By Gigi Wood
CORRIDOR – It’s as easy as A, B, C.
Readers of the Corridor Business Journal encounter a lot of acronyms and industry terms in their weekly issues. Phrases such as CEO (Chief Executive Officer) are fairly easy to understand.
Talk like, “Internet retailer of ratchet straps” starts to become a little more complicated when reading about companies such as Clickstop. It took awhile to understand the concept of “rugged tablet PCs” that Mobile Demand sells. Now, most people know about, or even own, tablets.
There’s a bit of a learning curve. But that’s the price, or rather, benefit of becoming versed in the Corridor’s most innovative and fastest growing companies. Twenty of those companies were celebrated May 24 at the Coralville Marriott, during the 2011 Fastest Growing Companies breakfast hosted by the CBJ.
Within this issue, the CBJ unveils the top 20 Fastest Growing Companies for the year. To earn a spot on the list, businesses had to meet a number of criteria. First, companies had to earn at least $350,000 annually. Those companies then submitted three years of tax forms or audit statements to Honkamp Krueger & Co., a Hiawatha-based accounting firm, which independently tabulated the results. The winners were selected based on their growth during the previous three years.
The list was started in 2008, when the now-closed soybean-oil-producer Asoyia ranked first with 856 percent growth. Bochner Chocolates was ranked No. 1 in 2009, with 427 percent of growth.
Interesting trends surfaced in this year’s list of companies. For example, three are led by women; in 2010, none of the top companies were owned by women. Six companies have been on the list for three years, while five businesses have been on the list for two years. Four companies are located in Hiawatha, while 10 are based in Cedar Rapids.
Summaries of each Fastest Growing Company start on page 7 of this issue. With record applicants this year, the number of companies honored was extended from 15 to 20. Because of that change and due to the high number of companies returning to the list for a second or third year, the CBJ decided to run longer features on the businesses new to the list. Smaller vignettes of the returning companies are also included.
Now, it’s time to learn a new acronym and about another ground-breaking company in the Corridor. Coming in at No. 1 on the list with 292 percent growth is Precision Revenue Strategies (PRS), a Coralville-based healthcare revenue cycle company.
Basically, PRS takes the outstanding bills that patients aren’t paying their doctors or hospitals and works with the patients to get those bills paid.
“We are strictly focused on helping providers with insurance receivables or insurance claims that have gone unpaid,” said Christopher Klitgaard, PRS’s president. “What happens a lot of times is providers, hospitals or physician groups, can’t staff 100 percent of that volume that comes through. What inevitably occurs is that there’re a certain percentage of their claims, whether it’s 5-20 percent of their insurance claims that they can just never touch.”
Most company leaders will credit their employees with the business’ success. For the relatively small, up-and-coming companies of the Corridor, the sentiment is much more than an empty platitude.
For example, Tim Guenther, president of Clickstop, credited his employees with the company reaching No. 4 on the list this year. A story about Mr. Guenther being named Entrepreneur of the Year can be found on page 3.
Likewise, for PRS, its employees are the mainstay of the company.
“There are two or three things that we sell everyday here; first is our people,” Mr. Klitgaard said. “Ninety percent of our people have college degrees. And while that in and of itself isn’t necessarily the end all be all, we’re trying to get a more articulate, more professional, more analytical person who can understand how insurance companies work, such that they can take the benefits a patient has, and explain to a patient when we call to ask them for their balance owed, that we have people who can say, ‘Wellmark paid X, Y and Z and they did this because you’re part of this plan ABC,’ and ultimately why you owe your deductible.”
Workers are such an important part of the equation at PRS, the employee culture book is based off of Zappos.com CEO Tony Hsieh’s book, “Delivering Happiness,” which outlines that Zappos’ model for improving profits by improving corporate culture. Last year, when employees asked for more paid time off, Mr. Klitgaard doubled it. When they requested an employee shower to rinse off following lunchtime workouts, he declined, only because there is no room for one in the facility.
The method seems to work. PRS started in 2007 with six employees. Now it has 50. The company has yet to advertise for a job opening because every hire has been generated by employees recommending the company to friends and family.
While the culture’s been a hit with employees, the company’s service niche is somewhat unconventional. Uncommon products and services, however, are the norm among the companies featured on the Fastest Growing Companies list.
One way to better understand PRS’s services is to know its history.
Mr. Klitgaard, who has a bachelor’s degree in finance and master’s degrees in business and health administration, was working at University of Iowa Hospitals and Clinics before he started his company in 2007.
He worked most recently as the hospital’s director of patient financial services, running its revenue cycle.
“Revenue cycle in healthcare is basically the parallel path that a patient goes down while they’re going through their clinical care visit,” he said. “It’s the scheduling, the registration, the insurance verification, its making sure the charges are in to the system, making sure that the bills are submitted appropriately to the insurance companies and then, ultimately, they are billed appropriately to the patient so people who have insurance don’t get socked with a $10,000 bill when it should be a $100 bill.”
For hospitals and doctors’ offices, keeping patients happy on the billing side can be as important as their satisfaction with the care from the physician.
“What we find in a lot of very competitive healthcare markets is that if they have a poor experience on that billing side of things, and there’s a doctor across the street that can provide the same care, there’s a likelihood that if it was stressful enough, even if their care was good, they may switch providers,” Mr. Klitgaard said. “It was my responsibility at Iowa to manage that process.”
In 2007, when he left UIHC, his department was bringing in about $1.1 billion into the system.
“I had been in charge of the revenue cycle for about five to six years there and got to a point where we had tightened the screws pretty good and performance was basically top quartile in all benchmarking categories,” Mr. Klitgaard said. “I just was looking for a new challenge.”
During his time at UIHC, he had the opportunity to experience what it was like to interact with some of the third-party billing companies that collected unpaid bills from patients.
“Largely what I saw was a disconnect from how providers view the patients, wanting to put them in the center of their care, from these firms that just wanted to collect money,” he said. “So I thought, if you could combine someone who’s able to work with the insurance companies and work with the patients to maximize the provider’s revenue, but do that in a manner that’s much more patient-friendly and patient-focused, and really kind of bringing an education to the patient, that it was going to be much more successful.”
Unlike some of those companies, PRS is not a debt collection agency. After examining a patient’s case, PRS at times recommends the hospital treat it as a charity care account. The company also helps patients navigate self-pay health plans, such as Health Savings Accounts.
“What happens is once an insurance company claim is paid, the patient then is billed. Usually the hospital or physician group will give the patient 90-120 days to pay that bill before it goes to a collection agency,” Mr. Klitgaard said. “We operate in that 0-120 space and what we do is all of our interactions, whether it’s the insurance side or the patient side, are all done in the name of the provider. So (we call patients introducing ourselves as) hospital ABC, it’s provider ABC, (we never call as) PRS. Patients are much more likely and insurance companies are much more likely to do business person-to-person rather than third-party.”
Part of PRS’s competitive edge is outlining costs to clients.
“When we go price out on a deal or bid out a deal or provide an estimate, starting from the financial piece, we show our cost model to these providers so they know exactly what they’re paying for,” he said. “That’s something that a lot of people in this (industry) simply don’t do. It’s usually a shell game and that used to frustrate me so bad.”
Mr. Klitgaard has hopes for PRS looking forward.
“We’re a little over a $4 million company now,” he said. “We’d like to be a $50 or $60 million company in 10 years. That would put us as one of the larger companies in this space. Not the largest but the top 30 percent, top 40 percent.”