Venture funding in the overall health tech market fell 27% from 2022Read more...
The company will use the funding to build out its technology, including AI and machine learning
The adoption of the Hospital Price Transparency Rule in 2021, which requires hospitals in the US to post a public file of the price for all their services, as well as a patient estimator web tool, changed healthcare. Finally, patients could figure out what they're going to pay beforehand, either through their insurance or out of pocket, while providers can use it to price competitively.
Turquoise Health has taken advantage of this change, aggregating those public files, curating them, and bringing them into a standardized and structured database that patients can use to price shop for their healthcare.
On Tuesday, the company announced a $30 million Series B investment led by Adams Street Partners, with participation from Yosemite, as well as existing investors Andreessen Horowitz and BoxGroup. This is the company's first funding round since raising a $20 million round in March 2022.
Founded in 2020, Turquoise has a patient-facing tool that can be used to search for different prices and services based on distance to their home, price, and quality. They can search for services such as MRIs and imaging, joint replacements, childbirth, colonoscopy screenings, mammogram screenings, and cardiac diagnostics, such as echocardiograms and EKGs.
That tool is free and unmonetized; therefore, the company makes its money primarily from providers and payers, who pay Turquoise to license the data, which they then use to figure out what the rates are in their market, so they can have an advantage when they enter into a contract negotiation.
In addition to the payers and providers, Turquoise is also used by other stakeholders within the healthcare space, including pharmaceutical and medical device companies; they use it to see the rates being charged for their devices in the market, as well as how much their competitors are paying in different geographies. It's also used by benefits advisors, consultants, revenue cycle consultants, and other digital health companies.
More recently, the Turquoise platform has expanded to support payer and provider contract management, consumer transparency compliance, and advanced platform-based analytics as well.
"Since 2022, price transparency data has come a long way. From the hospitals and the payers, it just continues to improve, and we just have a much more complete picture today of healthcare pricing in America. And so, that's really enabled us to build these new products that we have," Marcus Dorstel, VP of Operations at Turquoise Health, told VatorNews.
"Compliance and contracting build on or leverage this data and help providers and payers either work within the realms of this legislation and comply with this legislation or enable them to build out their contracts and manage their contracts, really manage all this, these reimbursement rates in these health care prices, and build towards a less administratively burdensome system and simpler pricing at the end of the day."
These new products allow Turquoise to handle the full lifecycle of price transparency, from the negotiation of those contracts to the management of those contracts and those rates to the ability to understand them clearly and build out organization matrixing of those contracts to manage them across the organization.
There are now over 160 healthcare organizations working with Turquoise Health, and a lot of the ROI comes from reducing that administrative burden, reducing the number of touches that a claim needs until it gets paid, and reducing the number of denials, all of which drive significant revenue for providers and for payers.
"That administrative burden really sits on both sides of the island so it helps that what we're building is helping both sides so both parties can really come together on it," said Dorstel.
Turquoise will use the funding to build out its team, which currently consists of over 100 employees, including the engineering and product teams. It will also be used to build out the product, including streamline the data processing, while also making data more accessible or more serviceable for its customers, including investments in artificial intelligence and machine learning.
The company has already integrated AI into its clear contract software, so it's being used to be able to help organize contracts, and then also help find relevant information within a customer's contracts or even within reference data across the board.
"That's a key place where, when we talk about reducing administrative burden, there are clinical policies, there's provider manuals, there's payer policies, there's so many documents dispersed across the Internet and across different portals," said Dorstel.
"Now we have the ability to bring that all into one place and to use AI to intelligently ask questions, query against all that, and receive responses and a direct reference of where that information is held, versus having somebody read through pages and pages of PDF documents and whatnot."
A lot has happened in healthcare over the last few years that have affected Turquoise's business, including increasing consolidation, with more mergers and acquisitions, as well as an increasing move of employers wanting to get a better handle on their healthcare spend, trying to work with their carriers. As such, there are more cases of payers and providers falling out of network and disputes around that.
"All of that is really centered around, at the end of the day, healthcare prices, the reimbursement rates, and the revenue implications of all those rates. And so, what we're building really is meant to support our customer's knowledge and ability to work with all that," said Dorsel.
Ultimately, what Turquoise really wants to do is to get payers and providers on the same side, which is the opposite of what most organizations in healthcare do, which take one side against the other.
"In terms of looking macro what's been happening in healthcare, that's really just encouraged us on the work that we're doing and the products that we're building. That, not only is there a market for it, and desire for it, but what it will actually help a lot of these organizations partner together more efficiently," Dorstel said.
"We're uniquely positioned in this neutral state to support both and, by supporting both, really able to bring both together to partner more efficiently."
(Image source: turquoise.health)
Support VatorNews by Donating
Read more from our "Trends and news" series
Veda will use its automation technology to analyze, verify, and standardize Humana’s dataRead more...
GE HealthCare will use Biofourmis’ AI-guided algorithms to deliver personalized, at-home careRead more...