Industry Watch

Brian Kueppers, founder and CEO

Making a statement

Apex Information Technologies in St. Paul is proving medical bills can be simpler ­— and is growing rapidly as a result

Ever feel so confused about a bill from your health care provider that you need to make a phone call to understand it? You're not alone. The complexity of the U.S. health care system, which makes it difficult for providers to quickly determine what's covered by a patient's insurance, can lead to a trail of multiple bills or unexplained charges to the patient.

A St. Paul company, Apex Information Technologies, has been working for years to improve the situation, winning kudos along the way. A statement processing and business revenue cycle management company, it offers a simplified statement design and billing process so that fewer patients need clarification. It has also promoted electronic payments, which mean reduced costs, better revenue management, and improved business processes.

In April, Apex was honored by NACHA, the electronic payments association, with the 2013 George Mitchell Payments System Excellence Award for "true technology leadership" in advancing online payment processing in the health care industry.

Apex still generates and mails paper bills for most of its 350 clients in health care and other industries, says Brian Kueppers, the company's founder and CEO. "But all our clients are e-enabled in some shape or form, and Apex has the highest market share in the Midwest's eight-state region."

The company's annual revenue has grown from $280,000 in 1995 to about $38 million in 2012 and is projected to grow to $43 million this year.

Kueppers was a finalist in the Ernst & Young Entrepreneur of the Year 2013 program in the Upper Midwest. His entrepreneurial spirit and ability to respond to changing business needs has helped Apex prosper, says Shelly Anderson of the Imaging Network Group, an association for the print, mail, and electronic service provider industry.

Experts say the rise of health saving accounts and high-deductible plans has increased the level of accounts receivables for health care providers, creating fertile ground for companies like Apex to grow. Since 2008, Apex has figured among the fastest-growing private companies in the U.S. on the Inc. 500|5000 list.

Twin Cities–based North Memorial Health Care has had a business relationship with Apex for more than 10 years, says its treasury specialist, Kent Kleppe. Apex produces both paper and electronic bills for North Memorial patients at reasonable costs, Kleppe says. "We look at competing vendors all the time to keep costs down." He's particularly impressed with Apex's employee retention, having dealt with the same account executive over the years. That for him translates into better customer service.

Roller coaster ride

Kueppers started out selling "continuous business forms" in the early 1990s and soon realized he could start his own business offering statement design, print, and mailing services to clients. Thus Apex Print Technologies was born.

The small business continued to grow until a supplier canceled a contract in 2000, threatening Apex's very existence. "We were losing $20,000 each month," Kueppers recalls. That made him virtually reinvent the company. He maxed out credit cards and used a home equity loan to invest in new equipment.

"Those were hard days," he recalls. "I worked from 7 a.m. to 10 p.m. and disciplined myself in the use of my time. I set measurable goals and derived personal efficiencies in 15-minute intervals."

If a phone call to a potential customer didn't work out, Kueppers would move on to the next call without being upset and keeping a positive mind-set. "Negativity accelerates your problems," he says. "My goal was to find what products and solutions fit customers' needs."

By the end of 2000, Apex became profitable again. The lesson learned? It's important to take measured risks to grow business.

After he set Apex on the road to progress, Kueppers focused on marketing, acquiring other companies for talent and business consolidation, and investing in technology. In 2006, when annual revenues crossed the $16 million mark, Kueppers began thinking about ways to respond to a competitive business landscape.

"A successful small business can become a closed environment that may stymie growth," he says. He realized he needed more cash and expertise to develop new technological solutions for his clients, so he talked with a consultant to position Apex for private equity funding and in early 2007 sold a majority stake to Minnetonka-based Tonka Bay Equity Partners. "It gave me the opportunity to move some chips off the table, so my kids can go to college," says Kueppers.

In the last few years, Apex has developed a suite of proprietary software solutions, acquired more businesses, and forged new institutional partnerships to drive e-statements and online payments. "We've been able to hire and acquire very well," Kueppers says.

Apex has helped Allina Health move toward "easy-to-read, patient-friendly statements" says Tim Wenner, director of revenue cycle at Allina Health, which has been a client of Apex for more than three years. It has meant fewer phone calls from patients.

"We haven't used all their tools," Wenner adds. "The integration of online payment with e-statements is the primary next step." That means bringing down the cost of one transaction from about $10 for a paper bill and phone query to about $3 for online billing and payment for the health care provider.

Wenner is particularly pleased with Apex's efforts to involve clients in developing new products and services. It gives peers in the health care industry a chance to see what's developing and to help tweak it if needed, he says.

A team of eight in-house developers continue to add features to Apex's web-based platforms, allowing for easy archiving and retrieval of documents and timely electronic transactions. Apex is also developing a mobile app for e-delivery and payment of bills for patients.

The future is about successfully moving people to electronic transactions to bring down health care costs, Wenner says.

Annually, an estimated $180 billion is spent by payers and providers on billing and insurance-related activities. Many believe the push for electronic health records as part of health care reforms will help promote the electronic transactions for billing, payment, coverage requests, and other administrative transactions that were mandated by the Health Insurance Portability and Accountability Act (HIPAA) of 1996.

"We are making progress on moving those transactions from paper to electronics," but there are impediments to its universal adoption that have more to do with generational attitudes and the inability to see the larger social benefits, says Stanley Nachimson, an independent consultant based in the Baltimore area, with expertise in the innovative use of technology in health care.

Nachimson says that though consumers' share of payments for health care is relatively small compared to what insurers pay, they are likely to become more involved in knowing what they are paying and for what, as the health care industry moves into more quality-based payment measures and shifts more costs to patients. Consumers also would want to understand the alternatives and make decisions about cost, quality, and outcomes, Nachimson says.

The Affordable Care Act will add insurance coverage for millions next year, but the next important step is to teach people how to use it well, to lower costs, and improve health care, he adds.

Andrew Naugle, a Seattle-based health care management consultant at Milliman, a premier global consulting and actuarial firm, thinks health care exchanges, an important component of Affordable Care Act, may drive standardization of insurance products, particularly the way providers and payers interact with each other in the marketplace. "Complexity drives errors and slows down processes," he says. The Act puts pressure on insurance companies to limit their admin costs to increase profitability, Naugle says, which in turn means consumers need to be more alert to spot any billing errors.