SAN DIEGO – Turquoise Health is poising itself to become a major player in bringing price transparency to the healthcare industry.
The San Diego-based software company announced last week it had raised a $30 million Series B that will fund facilitating the onboarding of its recent expansion of customers – now comprised of a base of more than 160 healthcare organizations.
“These are large health systems and require a lot of our time to implement,” said Turquoise CEO Chris Severn, adding that funding will go toward advancing the software platform staffing up to around 150 employees this year. Last year, the company doubled its size from 55 to 110 employees.
Turquoise Health built its pricing platform to bring transparency to “a triangle” of payers, providers and patients “and to make sure everybody in that triangle can quote package prices, they know the price of care.”
The platform itself is also a three-fold approach. The first is a product that gathers data used to set prices. The Turquoise team has sifted through countless databases to provide users with valuable cost comparisons. The second aspect is a product that structures the data into contracts.
Turquoise has employed the use of generative AI to process the large amounts of healthcare documents like PDFs and Excel spreadsheets needed to bring accuracy and transparency to healthcare pricing.
“The final product is compliance,” Severn said, explaining that the requirement to show healthcare pricing is “really a consumer product.”
“This year, with this funding, we’re really investing in our consumer product suite – actually showing the prices negotiated to San Diegans, New Yorkers. We have 60,000 people a month on our site already and that’s not spending any money marketing it,” he added.
Part of the reason Turqoise has not found the need for marketing is because of new government regulations mandating transparency in healthcare — two executive orders by the Trump administration and the No Surprises Act passed by Congress — that went into effect in early 2021.
“The only reason this exists is because of new federal laws,” Severn said.
Since its founding in 2020, Turquoise has emerged as a leader in the healthcare price transparency space. The platform has already attracted marquee customers such as Mass General Brigham Health System, whose CFO Niyum Gandhi said is “eager” to work with Turquoise and bring “simplified administration” and a “clearer conversation” with “patients, plans, and care providers around value.”
Severn said that besides Turquoise, there are only “a couple of handfuls” of startups addressing the transparency requirements and most of the company’s competition is still from legacy companies that are slow to adopt transparency in their platforms.
“They’re working with the old rules, the rules before the price transparency laws,” he said.
The strong pull on the market that incumbent healthcare software providers have, along with the high level of subject expertise needed and high amount of capital needed to succeed in the healthcare space is a barrier to entering the market, Severn said, but is an opportunity for companies like Turquoise that launched before the transparency laws went into effect in 2021 and have attracted investors.
The $30 million Series B round was led by Adams Street Partners, with participation from Yosemite, as well as existing investors Andreessen Horowitz and BoxGroup.
“Healthcare pricing remains frustratingly opaque for many industry stakeholders, including patients,” said Tom Bremner, a partner at Adams Street, who will join Turquoise’s board of directors. “Turquoise tackles this problem head-on with a sophisticated, multi-stakeholder platform that ultimately makes healthcare pricing and packaging look easy. I am excited to partner with the team as they scale towards a seamless healthcare transaction.”
CEO: Chris Severn
HEADQUARTERS: San Diego
BUSINESS: Software development for transparency in healthcare
FUNDING: $55 million (Series A and B)
NOTABLE: Severn has testified before the House Committee of Energy and Commerce Subcommittee on Health to testify on the current state of price transparency, its impact and what’s to come.