Most consumers would not 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 post prices.
Start up Turquoise health aims to help patients know the prices of health care services in advance before they present for treatment. The company developed a search engine as a beta research tool that serves as a starting point for users to compare the relative costs of care. Turquoise Health executives said the goal is to make shopping for health care as simple as buying a plane ticket.
The San Diego-based startup’s efforts garnered endorsement from top investors Andreessen Horowitz (a16z), Bessemer Venture Partners, and Box Group, as well as tech leaders Henry Ward, CEO of fintech startup Carta, President Lyft Healthcare 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 rate data. The company, launched in December 2020, plans to use fresh capital to support the development of its price transparency platform. The Turquoise platform also enables providers and payers to break direct contracts with transparency of healthcare prices.
RELATED: CMS Proposes Increasing Penalties for Hospitals Failing to Comply with Price Transparency Rule
A controversial rule required hospitals to post payer-negotiated rates online and meet other price transparency thresholds as of January 1, 2021. However, various studies and analyzes have shown that many hospitals do not meet the requirements. . Experts have said that one of the main reasons is that there is a minimum fee for non-compliance, which is $ 300 for each day that the hospital does not meet the requirements.
The Biden administration has proposed dramatically increasing penalties for larger hospitals that do not disclose their prices.
Turquoise Health curates data released by hospitals to comply with that new federal law.
The Centers for Medical Services and Medicaid (CMS) have also published ongoing requirements for payer price transparency from January 1, 2022 through January 1, 2024.
To help patients know prices up front, Turquoise Health has curated more than 175 million health care fee records that were previously unavailable. 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 providers and upstream payers’ contracts. We are working to simplify the transaction process so patients can understand the full up-front cost, ”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 CTO Adam Geitgey brings consumer market experience from his tenure as chief engineering officer at Groupon.
RELATED: Only 1 in 10 Patients Know Hospitals Now Must Post Their Prices Online, Survey Finds
“The payer-provider interface is one of the most complex areas of healthcare, and consumers have endured the brunt of the opaque and labyrinthine way in which pricing and payer-provider contracting have historically been done,” Julie Yoo, a general partner at Andreessen Horowitz, said in a statement.
“Turquoise is uniquely positioned to take advantage of recent regulatory tailwinds and shifting consumer expectations to transform healthcare purchasing, pricing and contracting into a dynamic and transparent market,” Yoo said.
Klay Thompson, a three-time NBA champion, founder of the Thompson Family Foundation, and a member of the Golden State Warriors also joined the round to help raise awareness for patients.
“I am proud of the work Turquoise Health is doing to help patients understand the price they are paying for their health care needs. All families deserve transparent pricing and I am excited to help Turquoise change health care for the benefit of all, ”he said.