What You Can Learn From The PatientFocus Tech Pivot

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When Kyle Duke joined PatientFocus, the company was feeling the kind of pain every company wants to feel. It was growing.

Fifteen years ago, the market wasn’t ready for PatientFocus. At that time, healthcare costs were primarily covered by insurance. Only 10 percent (or less) of a provider’s revenue came from individual patients. Of that 10 percent, only 10 percent was fully collected, but in the grand scheme of write offs, that wasn’t worth the cost of investing in a solution.

Things started changing in 2008. Today, individuals account for 30 percent of a provider’s revenue, but the collection rate has remained at 10 percent. Do the math, and you’ll see what PatientFocus founder David Frederiksen saw. That’s a hit to the bottom line for the big players. It would be devastating for the smaller ones.

PatientFocus serves hospitals and other healthcare providers by managing collections from self-paying patients. But they don’t do it in the same way it’s been done before. The company works on behalf of the providers, but focuses on patient experience. The system makes it easy for patients to ask questions, get clarity, and set up payment plans when necessary. Often patients don’t even realize they’re working with a third party.

Things were going well for PatientFocus. So much so that in 2015, the company realized a huge bump in sales. And then the technology-related problems started.

“In 2015, the dam broke,” Duke says. “We sold 15 new clients, and nobody could keep up. We couldn’t get them on the platform, it took too long to onboard them…so what we saw was this huge growth in revenue and huge growth in expenses because we were having to add as many people as we were clients.”

When Duke joined the company, he was tasked with finding a solution. His approach could be a master class in adapting technology to solve business problems.

Step One: You Are Here.

Before making a single technology decision, Duke and Frederiksen spent three or four months digging into the core of the business. They hired an outside consultant who guided the process, uncovering data and trends with the cold eye of a third party. With potential revenue being lost every day, and dozens of clients and employees to consider, throwing things at the wall to see what stuck was no longer a good option. They needed strategy a strategy to handle the Iron Triangle.

iron triangle


The timeline for building a new custom platform did not line up with the company’s customer and internal demands. Moreover, with the developer team already working nonstop just to handle maintenance, going back to square one would take substantial investment in technology staff. With serious timeline and budget implications at play, it was clear: rebuilding from scratch would not work for PatientFocus.

Instead, Duke and the team looked broadly at everything they needed their system to do in order to find alternative solutions. They looked at process, workflow, documentation, technology, and where the system was breaking down. The goal was to automate the process, making it repeatable and scalable, while also serving individual clients.

It became obvious that a third party solution–with heavy modifications to serve the PatientFocus purpose–would solve their problems faster, cheaper, and provide better service to their employees.

Step Two: X Marks The Spot.

After settling on a solution, it was time to start building. Which meant a hard conversation with the company’s developers.

“Ok, we are not going to rebuild the platform from the ground up,” Duke remembers telling them. “That was day one. By about day 10, all 8 of them {the developers} were gone.”

It may have been a painful time, but that firm stake in the ground served both PatientFocus and their employees. The developers were able to identify that it was time to find jobs that would meet their career goals more fully, and the company was able to funnel expenses to the right resources.

It’s important to realize, though, that the PatientFocus team could not have outlined this same map when the company was founded. They needed to dive in and build their first MVP in order to understand client needs, their own workflows, and what processes are most easily automated. They drew a solid map from their current location, but, like most successful companies, they had to do some learning and course-correcting in order to reach that spot.

Step Three: Take The Team With You.

Sometimes. As we’ve seen, when there are shifts in technology or strategy, there will be some people who will find new opportunities. But for the team members who stay, technology change is people change.

Frederiksen and Duke managed this change by extending their relationship with their consultant. They understood that even though the team was onboard, change is hard. Even good change.

Every week during the transition, leadership mapped where every single employee sat on the change curve. They made a plan for helping the ones who struggled or fell behind. With timeline as a driver (the rebuild was slowing sales), the company could not afford delays. Duke credits that level of employee shepherding with their success.

“For us being able to start building in December and put the first client on in August, that’s the only way that happened,” he says.

Lessons Learned

Decisions like platform and custom vs. third party seem like technology decisions. But these are really business decisions. With the right strategy, technology can affect every part of the income statement – it can increase revenue, reduce variable costs, and reduce overhead (or keep it constant in the face of growth), all of which results in a healthier bottom line.

For PatientFocus, changing their technology more than doubled their daily activity. On the old system, they completed about 500 outbound calls to patients a day. Today, they can manage up to 1200. Employees are now able to focus on high value work (talking to patients) instead of menial tasks like looking up phone numbers and records. That means more revenue, for them and their clients, while also keeping headcount and overhead low.

At a high level, leadership is no longer worried that the system may crash at any moment. Being secure in the knowledge that the core technology would run smoothly equals exponential return on the CEO’s brain space. Now, rather than praying the technology works again today, he – and the sales team – can focus on growing the business.

The PatientFocus story reminds us that business and technology are no longer separate. Finding the right technology is worth the effort because it can literally make or break your business.

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