Procured Health has obtained $4 million for its Series A funding round, VentureBeat reported.
FCA Venture Partners, a healthcare-focused company, gave the investment. The startup provides subscription- based software that would help healthcare providers make informed buying decisions and avoid overpaying. It is currently collaborating with Hoag Hospital, Asante Health, St. Charles Health and two dozen more hospital systems, the report said.
The pricing of medical devices in the US is far from transparent. Doctors don't really have a clue as to how much a blood pressure monitors or spinal screws really cost. Procured Health's Chief Executive Officer Hani Elias told VentureBeat that the gross margins of medical device makers are so high because of the "really high price points" that are not regularly monitored. Moreover, it has also been a regular practice for these manufacturers to require purchasing departments of hospitals to stay mum on prices, the report said.
Because of the confidentiality restriction, manufacturers can give different quotes to different hospitals for one product. In fact, this was revealed in a 2012 report by the Government Accountability Office which said that as far as knee implants went, hospitals paid anywhere from $3,408 to $10,830 while price ranges for implantable cardioverter-defribrillators went from $19,578 to $35,916, the report said.
Procured Health Chief Operating Officer Eric Meizlish told VentureBeat in an interview, "Hospitals have not been sophisticated evaluators of medical devices or new technology."
With the solution offered by Procured Health, however, physicians have the chance to provide feedback and recommendations pertaining medical devices. Hospital administrators can then utilize the software to look up various products with different price ranges and quality before deciding on buying an item. The service comes at an opportune time as the Affordable Care Act has led hospitals to keep a watchful eye on their costs, the report said.
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