Last updated on April 29th, 2020 at 03:31 pm
Healthfuse achieved record growth in 2019 after more than eight years in a unique segment of the health care industry.
The Milwaukee-based company provides revenue cycle vendor management services to hospitals and health systems to reduce costs while increasing collection performance of vendors.
In exchange for its services, Healthfuse retains approximately one-third of overall savings that it identifies, which is on average $1 million to $5 million per client, said Nick Fricano, Healthfuse chief executive officer and founder.
“Actual results from these vendors fall short of expectations for a lot of reasons,” Fricano said. “That can result in millions of dollars lost annually, which hospitals just can’t afford to forfeit.”
Healthfuse combines technology, analytics and research to review revenue cycle vendors and help health care organizations establish revenue cycle best practices. The company works to provide transparency around vendor processes so hospitals can better gauge their overall performance.
“We have really unique technology that allows us to audit every patient account that a hospital’s vendors may be touching, whether it’s coding, billing or collection related,” Fricano said.
With no upfront fee for hospitals, the company’s business model can be thought of as a capital partnership or a risk/reward relationship – a unique approach to savings in the health care industry, Fricano added.
“We’ll take your risk but then also we’ll share on the upside, and that’s how we’ll fund our efforts,” Fricano said.
In 2019, Healthfuse grew by 40% year-over-year and added 53 more hospitals to its portfolio, which increased its market penetration by 30%. The company is now partnered with approximately 153 hospitals across the U.S., Fricano said.
Healthfuse said it identified $86 million in recurring revenue for new clients and $186 million in revenue for existing clients, with a three-year project impact of $258 million in 2019, Fricano said.
Hospitals and health systems are currently debating whether to build out their own vendor management tools or rely on companies like Healthfuse. However, Fricano senses a shift towards the latter, which he says is evident in the company’s recent growth spurt.
“I see right now from an adoption perspective, we’re over the early adopter phase and we’re into the majority of the market that I think will be compelled to do something,” Fricano said. “I think the numbers are too big to ignore now and they’re getting the attention of hospital boards, executive teams and beyond middle management.”
Leadership: Nick Fricano, chief executive officer and founder; Jon Myhre, chief operating officer and co-founder; Cody Clayton, executive vice president; Nick Corrao, senior director of client development; Kelly Welch, vice president of client services.
Headquarters: 324 E. Wisconsin Ave., Suite 1300, Milwaukee
What it Does: Health care revenue cycle vendor performance management
Next goal: Deliver more value for hospital partners and give back to the community