Making the prices of healthcare services available is only the first step in engaging consumers in their healthcare, says Doug Ghertner, CEO of Change Healthcare. Even if pricing information is out there, most consumers won’t be motivated to seek it out. So there’s a second step that’s equally as crucial — delivering it to them in a personalized, meaningful way.
Change Healthcare has found demand for that among health insurers and self-insured employers. To continue growing, the cost transparency and consumer engagement company has just closed its biggest funding round yet. HLM Venture Partners led the $15 million Series D, which was joined by a handful of other investors including Sandbox Industries and Gary and Mary West Health Investment Fund.
According to Ghertner, that money will help the 6-year-old company build out its sales team and expand its presence in the health plan and large self-insured employer market. “We’ve also seen our clients express interest in how we can help them create additional support tools to engage members and employees,” he added. “A good portion will go toward accelerating the pace at which we bring new products to market.”
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Currently, Change Healthcare markets two platforms. The Transparency Messenger compiles health plan and claims data to devise algorithms that determine the cost of a service. Then it uses health plan holders’ or employees’ demographic information and personal preferences for care to look for savings on their behalf.
“That piece of our tool is very similar to what the Castlights or Aetnas or Uniteds have,” Ghertner said. “(But) at the end of the day, very few people take the initiative to seek out cost. One of the ways we’ve differentiated ourselves is by taking the information to the consumer in a very personalized way.”
By that he means that the company’s engine is constantly sifting through claims information. Individuals set their preferences to get customized alerts when the engine thinks it’s found a way for them to save on a procedure or service. “We’ve found that when we send those alerts, nearly 60 percent of the people who get them open them up and do something with them,” Ghertner said.
The second product, Healthcare University, leverages videos, quizzes and interactive games to teach users the basics of healthcare and how to understand their benefits and become a savvy healthcare shopper. That’s especially interesting in light of the recent study by a healthcare economist at Carnegie Mellon University which found that a majority of subjects didn’t understand four basic components of health plans.
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With this product, Change Healthcare has found some new opportunities around the looming health insurance exchanges. It’s recently partnered with Capital BlueCross in Pennsylvania to implement a series of educational videos and games on exchanges to help the plan’s members learn about exchanges.
The Series D brings the Brentwood, Tennessee company’s total amount raised to about $32 million.
