STARTUP RAISES $20M FOR TECH TO COMPARE HEALTH CARE COSTS

Turquoise Health curates price records for different medical procedures

Turquoise Health, a San Diego startup that aims to enable price shopping for health care, has raised $20 million from marquee venture capital firms Andreessen Horowitz, Bessemer Ventures, Box Group and Tiger Global.

Launched in 2020, the company has built a subscription software platform that curates millions of price records published by hospitals. These records were secret until Jan. 1, 2021, when federal rules kicked in requiring hospitals to publish their prices for some 300 procedures, including the negotiated rates they’ve hashed out with insurers.

But even today, price records can be hard to find and unpack on hospital websites, and compliance with the rules has been spotty, according to Turquoise Health.

Anyone can look up pricing data on Turquoise Health’s website for free. For now, the company makes money by licensing the information and delivering deeper analysis to researchers, hospitals and insurers. Employer groups, for example, could use the data to find betterpriced providers. Hospitals and insurers could use it in contract negotiations.

But eventually, Turquoise wants to be a matchmaker marketplace — where willing insurers and hospitals participate to shop based on real-time price dif

ferences for certain procedures.

Prices for common procedures like MRIs can vary widely from hospital to hospital in a region. In an interview last summer, Turquoise Health Chief Executive Chris Severn said patients could save significant amounts by driving 30 minutes out of their way.

In most cases, however, patients can’t actually price shop for health care. They’re locked into their insurance network. Moreover, faced with fluctuating billing guidelines and broken data infrastructure, hospitals struggle to quote clear prices up front, according to Turquoise Health.

Using the published pricing data, Turquoise thinks it can lower costs by creating a flexible, transparent marketplace for hospitals and insurers.

“We’re committed to a vision of the new “pre-revenue cycle” where patients and payers know the costs upfront, and providers become accustomed to real-time payment for shoppable services,” said Severn.

Turquoise Health recently introduced Clear Contracts — a software tool that facilitates negotiations based on pricing data. It includes single-case agreements, retrospective out-ofnetwork agreements and group health agreements, among other things.

“By creating a clean, easy-to-use direct contracting platform, Turquoise Health is shifting the industry’s focus towards complete financial certainty prior to care — ultimately resulting in less friction between patients, providers and payers,” said Severn.

Severn worked for a decade in hospital finance before founding Turquoise with Chief Technology Officer Adam Geitgey, formerly a director of engineering at Groupon. The company previously raised $5 million in seed funding with NBA star Klay Thompson among the investors. The company has 30 full-time employees and 55 customers to date.

“The payer-provider interface is one of the most complex zones of health care, and consumers have borne the brunt of the opaque and labyrinthine manner in which payerprovider pricing and contracting have historically been done,” said Julie Yoo, general partner with Andreessen Horowitz. “Turquoise is uniquely positioned to take advantage of the recent regulatory tailwinds and shifts in consumer expectations to transform health care shopping, pricing and contracting into a dynamic and transparent marketplace.”