at one point, he did everything, but that doesn’t mean that he did it well. Success is a function of finding the right people to do the right thing at the right time for the patient. He believes he has made plenty of mistakes along the way, but the most important lesson he has learned from a leadership perspective is to make sure you have got the right team and to take care of them.