Most consumers wouldn’t buy a car, rent an apartment or even order food without knowing the cost. One startup wants to bring that same transparency to healthcare shopping as new regulations push hospitals to publish prices.
Startup Turquoise Health aims to help patients know prices for healthcare services upfront before they show up for treatment. The company developed a search engine as a beta 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 San Diego-based startup's efforts gained backing from major investors Andreessen Horowitz (a16z), Bessemer Venture Partners and Box Group as well as tech leaders Henry Ward, CEO of financial tech startup Carta, Lyft Healthcare president Megan Callahan, former Anthenahealth CEO Jonathan Bush, and NBA champion Klay Thompson.
Turquoise Health raised $5 million in seed funding to expand access to hospital rates data. The company, launched in December 2020, plans to use the fresh capital to support the development of its price transparency platform. Turquoise's platform also enables providers and payers to broke direct contracts to healthcare price transparency.
A controversial rule required hospitals to post online payer-negotiated rates and meet other price transparency thresholds starting on Jan. 1, 2021. However, several studies and analyses have shown that many hospitals are not complying with the requirements. Experts have said that a major reason is that there is a minimal fee for noncompliance, which is $300 for each day the hospital does not meet the requirements.
The Biden administration has proposed sharply raising penalties for larger hospitals that don't make their prices public.
Turquoise Health curates the data that hospitals post in order to comply with that new federal law.
The Centers for Medical and Medicaid Services (CMS) also has released rolling requirements for payer price transparency starting January 1, 2022 through January 1, 2024.
To help patients know prices up front, Turquoise Health has curated over 175 million records of previously unavailable healthcare rates. The Turquoise website gives consumers free access to explore hospital pricing and understand medical costs, according to the company.
“At Turquoise, we’re taking a fresh approach to price transparency for patients by addressing the root causes with provider and payer contracts upstream. We’re working to simplify the transaction process so that patients can understand the total cost upfront,” said Chris Severn, CEO of Turquoise Health, in a statement.
“We also want to reward forward-thinking providers and payers who recognize the potential for transparency and simplicity to transform the marketplace and ultimately deliver clear value to the patient," he said.
Prior to Turquoise, Severn worked with hospitals on revenue cycle software. Turquoise chief technology officer Adam Geitgey brings consumer marketplace experience from his stint as director of engineering at Groupon.
“The payer-provider interface is one of the most complex zones of healthcare, and consumers have borne the brunt of the opaque and labyrinthine manner in which payer-provider pricing and contracting have historically been done," said Julie Yoo, general partner at Andreessen Horowitz in a statement.
"Turquoise is uniquely positioned to take advantage of the recent regulatory tailwinds and shifts in consumer expectations to transform healthcare shopping, pricing, and contracting into a dynamic 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’m proud of the work Turquoise Health is doing to help patients understand the price they are paying for their healthcare needs. Every family deserves transparent pricing and I’m excited to help Turquoise change healthcare for the benefit of all,” he said.