Healthcare Blue Book, a healthcare price transparency tool for consumers and employers, raised $7 million from a single, strategic investor, The Martin Companies, according to Jeffrey Rice, the company's CEO. Nashville, Tennessee-based Healthcare Blue Book has been around since mid-2007, but this is its first funding raise. Price told MobiHealthNews the money will mostly be used for scale and growth. He added that Charlie Martin, founder of The Martin Companies, brings a wealth of provider experience to the company as an advisor: Martin was the CEO of Vanguard Health Systems until it was acquired last year by Tenet Health.
"He's worked in the healthcare industry for his entire career, run a lot of different hospital systems. He's started and run a lot of provider organizations," he told MobiHealthNews. "Vanguard Health [was] really an innovative hospital system very much focused on providing better value to patients."
Healthcare Blue Book provides a healthcare price check tool for visits, procedures, and medications, both online and via native iOS and Android apps. Unlike many services that require users to sign in and make an account, the company offers a free version of its search tool anyone can use just by visiting the company's website and entering a zip code. The premium version is available to consumers only via their health plan or employer.
The service also employs an algorithm to give users not just the range of available prices, but also an estimate of what a "fair price" is for a given procedure or medication.
"It's based on what commercial patients pay -- not Medicare and not Medicaid," Rice said. "And we base it off what the typical provider gets paid. It's not just the average, though it usually falls somewhere between the 35th and 50th percentile. It's based on payment range and the supply. We use a really simple benchmark: If I needed this care for myself or my family, what's reasonable?"
Rice said a simple procedure like an MRI can run from $399 all the way up to $3,999 and the average patient has no idea which end of that scale is a fair and reasonable price. He said the company works with "hundreds of employers and scores of health plans" and that millions of searches are conducted on the platform each year. The funding will lead to continuing growth.
"We've been growing for the last three years, we've been profitable, but our growth rate is very rapid," said Rice. "We have a lot of additional capabilities that we're rolling out to our clients."
Just two weeks into 2014, online appointment booking and price comparison tools are already emerging as a mini-trend. UnitedHealthcare announced a price comparison tool for its users at CES, and just this week HealthSparq acquired ClarusHealth Solutions to build out its own cost transparency tools.