This McGuire Woods series features interviews with C-suite leadership of private equity-backed portfolio companies. This installment features Judson Ivy, founder and CEO of Ensemble Health Partners.
Q: What do you believe is the most significant current challenge to growing your business and what will be necessary to overcome it?
Judson Ivy: Healthcare and, specifically, healthcare revenue cycle are changing drastically in the sense that there is a desire for payors and providers to come together. Eventually, to get cost out of the system and achieve improvements and efficiencies, this bridge between payors and providers must be built. But in today’s environment, there’s a distrust between them. Our job is to try to help resolve some of that distrust.
This is not necessarily a challenge to growing the business, but more specifically, market dynamics that are affecting how this industry sector will eventually evolve. There is still a great deal unknown about how to eventually bring payors and providers together, especially as distrust and misalignment in incentives persists.
I participated in a payor-provider summit a few weeks ago. The provider said to the payor, “Will you let me see the margin that you are making on this particular contract?” The payor’s answer was, of course, “No.” The provider responded by saying, “But you are asking me to go through your contracts and support price transparency. You want to see what my cost is through this equation. Why is what’s good for you not also good for me?”
As this exchange shows, getting payors and providers to work better today is going to be a challenge. Our job in the revenue cycle often requires our removing the barriers placed on providers, who are our customers, such as authorizations, denials or other such issues. There are a lot of pressures on providers today, including consolidation, payor behaviors and regulatory changes, which is a big reason why our business is growing.
Q: What plans do you have to further grow your business and what will be necessary to achieve this growth?
JI: Our plans are to continue to grow, but at a pace consistent with our founding ethos. We believe that, essentially, the devil is in the details. We believe that technology is an enabler, but it is not the largest differentiator between mediocre and great results. What we focus on is how do we hire great people to effectuate results for our clients and do this in a way that produces not only great financial results, but great customer satisfaction as well.
We are very proud of our customer satisfaction results and want to continue to grow the business around that ethos. We are adding some very innovative technological capabilities around artificial intelligence, machine learning and automation. We don’t do so with an eye toward replacing our people, but rather to augment what they do and allow them to focus on the higher-value work. We are looking at growing not into a tech company, but more of a tech-enabled services company that allows us to be more efficient and make better decisions.
Q: What do you think is the key to attracting and retaining your talent?
JI: Our culture is extremely important to me. It’s the one matter I will never compromise on. Since I started the company and was the first employee, through today when we have close to 5,000 team members, we believe that you need to treat people really well, whether they are mailroom associates or have executive vice president by their names. Engagement, making people feel valued, treating them like family, investing in their growth and giving them a purpose are key parts of what we do.
Giving purpose is tremendously important in our work. We’re in the business of providing services to healthcare organizations. Typically, it’s very easy for nurses, doctors or clinicians to find a purpose in what they do. It can be harder for billers, collectors or registrars to see how their work translates into providing better care for patients. They sometimes see it as purely transactional work. We make a daily effort to connect the dots for our associates, illustrating the impact that excellent revenue cycle performance has on clinical outcomes and patient experiences. Since we’ve been able to align our $16-an-hour employees with purpose, our turnover is much lower and engagement scores are outstanding.
People ask me, “What do you attribute your success to? How have you taken the business from one employee to almost 5,000? How have you achieved your client results?” I answer that the one thing we attribute this all to is our culture and people. Retaining our people is my top priority. They are the differentiator for us.
Q: What do you think is necessary to most effectively capitalize on the momentum of your recent private equity investment?
JI: One of the reasons we selected Golden Gate Capital (which invested in Ensemble in August 2019) was the experience it brought with technology outside of healthcare. It doesn’t have any other healthcare assets; that was a positive for us. We are trying to revolutionize the way that healthcare revenue cycle management works and essentially apply many of the lessons learned and value-adds from other industries. Our partnership with Golden Gate is designed to add capital around our investments in technology that will not, as previously stated, replace people, but help them make better decisions and focus on value-add work versus transactions.
Our partnership is about the long view. Golden Gate has a perpetual fund versus a set horizon to monetize the investment, so it is not on a three- or five-year horizon. That was important to us. We did not want to need to make decisions that negatively affected our customers and/or our associates and how we are going to grow the business. We can take a five- or 10-year perspective on how to make investments that will pay dividends for the life of the investment versus trying to get the business to be the most profitable within a three-year period.
Golden Gate wanted us to continue to run the business in a customer- and associate-centric way, believing that if we do those two things and then make additional investments in technology, the long-term result will be exponentially greater than a short window of purely trying to work toward a financial goal. This approach can be successful, but we’ve seen plenty of examples where bad decisions are made that affect customers and associates, simply to “succeed” in that three- or five-year window. We didn’t want that. We really felt that our long-term reputation in the marketplace is more valuable than a short-term window to create profit.