Castlight: know what medical procedures cost beforehand

Like the Travelocity of healthcare, a San Francisco startup lets patients comparison shop.
Written by Janet Fang, Contributor

Most Americans don't know how much their medical procedures cost until after they receive the treatment. And that's pretty stressful considering how -- within a single zip code -- a colonoscopy could cost anywhere from $563 to $3,967.

Castlight Health, a San Francisco-based startup, aims to, well, cast light on the actual costs of medical care so patients can make more informed decisions. Technology Review reports.

Founded in 2008, the company offers computer-based tools for comparison shopping of healthcare. It's like Travelocity or Cars.com.

For example, EKGs can range from $27 to $143, while the price for a set of three spinal x-rays varies from as little as $38 to as high as $162.

And these days, even the 59.5 million Americans who get health benefits through large self-insured employers are increasingly expected to pay a percentage of the costs for their medical care.

  • So, the company sells its tool to employers, who pay a fee per covered member per month.
  • And in turn, the company offer employees access to their pricing databases so they can become more responsible users of their benefits. (Current customers include Safeway and Life Technologies.)

Data on medical costs are gathered mostly from statements of benefits that insurers provide to large employers after workers' claims have been paid. The company also provides information about quality and aggregates patient reviews from consumer websites.

As my former coblogger Dana Blankenhorn reported, Castlight Health (formerly Ventana) announced a $60 million capital infusion back in June 2010, which brought their total to $81 million. The team is headed by CEO Giovanni Colella, an entrepreneur whose last company, Relay Health, developed the idea of secure doctor-patient online communications. Cofounder Todd Park was called upon in 2009 to become chief innovation officer of the US Department of Health and Human Services.

The company's growth depends in part on cooperation from insurers -- like the prices they pay doctors and hospitals. However, this kind of consumer-empowering transparency doesn't benefit insurers or providers.

From Technology Review.

Image by RambergMediaImages via Flickr

This post was originally published on Smartplanet.com

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