Earlier this month, we covered Castlight’s whopping $100 million series D investment — one of the largest venture rounds raised by a healthcare IT startup to date. The reason? Castlight is on a mission to bring price transparency and comparison tools to healthcare through a B2B service that provides self-insured companies with the ability to let their employees compare quality and costs across a variety of medical procedures.
With the cost of healthcare skyrocketing and insurance premiums on the rise, there’s a serious need for price transparency in healthcare — and a growing movement to put consumers back in control of their health by reforming the system so that care providers display the prices they charge for appointments, treatments, and procedures.
Founded in 2009 by Scott Sangster and incubated in healthtech accelerator Rock Health’s inaugural batch, HealthInReach is tapping into this need by offering a transparent online marketplace for healthcare. The startup has essentially devised a consumer-focused (or B2B2C) complement to Castlight, whereby those who are uninsured or pay out-of-pocket for medical procedures can use its marketplace to search for and learn about doctors, dentists, based on experience, reputation and prices.
The providers on HealthInReach are specific to those offering dental, vision and elective care — a bit different than the focus of Castlight — but an equally sizable market. HealthInReach Founder Scott Sangster tells us that more than 130 million Americans are currently living without dental insurance and collectively pay billions of dollars in out-of-pocket expenses because the system doesn’t allow them to find out the price of procedures in advance or compare available, local care options.
As mentioned, reform is badly needed in this regard. Met with high out-of-pocket expenses or high deductibles, consumers want better ways to reduce costs without forgoing their essential healthcare needs. So HealthInReach has built a resource which provides consumers with a single destination to research costs of particular medical or dental procedures, take advantage of pre-negotiated group discount rates, and, after locating the best option, schedule their appointment online.
Because processing insurance paperwork is a pain in the ass for doctors, patients who pay out-of-pocket represent cost-savings. HealthInReach groups self-paying patients and allows doctors to pass savings to people who book appointments online. The resource gives doctors, dentists, and optometrists a searchable database by which they can be more easily discovered, share their necessary info and prices, and convert anonymous clickers into paying customers/patients. And therein one finds the startup’s business model. For every conversion, HealthInReach takes a cut.
On the flip side, for the consumer, HealthInReach makes it easier to find new dentists, optometrists and doctors who specialize in elective procedures — anything from botox to lasik — gives them price and quality comparison tools, discounted rates, as well as education, training, and patient reviews. To date, over 3 million people have used the service to look for doctors.
However, from the outset, HealthInReach intentionally limited its market to southern California (the startup is headquartered in LA), but it’s been looking to expand nationally and grow its database of doctors, optometrists and dentists. To do so, the company is today announcing that it has merged with PriceDoc, a startup which has been on a very similar mission — to build an online marketplace that connects healthcare providers with consumers looking for medical and dental procedures.
Founded in 2008, PriceDoc, like HealthInReach, provides consumers with comparative pricing tools on medical, dental, vision, chiropractic, allied health and elective procedures, as well as the ability to dig down into information on the practice and its doctors’ credentials.
Although the specific terms of the deal were not disclosed, the combined company will operate as HealthInReach, with Scott Sangster continuing as operating CEO. Together, the two companies now offer more than 1.6 million appointments every month and descriptions and prices for about 50K specific procedures. Just as before, users can book appointments, receive reminders, and lock-in discounts before they show up at the doctor’s office.
HealthInReach has developed a proprietary database and uses patented technology to compare dynamic pricing schemes that display prices not in the past (from historical data, like Castlight) but in the future. Although HealthInReach was already employing this tech, its reach was minimal, whereas PriceDoc had built a much deeper and more national database of practices. Now, the two can leverage the tech and the database to offer a more robust service.
The companies have integrated their services and officially launch the “new HealthInReach” today. Of PriceDoc’s three co-founders, CEO Bob Kurilko will be staying on as an advisor, President Patrick Bradley will be joining the board, and Chief Medical Officer Julian Henley will be returning to Yale, where he is a practicing MD. As of today, PriceDoc, as an independent entity, is officially kaput, and its web services will be shut down in the coming months.
Collectively, the two startups have raised over $6 million in venture funding. And, of course, it’s worth mentioning that, in the online medical appointment booking space, HealthInReach obviously faces serious competition from its largest player, ZocDoc, although it’s currently doing little in the way of price comparison/transparency, arguably a much larger problem than online booking. Though it depends, of course, whom you ask.