JAMA study: Castlight price transparency tool reduced healthcare costs for employers

Consumers and patients who used Castlight Health’s online pricing platform saw a significant decrease in certain aspects of their healthcare spending, including a 14 percent drop in costs for laboratory tests and 13 percent for imaging, according to a study by the Journal of the American Medical Association. The study focused on the use of […]

Consumers and patients who used Castlight Health’s online pricing platform saw a significant decrease in certain aspects of their healthcare spending, including a 14 percent drop in costs for laboratory tests and 13 percent for imaging, according to a study by the Journal of the American Medical Association.

The study focused on the use of Castlight’s Enterprise Healthcare Cloud and whether there was a reduction in costs to employers and employees for three common medical services: laboratory tests, advanced imaging services and clinician office visits.

Dr. Neeraj Sood, director of research at the  Schaeffer Center for Health Policy and Economics at the University of Southern California, led the study, with researchers from Castlight. They analyzed medical claims from 2010 through 2013 for more than 500,000 employees who had access to Castlight through 18 employers.

Lab tests and imaging saw the biggest savings, but primary care offices visits also dropped by 1 percent, according to the study. Additionally, the study showed that claim payments were lower for all services for employes who used Castlight versus those employees who did not.

The use of Castlight and other price transparency tools in healthcare are likely to increase, bringing increased savings with them.

“The savings will increase as more and more of the estimated 150 million Americans with employer-sponsored insurance gain access to information on prices and quality,” Dr. Sood said.

While Castlight is among the most visible companies focused on price transparency, having gone public earlier this year, UnitedHeatlh similarly linked usage of its pricing app, myHCE, to improved health outcomes and savings. And other companies are working within the space, inluding PokitDok and Vitals, suggesting that consumers will expect more transparency in the very near term.

The study noted that while the results show great promise, it did not capture data for employees who avoided “unnecessary or duplicate services based on use of the Castlight platform.”

Essentially, that means providers should take notice and review their pricing as the consumer-driven movement in healthcare accelerates.

“Importantly, we need to consider that the timeframe for this investigation is at the very advent of healthcare consumerism in America and during the initial adoption phase of Castlight’s platform,” Dr. Sood said. “It is quite possible that widespread adoption of such solutions by employers will force higher-priced providers to reduce their prices. The potential savings from such changes in provider behavior could be substantial. We hope to study this issue in the future.”

Castlight specifically focuses on large American employers to better manage benefits costs. More than 130 companies across 25 industries have adopted Castlight’s Enterprise Healthcare Cloud to offer their employees, according to the company.