Startup backed by a16z, Jonathan Bush wants to help patients compare hospital rates
Most consumers wouldn’t buy a car, rent an apartment, or even order food without knowing the cost. A startup wants to bring the same transparency to healthcare purchases, as new regulations push hospitals to publish prices.
Start Turquoise Health aims to help patients know the prices of health services in advance before they show up for treatment. The company has developed a search engine as a beta search tool that serves as a starting point for users to compare the relative costs of care. Turquoise Health executives said the goal was to make health care shopping as easy as buying a plane ticket.
The San Diego-based startup’s efforts have been backed by leading investors Andreessen Horowitz (a16z), Bessemer Venture Partners and Box Group, as well as tech leaders Henry Ward, CEO of fintech startup Carta, Megan Callahan, president of Lyft Healthcare, and former CEO of Anthenahealth Jonathan Bush. , and NBA champion Klay Thompson.
Turquoise Health has raised $ 5 million in seed funding to expand access to hospital rate data. The company, launched in December 2020, plans to use the new capital to support the development of its price transparency platform. Turquoise’s platform also allows providers and payers to break direct contracts for healthcare pricing transparency.
RELATED: CMS Proposes To Increase Sanctions For Hospitals That Fail To Adhere To Price Transparency Rule
A controversial rule required hospitals to publish payer-negotiated rates online and meet other price transparency thresholds as of January 1, 2021. However, several studies and analyzes have shown that many hospitals did not comply with the requirements. Experts said one of the main reasons is that there is a minimum fee for non-compliance, which is $ 300 for each day the hospital does not meet the requirements.
The Biden administration has proposed sharply increasing penalties for large hospitals that do not make their prices public.
Turquoise Health keeps the data that hospitals publish in order to comply with this new federal law.
The Centers for Medical and Medicaid Services (CMS) also published ongoing requirements for payer price transparency from January 1, 2022 to January 1, 2024.
To help patients know the prices in advance, Turquoise Health has organized more than 175 million previously unavailable healthcare price records. The Turquoise website gives consumers free access to explore hospital prices and understand medical costs, according to the company.
“At Turquoise, we are taking a new approach to price transparency for patients by addressing root causes with upstream supplier and payor contracts. We strive to simplify the transaction process so that patients can understand the total cost up front, ”Chris Severn, CEO of Turquoise Health, said in a statement.
“We also want to reward forward-thinking providers and payers who recognize the potential for transparency and simplicity to transform the market and ultimately deliver clear value to the patient,” he said.
Prior to Turquoise, Severn worked with hospitals on revenue cycle software. Turquoise CTO Adam Geitgey brings his experience in the consumer market since his time as CTO of Engineering at Groupon.
RELATED: Only 1 in 10 Patients Know Hospitals Are Now Required to Publish Prices Online, Survey Finds
“The payer-provider interface is one of the most complex areas in healthcare, and consumers have paid the price for the opaque and labyrinthine way in which prices and pay-provider contracts have always been established,” he said. said Julie Yoo, general partner at Andreessen. Horowitz in a statement.
“Turquoise is uniquely positioned to take advantage of recent regulatory tailwinds and shifts in consumer expectations to transform healthcare purchasing, pricing and contracts into a vibrant and transparent marketplace,” Yoo said.
Klay Thompson, three-time NBA champion, founder of the Thompson Family Foundation and member of the Golden State Warriors also joined the round to help bring visibility to patients.
“I am proud of the work Turquoise Health does to help patients understand the price they are paying for their health care needs. Every family deserves transparent awards and I am delighted to help Turquoise change healthcare for the good of all, ”he said.