In an effort to improve price transparency in healthcare, laws have been passed to give consumers more cost information upfront, but it can still be difficult to access that information. Now, where health organizations, including hospitals, have issues complying with the rules, companies like healthcare pricing platform Turquoise Health are vowing to help.
On Wednesday, the San Diego-based startup announced it raised $20 million in Series A funding led by existing investor Andreessen Horowitz (a16z) to make transparent pricing ubiquitous in healthcare. The company works with payers and providers to deliver healthcare pricing data, and it offers a free search engine for patients to view hospital prices. It plans to make more pricing data available through its search engine soon, when payers are required to share that for all providers and care settings beginning July 1.
Pulling back the curtain on healthcare pricing is easier said than done, acknowledged Chris Severn, the company’s co-founder and CEO. That’s exactly why the investment is so important. He said the money will help pay for the backend work and software needed to understand what something as simple as a colonoscopy actually costs—where for a single procedure there’s a facility fee, doctor’s procedure fee and anesthesia fee, and it has to be determined what a patient’s health plan is paying for each.
“Building software that makes it easy to quote that price on the fly – that’s what we’re focused on,” Severn said.
The major difference today with pricing transparency in healthcare is that providers and payers don’t have a choice. There are now protections against surprise medical bills, hospitals are required to make pricing available upfront, and, beginning July 1, health plans will have to give patients access to pricing information.
“Now there’s a huge change in the landscape,” Severn said. “There’s way more favorable federal legislation on our side,”
He sees Turquoise Health’s latest raise as a sign of what’s to come for investment in companies that work to improve pricing transparency in healthcare.
“This really signals a renewed commitment from the investment community towards having transparent prices in healthcare,” he said.
In addition to a16z, Bessemer, Box Group and new investor Tiger Global also contributed to Turquoise Health’s Series A funding round. a16z General Partner Julie Yoo will join Turquoise Health’s board of directors.
Turquoise Health also announced that is has launched its direct contracting platform, Clear Contracts, a software-as-a-service platform that streamlines the direct contracting process between providers and purchasers in anticipation of July 1 payer rates disclosures, according to the company. Ultimately, the company is working to make pricing data more readily available, so its easier to negotiate contracts, Severn said.
Other companies, too, from Deloitte to Accenture provide pricing data to help healthcare organizations understand costs and negotiate accordingly.
But Severn said his company is trying to make that data more accessible to health providers of all sizes. While its own pricing varies, he said that the company takes into account the geographic area—say a small city, versus statewide—for which a health provider might wish to get pricing data, and charges accordingly.
“We’re trying to facilitate a healthy economy in healthcare—which has never existed,” he said.
Photo: adventtr, Getty Images
