A health IT company providing a search tool for company employees to identify suitable doctors for procedures and check ups based on experience, cost and outcomes has raised $9.5 million in a Series A round to support sales, marketing and data scientist hires. MD Insider is part of a group of companies shining a light on healthcare costs by making it easier for employees to understand how much procedures cost and which physicians in their region have the most experience for procedures they need.
A group of super angel investors participated in the Series A led by Jason Ader, an entrepreneur and investor who has joined the business as executive chairman. Other investors included Bill Ackman, a hedge fund investor, Michael Fertik, who founded Reputation.com, and Tim Ferriss, who invested in Facebook, Uber, and Evernote, among other companies.
Several companies have been inspired by the likes of Castlight Health. The founders of the seven year-old company championed the need for greater transparency in healthcare to help people make informed decisions about their care. The company went public last year. In addition to Castlight, PokitDok has carved a place for itself in the healthcare transparency realm and has provided its services to other startups such HealthiestYou. Other companies, such as Vitals, have added price transparency tools through acquisition.
In a phone interview with MedCity News, MD Insider CEO and co-founder David Norris said it would use the funding to hire “hundreds” of sales, marketing and data scientist staff in the next 24 months. Norris doesn’t come from a healthcare background — his experience includes digital media, online advertising and investing. But his vice president of data strategy David Brosso has started companies that relied on cultivating relationships with data suppliers in healthcare such as Aileron Solutions providing data and services to life science companies.
Norris doesn’t really care for the term price transparency and refers to the service it provides as a physician performance transparency tool. He said that by collecting a massive amount of data from sources such as insurers, physician practices, billing clearinghouses, practice management software, and CMS, it can give more context than rivals such as Castlight Health. Norris notes that it costs a lot to obtain this data and doesn’t think competitors are willing to amass as much data as it claims to have. It also puts together the data itself, said Norris. It doesn’t rely on insurers or employers to analyze the data.
Among the companies it counts as customers are DirectTV Qualcomm, Starboard Hotels, Expedia and Oracle. In addition to company employees, MD Insider also extended its platform to consumers through search engines, insurance health plan portals, and consumer doctor review sites.
As a hypothetical, he contends that someone who injures their ACL in a ski accident can use its search engine to not only identify physicians by specialty, such as orthopedic medicine, but the types of of orthopedic procedures in which they are most experienced, such as knee surgery.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
Norris added that costs can be deceptive. A physician who charges more may have better outcomes for different reasons. It’s not a simple matter of price because there can be a long-term downsides for opting for the wrong physician. In an assessment that doesn’t flatter typical consumers, Norris and Ader offered up examples in which people used things like office decor or a strong rating on Yelp to pick their physicians rather than making an informed decision. Word of mouth tends to be an important decisionmaker too, something its search engine can quantify.
One of the reasons so many entrepreneurs are moving into healthcare is the opportunity they see. By investing heavily in its physician search tool, Norris hopes to change that, at least in the health IT subsector it occupies.
“I want to make the barriers to entry even higher than they are today,” he said “The core components of our business are very difficult to replicate. We have identified data sources and the process has been extremely time-consuming and costly. It’s very difficult to process so much data.”
