The company uses hospital price data and enables consumers to purchase prices for their health care
One of the most frustrating things about the healthcare system (and there are many!) Has long been the lack of price transparency. Paying for health care is literally different from anything else: patients go to the doctor without knowing what it will cost and then wait months for a bill to come up. When it does come, they have no idea why they were charged, what they were charged, and no way to fight it.
Fortunately, Congress finally decided to do something about it after it passed the hospital price transparency rule that went into effect in January this year. The legislation requires all hospitals in the US to publish a public price list for all of their services, which means what each insurance company pays them for each of their medical procedures. In addition, tYou will also need to provide a web patient estimation tool that will allow patients to find out in advance what they will be paying, either through their insurance company or out of pocket if they are not insured.
While all of this data is now publicly available, it is also difficult to compare one hospital to another as it has been published on each hospital’s website. This is where Turquoise Health comes in: The company has aggregated all of these public files, curated over 175 million records, and brought them into a standardized and structured database that patients can use to purchase prices for their health care.
“We really want to simplify these transactions and greatly simplify the complexity of these financial relationships. This has not been possible before, but with this new price transparency legislation, which obliges hospitals to book all their tariffs from January 1st of this year, and payers to publish their prices in January of next year, the industry is really pushing to be much more open and to be more price transparent, “said Marcus Dorstel, Head of Operations at the company.
On Thursday, Turquoise announced it had a $ 5 million seed funding round led by Andreessen Horowitz (a16z) with Bessemer Venture Partners, the Box Group, individual investors Henry Ward, Megan Callahan, Jonathan Bush and NBA champion Klay Thompson Raised US dollars.
Different actors in health care
Turquoise has a patient-centric tool that can be used to search for different prices and services based on distance from their home, price and quality. The most popular searches are MRIs and imaging, followed by joint replacements, childbirth, colonoscopy screenings, mammography screenings, and cardiac diagnostics such as echocardiograms and EKGs.
This tool is free and not monetized; therefore the company mainly earns its money with Vendors and payers who pay Turquoise for licensing Data that they then use to determine prices in their market so that they have an edge when negotiating a contract.
The idea is to bring the two sides, who are often at odds because of different goals (payers want low prices, hospitals want high prices), to one side.
“When the providers come to the table with the Blue Cross next year, they will know exactly what the Blue Cross pays every other hospital in their market and can use this for their negotiations and the same on the payers side – other insurance companies pay the same hospital for the same services” explained Dorstel.
“We position ourselves with the services we offer and the products that we have as a neutral party like Switzerland in order to ultimately facilitate this previously controversial negotiation and make it a little less controversial.”
In addition to the payers and providers, turquoise is also used by other health care stakeholders, including pharmaceuticals and Medical device companies that use it to view the charges for their devices in the market and see which competitors are in different regions. It is also used by Benefits Advisor, Consultants, Revenue Cycle Consultants and other digital health companies.
“Digital health companies have a variety of uses for this, but many would like to bring this data into their product platform as another data point to make their product even better. Think of a patient care app that acts as a front end for patients to guide them.” to doctors and services; the introduction of price information is very relevant for this, “said Dorstel.
After all, the data is too Licensed to academic institutions and has been used in a number of research papers and articles and doctoral theses to date.
Turquoise will use the new funding to further build the product and grow its team, particularly its sales and development teams. The company now has six employees and expects to at least triple that number to 20 or 25 by the end of the year.
The biggest change in law in years
Many changes are taking place in healthcare right now, including the transition to value-based care and the rise of virtual care and telemedicine. But Dorstel sees them Price transparency like “some of the biggest legislative changes in the US healthcare system in years. ”
He believes that once consumers can shop their health care online as they would for a hotel or a flight, the entire health system will adapt to patient needs.
“It will really bring in a much more savvy medical service buyer, but it will take time. So it will be interesting to see this paradigm shift in consumer behavior, and if the consumer changes, it all follows, the payers have to adjust, the care providers adjust, the health industry is ultimately patient-focused and if the patient’s behavior changes changes, this will bring about a lot of other changes, which I’m personally very excited to be doing. “
The ultimate goal in all of this is, of course, to lower the overall cost of care for both the patient and the service provider, and Dorstel sees transparency as the way to finally achieve this: when one hospital has five times higher prices than another, now that this is transparent they either have to justify it or bring the price down to the market rate.
“What we’re going to see right now, or at least here for the next year or two, is that payer and provider are negotiating contracts and using that market price data the prices are moving more into market price equilibrium,” he said.
“Let’s see if it’s possible for US health prices to fall year over year for the first time in history.”