It’s easy to lose track of time playing “guess how much a C-section costs.” And women undergoing the procedure won’t have an answer until after the baby is delivered.
Turquoise Health, a San Diego health tech company, saw that problem and plastered sonograms across billboards and bus stops, accompanied by the phrase, “the biggest surprise shouldn’t be the hospital bill.”
On its website, one can scroll over the continental United States, zoom into Southern California, and see how much Rady Children’s Hospital charges for a cesarean – or any other procedure.
The health tech company, which recently raised $40 million from investors, originated in the wake of Trump-era price transparency legislation. Under the a federal law, which took in 2021, health care systems, payers, and insurers must report how much they charge for each procedure and appointment with the federal government.
Turquoise compiles that data and sells it to health care providers, payers, employers and life sciences companies.
The company works with 10 of the top 25 health systems, four of the five national payers, nine of the top 10 pharmaceutical companies and six of the top 10 insurance brokers, though anyone can look to the website to compare costs of procedures.
By consolidating fragmented pricing data into a single system, the company aims to turn pricing and negotiation into a faster process. The data can help organizations understand how to better contract with one another and make more cost-effective decisions.
And that is important considering how cash-poor many health care systems are. The most expensive part of American health care doesn’t stem from the actual care. It’s the math that occurs before and after care is administered.
Instead of trying to lower costs by cutting care or paying doctors less, Turquoise is focused on eliminating administrative waste, said Chris O’Dell, president of Turquoise. The problem, he said, lies in a convoluted mosaic of middlemen inflating care costs through back-and-forth negotiations over a private set of codes.
“When you cut all of that out, there’s half a trillion dollars in savings in the U.S. health care system right there,” said O’Dell. “Our view is that price should be agreed upon at the point of care, and that there’s no pay and chase, and there’s no denials, and there’s no, you know, shenanigans administratively.”
One-third of insured adults say they have had a health insurance company deny coverage, according to a poll from January.
“These people help lay the foundation for why we exist,” said O’Dell.
In 2020, Turquoise saw the potential of the new transparency legislation and started a system that could triangulate the data.
“A hospital in San Diego might say, ‘This is what an insurance payer pays me.’ And the payer says, ‘This is what I pay the hospital in San Diego,’” explained O’Dell. And when those numbers match, a price is verified and posted on Turquoise’s database.
But, “you never know what it’s going to cost until the patient’s on the table,” he acknowledged.
Even the hospitals delivering care can’t provide a clear “menu” of procedures and prices. They don’t know upfront what supplies or services a patient will need. Plus, health care providers bundle and label charges differently, and the final bill is often reshaped through insurer negotiations.
Turquoise is a “good starting point,” said Glenn A. Melnick, a health economics and finance expert at the University of Southern California.
While the data is “well-presented,” he said, citing the easy-to-read map and the scrollable rows listing procedure prices, “it doesn’t provide the final answer to every patient.”
His advice: shop around, narrow it down to two or three options, then call those hospitals directly for a quote.
Other companies with similar data include Valenz’s Healthcare Bluebook, Serif Health and a handful of others.
But even after scouring multiple websites and following up with the actual clinic, expect the number to be off, experts warn.
Every procedure — and every insurance negotiation — is different. And even when health care providers and payers report prices for the same procedure, numbers that, in theory, should match, diverged 28% of the time. These are called conflicting rates.
“It’s not because of bad actors. They’re actually not trying to game the system. There are things that are really hard to predict, like what codes (treatment prices) are going to be bundled together when the patient ends up getting the bill,” O’Dell said.
O’Dell shied away from getting into the minutiae of dispute resolutions and site-of-service differentials that drive up the cost of health care. “I try to train myself on saying, don’t try to explain to everyone why it’s so complicated. Just make it simple for them,” he said.
The website has a tiered verification system, where a user can see if the price was pulled from the hospital record or insurance filing, or if they happen to match, in which case, the price is “fully verified.”
Turquoise expects that in the next few years — as the data gets cleaner and their tech can better cross-check the data — more of their estimates will be “fully verified.”
