Cambridge-based CareDash, an online forum for consumer reviews of doctors, Thursday announced nearly $1 million in new funding and an additional $1 million line of credit from a local investment firm.
Tech investors Link Ventures provided the nearly $2 million of debt financing. Other investors in CareDash so far include former Thomson Financial CEO Jeff Parker, former McGraw-Hill chairman Ron Schlosser and Joe Langhan, the founder of the Food Network. The company generated $6.7 million in revenue in 2016 and previously raised $500,000 in seed capital, according to a CareDash press release.
“We see tremendous potential in the CareDash model of harnessing the power of consumer-generated content to solve a real need for authentic information in the healthcare space,” said David Blundin, Link Ventures managing partner, in a statement. Blundin is also chairman of the board for CareDash.
CareDash says more than half of its users access the website via mobile devices.
Since its launch in June 2016, the website has amassed more than 30,000 reviews and ratings. That’s far fewer than New York-based ZocDoc, which has dominated the online medical reviews market since its founding a decade ago.
Both sites rely on customers who count on each other to steer them away from unpleasant experiences at the doctor’s office. ZocDoc charges doctors a few hundred dollars a month to be listed on the website. CareDash founder and CEO Ted Chan said their advantage is that their listings are driven solely by user input.
“It’s one thing to eat a bad meal at a restaurant because a review was suppressed in exchange for compensation,” said Chan in a statement. “It’s quite another to manipulate the health care information available to patients.”
In an interview, Chan said his company’s goal is to “enhance the patient-provider dialogue.” That’s more important than ever, Chan said, given the uncertainty swirling around the Affordable Care Act. Most CareDash reviews are for primary care physicians. Chan said he expects that market to remain steady, despite Congress’ plans to repeal the ACA.
“Obamacare brought a lot of people into primary care practices,” said Chan. “The primary care physician relationship is a long-term investment.”
Nonetheless, Chan said, CareDash is one of many Boston-area companies closely watching the national health care debate.
“There’s certainly a level of concern for us,” said Chan, noting that about one quarter of CareDash’s clientele buys healthcare on one of the public exchanges set up under the ACA. “A lot of people have learned the value of coverage, so hopefully they’ll stay even if we lose the individual mandate.”
House Speaker Paul Ryan said Republicans in Congress are "acting with urgency" to repeal the Affordable Care Act and replace it with something that will make healthcare better and more affordable for most Americans. But President Donald Trump, who within hours of taking office last month directed federal agencies to begin rolling back the law better known as Obamacare, said this week that it could take until next year to find a suitable replacement.
These may be uncertain times for healthcare in the United States, but there’s no shortage of work for Boston-area companies with connections to the industry.
Chan, who founded CareDash after running the test prep website practicequiz.com, said they plan to grow the company this year, adding to the 20 full-time employees currently occupying a floor of 161 Kendall St. in Cambridge.