Castlight Health tool saves money for patients, JAMA study shows

Using Castlight Health's price discovery tool results in strong savings for customers shopping for the best deal in imaging—but not in clinician office visits or lab results, a study released in JAMA shows.

The results provide an “early glimpse of the potential ability of greater price transparency to influence the choices patients make,” Princeton professor Uwe Reinhardt wrote in an accompanying editorial.

The study, co-authored by two Castlight data analysts and Neeraj Sood, the director of research at USC's Schaeffer Center for Health Policy and Economics who also is a paid adviser to Castlight, examined 253,757 households insured by 18 large employers between 2010 and 2013 and using Castlight Health's price transparency platform.

The claims data from those households were split into two groups: Patients who searched on Castlight's tool 14 days before a visit for imaging, clinician office visits, and lab results; and patients who didn't. Searcher and non-searcher groups were roughly similar, with searcher groups having a slightly lower percentage of men and a slightly different age profile. (Fewer 25- to 49-year-olds and more 50- to 64-year-olds.) But the groups had very similar disease and medical condition profiles.

Households using Castlight Health to shop for imaging services showed strong savings in advanced imaging. Searchers that had strong cost sharing saved $139 a visit versus non-searchers, and those that had no cost sharing nevertheless also shared $155 a visit. Savings were less strong for patients using labs ($4.05 for searchers with cost-sharing versus non-searchers, and $3.58 for searchers with no-cost sharing) and clinician office visits ($.84 and $3, respectively).

The strong results in imaging heartened Sood, who speculated that the savings to the healthcare system could be quite large. Since imaging is roughly a $200 billion market, he said, “if you reduce prices in imaging by roughly 10%, that's roughly a saving of $20 billion if everyone started to price shop for image savings.”

Many experts have touted the possibility of cost savings arising from price transparency. A brief from the West Health Policy Center in May 2014 (PDF) estimated that roughly 70% of consumers had access to price transparency tools in 2013, and that requiring all private plans to provide enrollees with a price transparency tool might lead to $18 billion in savings over the next 10 years.

Reinhardt cautioned that it was unclear why consumers saved so much more in imaging as compared to office visits and lab results. He felt the potential for savings might be even greater in the future. As time goes on, he wrote, consumers will become more familiar with Castlight's search tool, and use it for a greater variety of services.

One slightly surprising point in the study was the similarity in savings between searchers who had cost-sharing and searchers who didn't have any cost-sharing. Sood speculated that the similarities might be accounted for by inertia—patients who have selected a low-cost provider might stick with one, regardless of whether they had to spend additional money to visit. The second reason, he guessed, was sticker shock. Patients who see a high price for a given medical service might be leery of choosing it, regardless of whether additional money would be spent.

Follow Darius Tahir on Twitter: @dariustahir