For decades, healthcare contract negotiations have been slow, unproductive, and non-transparent processes. During negotiations with payers, providers typically have very little visibility or leverage since they aren’t privy to (or have no way of obtaining) competitive and current market rates other than through expensive and prolonged consultant pricing studies. In addition to the lack of visibility, this has also strained the relationship between providers and payers. This inefficiency results in fewer treatment options for patients and a major productivity drain on the entire healthcare ecosystem. Even with recent legislation that enforces pricing transparency for the first time in U.S. healthcare, pricing data remains far from accessible, given the massive volume, difficulty in extraction, and the nuances of navigating the system.
At Madrona, we believe now is the perfect opportunity for the right company at the intersection of accurate data extraction and presentation, data-driven pricing models, embedded negotiation workflows, and an AI-powered flywheel to make a dent in our inefficient healthcare system. Today, we are thrilled to announce our Series A investment and partnership with Trek Health, an AI-powered contract management platform that transforms pricing data into mission-critical quantitative insights and drives trust and transparency between payers and providers — ultimately benefiting consumer healthcare.
Implications of the Price Transparency Act
We believe price transparency and trust lay the foundation for a well-functioning marketplace, and healthcare should not be an exception to that rule. Yet, for far too long, healthcare providers have been forced to negotiate their contracts (revenue) while being blindfolded. We are seeing a fundamental shift in the way providers want to negotiate contracts, particularly with recent changes in legislation and what is possible with AI advancements. Healthcare providers and payers are now mandated to publish their pricing data publicly, which has yielded 10M+ billing code and service line combinations. However, thousands of terabytes of data are uploaded monthly by payers, which makes it difficult to organize, let alone extract the right insights. For reference, UnitedHealthcare alone uploads 50K terabytes monthly! We expect the right player who can accurately aggregate, organize, and interpret the data into a digestible format for providers to see rapid demand and adoption.
The Ultimate Impact to Improving Patient Outcomes
We believe contract negotiations are a meaningful lever for driving higher value in patient care. Each percentage point uplift in new payer rates directly leads to a meaningful increase in value captured by the provider. And care is often shifted to higher-value treatments, which results in lower ongoing care spend, the right balance of inpatient and outpatient services, and a net benefit to patient care. Optimizing payer negotiations is a critical workflow for healthcare providers of all sizes and is deeply related to improving system-wide outcomes and consistent care.
At the end of the day, providers themselves still drive the art (and not science) of negotiations, but data is the main point of leverage. Trek is perfectly positioned to provide precise, accurate, and real-time data and leverage to unlock meaningful value in this critical process.
Enter Trek Health: Innovation Driven by Insights
Trek Health’s vision is to solve the negotiation problem, building a proprietary “interpretive layer” that extracts the correct data in the right context for each provider’s utilization and reimbursement rates on a real-time basis. With their AI- and data-driven models, Trek extracts a large amount of payer details, combined with specific customer-level utilization trends, and ultimately powers providers with the right insights to drive successful negotiations in a fraction of the time spent previously, without the benefit of accurate data. This capability boosts reimbursement potential for providers, but more importantly, allows providers to be reimbursed fairly, optimizes time for payers and providers, and delivers transparency and trust for healthcare systems as a whole.
We first met Dilpreet Sahota, CEO and Founder of Trek Health, a year ago and developed early conviction that his deep, nuanced expertise and entrepreneurial grit uniquely positions him to tackle and eventually win this market. Dilpreet understands that trust is healthcare’s most fragile and most valuable asset and has made it his mission and life’s work to restore the trust that is lacking today. Over the past several months, Trek Health has seen impressive growth with multi-year contracts with large hospital systems, efficient sales cycles, and glowing customer feedback, which points to the compelling market shift happening.
Today, Dilpreet is more invigorated than ever to double down on that growth and continue building toward his vision. We’re honored to partner with the Trek Health team, healthcare systems like Bon Secours Mercy Health (BSMH), and industry luminaries in improving outcomes for providers, patients, and the healthcare industry as a whole.
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