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Casting Light On The Actual Costs Of Medical Care

I really like this idea, but …  well, see after the quote.

It’s easy to compare prices on cameras, vacations, and homes. But in the United States, patients fly blind when paying for health care. People typically don’t find out how much any given medical procedure costs until well after they receive treatment, be it a blood draw or major surgery.

This lack of transparency has contributed to huge disparities in the cost of procedures. According to Castlight Health, a startup based in San Francisco, a colonoscopy costs anywhere from $563 to $3,967 within a single zip code. 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.

When someone else is picking up the tab, mystery pricing is not much of a problem. But 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.

Castlight aims to do as its name suggests: cast light on the actual costs of medical care, so that people can make informed decisions…

via Exposing the Cost of Health Care – Technology Review.

Finally! Some price transparency! Huzzah! I WANT people to recognize that spending money when there’s no clue to the charge (not cost, charge) is directly responsible for a ton of the runaway cost in medicine.

This is better than nothing. It is, and while I don’t begrudge people making money on their great idea, is this the best model?

The company sells its tool to self-insured employers, who pay a fee per covered member per month, and in turn offer employees access so they can become more responsible users of their benefits. It has raised $81 million in venture funding to date. Current customers include Safeway and Life Technologies, a leading maker of genomics tools.

“Castlight is further along than anybody else in helping big employers show their employees that the individual decisions they make on health care actually do have a cost that affects benefits and wages,” says Matthew Holt, co-chairman of Health 2.0, a health-care consultancy firm.

Okay, better than nothing, and a start in the right direction. Good for them.

*This blog post was originally published at GruntDoc*


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One Response to “Casting Light On The Actual Costs Of Medical Care”

  1. Ben says:

    I think this is a necessary service, though I agree that the funding mechanism is a little suspect. As it is, this service is going to be used by a small percent of the small number that are enrolled. I’m also a little dismayed by the amount of venture capital here. $81,000,000 seems like a lot considering that this service is extremely similar to similar services offered in other markets (lots of sites aggregate prices from vendors in a particular field just to collect ad revenue). I know that the data is a little more opaque than normal and therefore difficult to collect, but this model probably serves to keep it that way. Medical services will probably not adjust their cost much because so few people will have access to this data.

    I think a more open-source platform, where providers are encouraged to list their prices and submit for review would be superior. It would provide the data to more people and be far cheaper to collect the data. It would still require some up-front money to seed the site (to make it big enough that people would bother looking at it and vendors would bother contributing) but no where near the $81M that these guys have.

    Nevertheless, I think that this is a good start, and we may yet see a lower-cost more open competitor in the years to come.

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