Corner Office: VisitPay CEO on the rise of consumerization in healthcare

Kent Ivanoff is co-founder and CEO of VisitPay, an R1 company and leading platform for patient financial engagement. Mr.Ivanoff launched VisitPay in 2010 with the mission to help patients and healthcare providers manage bills in a better way.

Before co-founding VisitPay, Mr. Ivanoff served as an Executive Vice President of the US Card Division for Capital One Financial. Mr. Ivanoff joined Capital One in 1999 via the acquisition of a company he co-founded, American Direct Credit.

Mr. Ivanoff also serves on the board of One Stone, a free, private high school in Boise, Idaho that is transforming the way education is delivered to high school students.  

Question: What are you seeing change in the industry for the patient? 

Kent Ivanoff: The rise of consumerism. The amount owed to a hospital by a patient is dramatically increasing, making them responsible for a growing portion of health systems’ revenue. Five years ago, the average balance a patient owed was $750. This year it was $1500. 

The continued rise in obligation is doing more than increasing financial stress for both parties—it's transforming the dynamic between patient and providers. Patients are taking on the role of a consumer and looking to their providers for the tools and experiences they’re accustomed to as a consumer. They’re not just asking for flexibility, transparency, and digital experiences—they’re demanding it. The financial stakes have become too high for them to idly stand by. 

Question: Will there be a time when the patient experience is fully virtual? 

Kent Ivanoff: Fully virtual, no. But digital-first, yes, and it’s already here. In the last few years we’ve witnessed a sharp turn towards digital. Today, over 50% of patients pay their bills through their mobile device. A couple years ago it was south of 20%. By 2025, I expect over 75% of patients to manage the financial and administrative aspects of care through a personal device. And it's not just the younger generations driving the demand for digital; the baby boomer generation is increasing their use of payment platforms at triple digital rates—I don’t expect that rate to slow anytime soon.  

Question: How are providers responding to the rising demands of the consumer?  

Kent Ivanoff: For the first time, the healthcare industry is beginning to measure its progress against other industries, as opposed to itself. We’re starting to see providers integrate proven consumer strategies into their own patient financial strategies. In the case of digital payments, we’re seeing increased adoption of personalized payment plans that leverage data-driven techniques familiar to consumer and finance industries. But that won’t be the only trend borrowed from retail. Take PayPal—if you look at every other type of consumer transaction in the U.S., PayPal is almost as ubiquitous a transaction medium as credit and debit cards. But in healthcare, it's a tiny sliver. In the next few years, that will flip flop. PayPal will take a more aggressive approach to the healthcare space because it is a familiar and proven experience. 

Question: What will the healthcare market look like in five years?

2021 was monumental for consolidation—for both providers and the technology companies like R1 that serve them. This is a trend we expect to continue. The pandemic brought challenging financial headwinds to healthcare providers which are persisting, albeit in adapted form. The tight labor market, coupled with accelerating inflation, is presenting health systems with a compounding set of issues. We expect finance executives to look for relief for already pressured balance sheets by exploring new financing options for patient receivables.

With no institutional players in the space, the market is ready for a purpose-built entity to lean into healthcare. We're seeing validation of the need with the success of personalized, longer term payment arrangements for patients. However, today both the obligation and management of such plans remains the provider's responsibility. Staffing pressures, access to institutional capital, and the sheer pace of change of consumer-facing technologies mean CFO's will be looking for new third-party solutions, tailored to the specific needs of the healthcare sector.

Much attention has been put on January’s Price Transparency Act. Is this what you would consider a consumer-first policy?

The Price Transparency Act is frustrating to me. Like much regulation, there’s a lot of good intent, but we’ve seen little action. While the Act shows patients a look at cost, it fails to provide meaningful, actionable transparency. A consumer should be provided the tools to not only see the price tag, but be able to mobilize an approach for financially affording their care. And for the provider, there are no incentives to help a consumer more easily handle the financial burden. Patients and providers are increasingly reliant on each other for their own financial well-being. A consumer-first policy would be one that helps the patient and the provider, one that makes transparency actionable.

Learn more about VisitPay.

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