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The idea is to make healthcare like other industries, where the price is known ahead of time
There's a lot wrong with the US healthcare system, including rising prices and under performance compared to the rest of the world, but maybe the worst is a lack of transparency: when a patient goes to the doctor, they never really know what the out of pocket price of any medical service is going to be until they get the bill. Then the sticker shock sets in.
No other market operates this way; in no circumstance do we buy something without knowing what it costs, except in healthcare, which is why there is a strong drive for price transparency, Angie O’Connell, Executive Vice President, Chief Strategy and Innovation Officer at Transparent Health Marketplace (THM), told me.
"Market forces are always at work but market forces are not always seen. When Adam Smith first articulated his economic concept of 'the invisible hand of the market' in 1759, he must’ve been thinking about our healthcare system in the 21st century," she said.
"The real problem is not there are no market forces at work, the real problem is there is no marketplace. A marketplace provides real time price information, connections, availability, scheduling and payments similar to the travel industry. Competition modulates prices, improves quality and increases availability. Our name says it all: Transparent Health Marketplace. We think Adam Smith would be proud."
On Tuesday, the company announced an oversubscribed $30 million Series C Preferred equity funding round led by ARTIS Ventures. The round also features participation from new investors, including Phase 2 Partners, along with existing institutional and individual investors. This latest round brings THM’s total raised to $57.4 million.
Founded in 2016, THM's marketplace lets providers connect with payers on an open marketplace; the providers can tell insurers what they want to be paid for services, and the insurers can award contracts for that amount.
"Today in the US we are at a fundamental crossroad with respect to the healthcare delivery system. There is incredible social and political pressure to convert the entire system to a Medicare for all single-payer government type model," O'Connell said.
"We think this is the wrong direction. The right direction and our solution is to fundamentally shift and enable true market forces to operate. Our solution is no less audacious than to ultimately ‘marketize’ large sections of the healthcare economy."
The company solves for three constraints in the current healthcare system, the first being that it's wired backwards, which is the reason why patients don’t know the price of any service until they receive a bill. To solve for this, the company built an intelligent pricing algorithm that allows it to accurately price services before they are rendered, personalizing it to each unique patient needs.
The second constraint is that, to shop prices and services, there needs to be a marketplace platform to connects buyer and sellers; THM built its platform to be 100% compatible to work inside what O'Connell calls "the vast multi-trillion healthcare information exchange matrix." Finally, there's the fact that all the functionality needs to connect, schedule, price and pay in real time, which is not how the healthcare system operates today; that's why THM made its solution akin to booking travel, buying products or scheduling restaurant reservations.
"We solved all three and we believe we have removed the key fundamental barriers to system transformation, experience improvement, process acceleration and new benefits we cannot yet imagine," she said.
Through its platform, THM is able to cut weeks of appointment scheduling time down to days in seconds, obsolete call centers, help providers fill calendars, lower the cost of care to payors, return patients to work faster and more. It can also see, in real time, providers competing for patients, prices changing in real time and bookings happening.
The company currently operates in California, working with providers in the physical therapy and imaging spaces, though it plans to expand into new provider types, regional markets, and new verticals.
The new funding will go toward expanding the company's management team, as well as empowering network growth and jurisdictional expansion. A significant portion will be spent on continued software development to accelerate THM’s roadmap and infrastructure. Along with the funding, it was also revealed that Stuart Peterson, Founder and Managing General Partner at ARTIS Ventures, has joined the board of directors at THM.
"Stuart is passionate about transforming healthcare and has been successfully investing in companies across the space for many years. He brings great business insight and deep knowledge of the industry, a true understanding of the business model we are developing and its potential to shape the future of care. THM is pleased Stuart is lending his seasoned track record to the THM board, and looks forward to his continued participation," said O’Connell.
The ultimate goal behind THM is to scale a marketplace capable of bringing shoppable medical services, putting THM tools into the hands of a wide range of payors, providers and consumers of healthcare products and services.
"We intend to expand the marketplace into a wider range of additional medical services and verticals. Success will be a highly accessible, highly scaled multi-jurisdictional platform that has delivered efficiencies and ease-of-use with measurable outcomes to consumers, providers and payors."
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