While many employers are asking employees to shoulder more of their own health costs, the push for price transparency is stronger than ever among employers, insurers and the patients themselves. But despite the fundamental nature of sharing price information in other industries, putting medical patients in the position to comparison shop could turn hospitals' business models upside down, notes the New York Times in an article about a new company with plans to do just that.
That's why Castlight Health, currently building a search engine for healthcare prices, is different from some other price-transparency pioneers (including Thomson Reuters and a Tennessee start-up called Change:healthcare); it boasts financial backing from the provider side, via none other than the Cleveland Clinic.
To date, the project has raised $60 million from Cleveland and other investors, including Venrock, Maverick Capital and Oak Investment Partners, in addition to $21 million the startup raised previously.
Patients whose employers subscribe to Castlight (the Safeway grocery store chain has signed on as its first customer) can search for doctors that offer a procedure or service nearby and find out how much they will charge, depending on their insurance coverage. Although Castlight currently sells the service to employers and charges by employee per month, it plans to eventually introduce a website for anyone to use.
Despite the curveball these services may throw to providers, many analysts argue that the lack of price transparency held a large part in the runaway costs we see today--because patients too often perceived their care as free. Thus, changing this dynamic late rather than never may help control costs to the benefit of the healthcare community at large.
Ideally, transparency in healthcare pricing could lead to higher-quality, lower-cost healthcare, and more patient involvement in buying healthcare, Delos Cosgrove, chief executive of the Cleveland Clinic, told the newspaper. "Because they begin to realize that a trip to the doctor is not free, they might stay home and take the aspirin instead of getting the neurologic work-up."
To learn more:
- read the article in the New York Times