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Summary:

Want to find the cheapest health services in your area? Startup PokitDok has raised $4 million to build out a national marketplace for health and wellness.

PokitDok, a Menlo Park, Calif.-based startup trying to encourage a new era of consumerism in healthcare, has raised $4 million in a Series A round of funding.

Lisa Maki, the company’s co-founder and CEO, told me that the round, which follows $1.35 million raised last year, included New Atlantic Ventures and Rogers Venture Partners. With the funding, the 11-person company plans to grow its teams in Silicon Valley and Charleston, S.C., with engineering, business development and marketing hires, and it intends to build relationships with new distribution channel partners.

Launched in beta last year, the company provides a marketplace of health and wellness services spanning a range of specialties, from primary care and surgery to acupuncture and optometry.  Through the web site and mobile app, consumers can compare options and get price quotes directly from physicians, massage therapists, dentists and other specialists. For healthcare providers, it serves as a marketing platform for potentially reaching a new group of patients.

PokitDokPokitDok may be most beneficial to people with high-deductible plans or no insurance coverage, but those with insurance and lower deductibles could be helped as well. It’s a way to find the best prices on services your insurance may not cover or that you plan to pay for with a health savings account (HAS) or flexible spending account (FSA).

The upside for healthcare providers is access to a group of patients who are willing to pay upfront and avoid the mountains of paperwork and insurance claims processing that can lead to payment delays and other billing-related costs.

“We really see this as exactly the kind of tool patients need,” Maki said. “They’re trying to stretch their dollars as [much] as possible, in terms of the lowest overall cost, which includes premiums and their out-of-pocket costs. And it’s good for insurance companies and employers because they want to reduce their claims cost.”

How to bring more transparency to healthcare?

Transparency in healthcare is an incredibly hot topic right now – in March, Steven Brill wrote an epic story in Time on the murky business of healthcare and the government has started to release more data revealing hospital charges.  Companies like Castlight Health and ClearCostHealth use claims data to arm employees with the information they may need to make health-related decisions, and HealthInReach and Brighter (which focuses only on dentists) broker special prices for their customers.

Maki said PokitDok wants to bring a free-market approach to healthcare.  “Each provider gets their own storefront in the market to set their prices directly with the consumer,” she said. “Our belief is that in a free market, providers will discount in order to compete.”

When we last talked to Maki back in December (when the company launched its mobile app) the company’s plan was to market directly to consumers. But in the past six months, the company has shifted its model to reach consumers through employers, unions and health insurance. In addition to enabling the company to reach more consumers, the goal is that these distribution channels will help calm consumer concerns around how buying services through a marketplace could interfere with their health benefits. The company declined to share user numbers but said it had signed more than 1,000 practices nationwide.

As with any marketplace, growing its inventory of services and convincing a critical mass of doctors to build storefronts and compete on its site will be a challenge. But John Backus, founder and managing partner at New Atlantic Ventures, said specialists in orthodontia, cosmetic dentistry, dermatology and other areas already look outside the insurance system for much of their business.  And, he said,  as the Accountable Care Act changes the relationship between employers (and employees) and health insurance, more providers will do that.

“All of these doctors out there have been stuck in the insurance hamster cage but now they’re trying to figure out new ways to bring cash into the system,” he said.

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  1. Rashad Abdul-Salaam MBA, MA, CNIM Wednesday, June 26, 2013

    I’ve been following PokitDok for a bit, and it’s encouraging to see how much their product has grown since starting as sort of ‘Pinterest for Healthcare.’ It looks to be a great service to not only save consumers and health plans money, but also increase doctor office revenue and new patient visits.

    The internet is helping to inform and empower patients and healthcare consumers in all sorts of ways, which is why we created HappyHealth.me to help consumers store basic health information and use it to auto-fill those pesky doctor’s office forms. Check us out and make dealing with annoying doctor office paperwork a thing of the past.

  2. Brian T Edwards Wednesday, June 26, 2013

    The company’s SEC filing only shows $1.5M sold of a $4M offering. Any idea why there is this inconsistency? Did they close the rest of the round since filing last week? http://formds.com/issuers/pokitdok-inc

    1. Hi there – Yes, I believe the rest of the round closed this week.

  3. Michael Walsh Wednesday, June 26, 2013

    Congrats Lisa, Ted, and the entire PokitDok team! Was honored to have Lisa join me for an episode of HealthSparx back in the spring, love these guys innovative concept and couldn’t more excited for them reading this news.

    PS Gigaom, trying to comment with my Twitter account but your API wasnt letting me.

  4. I’ve heard through the grapevine that they exploited some early developers and are currently in legal trouble over it.

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