Turquoise Health, a healthcare price transparency startup, raised $20 million in Series A funding led by Andreessen Horowitz, Axios has learned.
- Existing investors Bessemer and Box Group participated in the round, with Tiger Global joining as a new investor.
Why is this important: Prices for health care services have always been kept secret, but new laws mandating price disclosure are opening up new possibilities around what Turquoise envisions as the “pre-revenue cycle.”
- Turquoise of San Diego aims to be the platform through which payers and patients can learn about and compare provider and procedure costs in advance, ultimately leading to better decision-making, the co said. -founder Chris Severn at Axios.
Driving the news: The funding will support the rollout of Turquoise’s new direct contracting platform, Clear Contracts.
- Self-insured payers, providers, care navigators and employers already pay for Turquoise’s data, but then leave the platform – taking that data to guide purchasing decisions and build contracts around rates of the market.
- Today, Turquoise is creating what Severn describes as a SaaS-based B2B marketplace for buyers and suppliers. “Clear Contracts allows people to stay on the platform to negotiate contracts,” he says.
- Its data product is licensed through an annual recurring fee, and Clear Contracts will be licensed on the use of the platform.
Catch up fast: Turquoise debuted, and $5 million in seed funding, in 2021 after new federal rules required hospitals to make health care prices public.
- From July 1, additional new requirements around non-hospital payer rate disclosure will come into effect.
- “The open secret in the industry: there really is no price for health care,” says Severn. Instead, payers and employers are shaking hands with hospitals and providers using unstandardized formulas. “It’s a jungle. All data is siled”
- Therefore, Turquoise began to collect and simplify this data – and by putting it on his site free – so that it can be better understood by patients and others.
Reality check: In December, a Wall Street Journal report disclosed that some of the country’s biggest chains have yet to comply.
- The laws “virtually fell from the sky,” says Severn. “We are at the stage of acceptance, past denial. And now in [a period of] reluctance of payers and suppliers.
Enlarge: Turquoise has now raised just north of $25 million.
- The startup has more than 70 customers across payers and providers, and Severn says Turquoise generates “millions” in revenue.
- Its previous funding round led by a16z included several individual investors, including former Athenahealth founder and current Zus Health founder Jonathan Bush and Golden State Warriors guard Klay Thompson.
💍 A funny thing: Severn named her startup after Turquoise Street in Pacific Beach, San Diego, where her fiancé lived when they first met. The couple are getting married in just over a week.
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