Innovation Destination Hartford Website Curator Nan Price spoke with PractiSource, LLC President and CEO Markus Muhlhauser about how his business got off the ground, some of the challenges the company has faced, and the importance of persistence.
NAN PRICE: When and why did you start the company?
MARKUS MUHLHAUSER: I started the company in January 2015. Our official launch date was May 2015. Our goal was to provide cutting-edge revenue cycle management (RCM) services and technology to maximize revenue for clinical medical laboratories and well as physician practices. Personally, I have more than 24 years of experience in that field.
NAN: You use the term “our,” so did you start the company with someone else?
MARKUS: I started the company and then shortly thereafter brought in Frank Perrotta, our Chief Technology Officer. Frank and I had worked together very successfully in the past and he brings more than 25 years of RCM and enterprise-class healthcare software development experience to the company. Since then, he and I have brought together some of the best people we’ve worked with over the course of our careers. These folks now serve as PractiSource’s managers, reimbursement specialists, and technology staff.
NAN: How did you develop the concept for your business?
MARKUS: Healthcare has become more and more dynamic. It’s ever-changing and more confusing for all types of medical providers. Specifically, we noticed massive changes to revenue models in both the clinical laboratory and physician practice spaces, making it harder to get paid for medical services provided. We realized we could leverage our experience in the field to develop a suite of services and technologies that would allow our clients to not only survive, but thrive in these new paradigms.
We then looked at what’s important to medical organizations, which is providing a high level of service and care to their patients. That’s what they strive to do every day, and it’s what they enjoy doing.
The next thing that’s important to them is, of course, making money and maximizing revenue for the important work they do. However, quite often the demands of running the business side of their organization detracts from the focus on patient care. Furthermore, these organizations often suffer from less than optimal performance on the business end.
PractiSource provides the RCM and technology services needed to not only improve revenue collections, but do so in a manner that frees our clients to concentrate on their core competencies. We concentrate on the business side of medicine and work with the insurance companies to maximize revenues, allowing our medical clients to concentrate on patient care. We also provide our clients with the technology and analytics to ensure they are practicing medicine profitably.
NAN: There seems to be a lot of competition in this field. What sets PractiSource apart?
MARKUS: You are are 100% correct, there is certainly a lot of competition as well as a lot of challenges in our field. However, I’ve always believed that in any market there is always room for a company that performs better, more efficiently, and with better service than the status quo. So, I tend to look at these challenges as opportunities, both for PractiSource and our clients.
At PractiSource, we look at our competitive advantages in terms of differentiating values or “DVs.” In fact, we have identified 14 unique DVs that set us apart from the competition.
For example, some of our top DVs have to do with our people, technology, and service structure. When it comes to people, we have attracted managers and executives with more than 20 years of experience in our field. When it comes to technology, we have created proprietary systems, which give us a leg up on our competitors. And when it comes to service structure, we differentiate ourselves by having a very unique small team environment headquartered in the United States, in contrast to many of our competitors, which utilize off-shore assembly lines. By using multiple small teams, we can cater to the specific, unique needs of our clients while also providing greater access to our experts.
These differentiators allow us to put the best interests of our clients before all else—which is our most fundamental core value.
NAN: You founded a company before this, too. Would you say you’ve always had an entrepreneurial drive?
MARKUS: Yes, absolutely. I love growing companies and have been blessed to have a good track record for both my companies and clients in the past. Prior to this, I founded PhyLogic Healthcare, which was in a similar space. From 2001 to 2011 that grew from a small firm into a nationwide company, which was then acquired by ADP and became an integral part of ADP AdvancedMD.
Prior to that, Frank and I worked together in growing another company quite successfully. When I think about it, I would say my entrepreneurial drive goes all the way back to high school and college where I had small businesses even back then. I guess it is just part of who I am and what I love to do.
NAN: And how have those experiences helped shape your current work?
MARKUS: Well, I’ve worked for both small and large companies in the past. While large companies tend to bring tremendous resources to the table, I believe smaller companies tend to move more quickly. This is vital in rapidly changing markets such as ours. We can adapt to change and develop technologies around those changes in a much faster manner.
I enjoy that aspect of being an entrepreneur. There are times we’re able to identify a needed solution, program it, implement it, and distribute it successfully before a larger company can even get it off the drawing board.
We’re also able to change directions very quickly. So, if something isn’t working, we’re not married to it. We don’t have to worry about the politics of change. We’re always very open to implementing new ideas if it makes things more efficient and benefits the customer.
For example, in a larger company integrating two different, disparate healthcare software systems is a very time-consuming and expensive ordeal. With our technology, we’ve been able to cut down the average time it takes to integrate two different systems to often less than two weeks.
When you compare that to what some of our competitors are doing, the time to delivery is exponentially shorter. It allows us to serve our clients in a more efficient manner and provides a much better continuum of data between the lab or practice and the insurance payer.
NAN: Can you tell us about some of the challenges the company has faced as a startup?
MARKUS: That’s a great question. Part of the beauty of having done this before is that we stepped on a lot of land mines in the past, learned from those experiences, and then avoided them here. But we’ve also somehow managed to find a few new ones!
Like any entrepreneurial endeavor, challenges always arise. One example for us has been the insurance reimbursement changes affecting our laboratory division. Insurance payers have changed not only reimbursement amounts, but also the coding and billing structures required. To make matters more confusing, there is a lack of uniformity among the insurance payers when it comes to these things.
So, we looked at these challenges as opportunities. Our technology team developed propriety systems that import service information from laboratory information systems, build insurance-specific data and billing structures, and then pass that data onto our RCM systems. This new approach enabled us to not only address the specific challenge, but we also created a highly scalable solution allowing us to processes insurance claims in a fraction of the time it takes many of our competitors.
NAN: How are you building your client base?
MARKUS: In the past, we’ve heavily relied on a web presence in addition to traditional sales models. However, with PractiSource, we have embraced more of a business development approach.
Much of our business is derived through relationships with strategic partners. However, the largest source of new business has been through referrals from our established clients. Word of mouth referrals from existing, satisfied clients is what we strive for—so it is imperative we perform well for them both financially and from a customer service standpoint.
NAN: From an entrepreneurial perspective, why is this business important to you?
MARKUS: I feel very strongly about the importance of independent practices and laboratories in today’s healthcare environment. Our clients do an amazing job providing care and being integral to the healing process. It is gratifying that we can to enable them to do this—and do it in a way that makes financial sense for them.
We also get to work with some truly awesome people here at PractiSource. We’re a family. We’re continuing to hire consistently, and some of the best people we’ve worked with over the course of our careers have joined us.
Working for a startup, especially in the beginning, can be a leap of faith. When so many good people leave great jobs for a career with PractiSource, have the confidence to join our growing family, and become part of something special—I can’t even describe the emotion. I’m just unbelievably honored to be working with everyone here. Together, we have created something amazing.
NAN: What kind of growth have you achieved and where do you think it will go from here?
MARKUS: We’ve been very pleased with our growth. PractiSource currently serves clients from Connecticut to Hawaii and many places in between. Our footprint continues to grow.
From a financial perspective, when we graph our growth since inception it has essentially been a 45 degree course up and to the right. From a percentage view, 2017 saw us grow by well into the triple digits. We are forecasting continued, exceptional growth in 2018.
2017 also saw us expand into new office space here in Connecticut and we expect to add at least one additional location in 2018.
In 2018 we will also announce new PractiSource brands. This is aimed at avoiding confusion between our two divisions. So, in 2018 our clinical laboratory billing and RCM division will branded as LabAgility and the physician RCM division will be known as AgilityMD. We’re really excited about these changes.
NAN: What is it really like to be an entrepreneur?
MARKUS: There are times you ask yourself: Why am I doing this? Especially in the beginning. Often there are days when you take two steps forward and one step back—and other days when you take one step forward and two steps back.
The key to success in this or any other entrepreneurial endeavor is persistence. It’s a lot of late hours. It’s a lot of learning to work smarter and not harder. It’s a lot of absolute persistence in focusing on a goal, achieving that goal, and moving onto the next one.
In my office, I keep a copy of my favorite quote on the subject. It’s by Calvin Coolidge:
“Nothing in this world can take the place of persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent.”
When it comes to being an entrepreneur, these are words to live by! It’s not for the faint of heart, but when you have finally achieved success as an entrepreneur, there is no greater feeling.
Find out more about PractiSource