Price transparency startup Turquoise Health picks up $30M series B funding

Price transparency data startup Turquoise Health clinched $30 million in fresh funding to build out its capabilities.

Regulators continue to step up price transparency requirements for providers and payers and that's driving demand for Turquoise Health's services and offerings.

The company launched in December 2020 with a focus on helping patients know prices for healthcare services upfront before they show up for treatment. Turquoise Health developed a search engine as a research tool that serves as a starting point for users to compare relative costs of care. Turquoise Health executives said the goal is to make shopping for healthcare as simple as buying a plane ticket.

The company aims to eliminate the financial complexity of healthcare, executives said. Using Turquoise Health's website, consumers can search for shoppable healthcare services and also can research providers to view services and quality of care.

The series B investment was led by Adams Street Partners, with participation from Yosemite, as well as existing investors Andreessen Horowitz and BoxGroup.

The company banked $20 million in funding in May 2022 and has raised $55 million to date.

Turquoise will use the funding to further support transparent pricing workflows across its customer base of over 160 healthcare organizations.  

"Healthcare pricing remains frustratingly opaque for many industry stakeholders, including patients," said Tom Bremner, partner at Adams Street, in a statement. "Turquoise tackles this problem head-on with a sophisticated, multi-stakeholder platform that ultimately makes healthcare pricing and packaging look easy. I am excited to partner with the team as they scale towards a seamless healthcare transaction."

The company launched at the same time that a controversial rule went into effect in January 2021 requiring hospitals to post online payer-negotiated rates. The law requires all hospitals to make their prices publicly available via a machine-readable file (MRF). Turquoise Health's data is sourced from the machine-readable files posted by the hospitals themselves as a part of compliance with the government's price transparency rule.

Leveraging data on these negotiated rates, Turquoise is building an AI-based platform to support payer and provider contract management, consumer transparency compliance and advanced platform-based analytics.

Last year, the startup launched its direct contracting platform, which executives describe as a SaaS platform that streamlines the direct contracting process between providers and purchasers atop a foundation of pricing data. The platform, called Clear Contracts, will support single-case agreements, retrospective out-of-network agreements and group health agreements. Today providers and purchasers connect on the Turquoise Platform to negotiate, redline, and sign data-driven contracts. 

The new capital will help facilitate onboarding from recent customer expansion into these products, executives said.

“As we see price transparency legislation take shape through 2027 and beyond, Turquoise accelerates support for healthcare organizations as they embed transparency and simplicity at every step in the transaction,” said  Turquoise CEO Chris Severn.

The company now works with 30 health systems, including The Mass General Brigham Health System.

“We’re eager to work with Turquoise towards simplified administration and a clearer conversation with our patients, plans, and care providers around value,” the system’s CFO, Niyum Gandhi, said in a statement.

“The complexity and opacity of healthcare pricing disproportionally burdens patients undergoing high-cost treatment like cancer therapy,” said Matt Bettonville, an investor at Yosemite. “Price is the mechanism that allows market forces to work, so the lack of clear pricing in healthcare has been a major driver of inefficiency in the industry. As the leader in aggregating and normalizing healthcare pricing data, Turquoise is advancing price transparency to help lower healthcare costs and empower patients to make informed care decisions.”