Procured Health, a Chicago-based data technology startup that aims to reduce wasteful spending by healthcare providers, announced this morning that it has secured a $10 million Series B round of funding.
Founded in 2012, Procured Health works with a number of the nation’s most prestigious healthcare systems, including Stanford Health Care, Vanderbilt University Medical Center and Johns Hopkins.
“We have seen significant growth in the company and saw an opportunity to do even more work in the area of clinical spending management,” said CEO Hani Elias. “We decided to go raise additional capital to continue to build out our product offering.”
The company added 10 employees in Chicago last month, bringing its local headcount up to 60. How many additional employees will be added in the wake of this round has yet to be determined.
Procured Health’s platform sifts through healthcare provider data to find patterns of wasteful spending and treatments that do not align with medical best practices. Examples of such patterns range from purchases of expensive medical devices with questionable clinical value to the overuse of antibiotic treatments where cheaper, non-antibiotic options would work just as well.
“We want to really arm physicians so that they have better information and better data to practice more cost-effective care,” said Elias.
Beyond searching for savings, Procured’s team of physicians, researchers and nurses also integrates existing research on the relative effectiveness of various kinds of treatments into the platform. This helps physicians choose courses of treatment that are most likely to lead to favorable health outcomes for patients.
The round was led by Heritage Group, a venture capital firm backed by some of the country’s largest healthcare companies. HCA subsidiary Health Insight Capital also participated.
“Our diligence process overwhelmingly validated that Procured’s customers reap extraordinary benefit from the company’s differentiated solutions,” said Heritage Group Principal Jesse Bland in a statement. “Health systems have struggled to manage clinical spend more effectively for years, and the significance of these initiatives is only growing as healthcare transitions to a value-based paradigm. We believe Procured has developed a unique suite of technology solutions that address this critical pain point for providers, and we’re excited to see what the company develops next.”
Procured raised a $4 million Series A in March of 2014 in an investment led by FCA Venture Partners. Elias said the company was in dialogue with a number of investors while preparing for its Series B but ultimately settled on Heritage because of its expertise in the healthcare arena.
“That made them a very natural partner to help us with our strategy moving forward,” he said.
Image via Procured Health.