One of the biggest roadblocks to reducing costs in the American healthcare system is the system’s inherent lack of transparency.
Most healthcare networks and hospital systems can’t even accurately account for the doctors they manage and which insurance plans those doctors accept — let alone how good those doctors actually are at providing care, according to Ribbon Health chief executive Nate Maslak.
The former healthcare consultant founded Ribbon Health to address just that issue, and the company has raised $10.25 million in new financing to roll out its software services to a broader network of payers, providers and digital health companies.
The new financing was led by Andreessen Horowitz, and included Y Combinator and the New York-based investment firm BoxGroup. Individual healthcare executives like Nat Turner, the chief executive of Flatiron Health; Vivek Garipalli, chief executive and co-founder of Clover Health; and Eric Roza, the former chief executive of DataLogix, also participated in the financing.
It’s the first deal for Andreessen’s newest healthcare-focused partner, Julie Yoo, and is in an area with which Yoo is quite familiar. The former serial healthcare entrepreneur developed a similar business to tackle better data collection and delivery for hospitals at Kyruus.
Taking an API-based approach, Ribbon Health is building on the Kyruus approach, Yoo said, with the potential to expand across the entire breadth of the American healthcare system.
Simply, Ribbon Health is trying to create an accurate database of what doctors and health plans have, which specializations offer their services to which insurance providers, and produce the best outcomes for patients.
“$700 billion wasted because of poor decisions,” said Maslak. “The information not flowing to the right place at the right time. Over a third of healthcare spending is wasted and we think that over half is data-addressable.”
“The majority of decisions in health care rely on data about a provider or health plan, yet our industry lacks the systematic infrastructure to centralize this information and contextualize it for those who need it. There is a clear need for a single platform that can provide comprehensive, up-to-date data to enable informed decision making across health care, and we believe Ribbon is poised to lead in this space,” said Yoo, in a statement.
Along with the new financing, Ribbon also unveiled a tool that provides cost and quality information for patients to understand their potential out-of-pocket cost estimates based on their deductible, plan design and provider prices.
“So much of the innovation in health care relies on accurate data. Our goal is to provide these companies the critical data infrastructure needed to improve quality of care, health outcomes, and control costs,” said Nate Fox, co-founder and chief technology officer at Ribbon Health, in a statement. “Our platform and seamless API make it easy for customers to trust us to deliver the most comprehensive, accurate data, allowing them to focus on what they do best on the front lines of health care.”
The company is already working with Oak Street Health and Well (Well Dot, Inc.), and will use the additional funding to expand its sales and marketing efforts and increase adoption.
“Provider data is a basic building block of every healthcare transaction,” said Yoo. “Whether it’s you or I trying to enroll… or referral claim processing… there are tens of billions of transactions, all of which require information about a provider.”