Driving Value in Healthcare through Transparency CHPRMS Discussion December 4, 2014

Agenda

Overview of Castlight Health

Brief platform demonstration

Distinctive Search Analysis

Role of Transparency for Providers

Centers of Excellence

Discussion

Introduction to Castlight

Great healthcare builds great business New technology will revolutionize enterprise healthcare to help deliver the best outcomes for American families

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5–10% It’s a top 3 business cost that rises

per year

30% of American healthcare spend is wasted

US enterprises spend more than

per year on healthcare

$620B

Castlight empowers businesses to cost-effectively manage their healthcare spend and empower employees and their families to make informed choices with a clear understanding of costs and likely outcomes

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Price of preventive primary care visit

Raleigh: Average: $165

Range: $113 - $225

Charlotte: Average: $199

Range: $60- $241

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Price of lipid panel

Raleigh: Average: $17

Range: $15 - $38

Charlotte: Average: $24

Range: $15- $139

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Price of lower back MRI

Raleigh: Average: $917

Range: $743 - $2,443

Charlotte: Average: $1,813

Range: $743- $3,017

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No correlation of cost with quality

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

$18,000

Below Average Above Average Delivery Quality

Cost vs. Quality: Pregnancy & Delivery (Chicago)

$17,000

$5,325

Sources: Pricing Data from Castlight Claims; Quality Data from Leapfrog Group

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Customers

130+ Fortune 500 customers

25+

of lives across all 50 states

Millions

Industries

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in engaging all their employees in a prescriptive way

Success

Success with Leading Companies

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“We want our employees to understand their benefits”

“We need to decrease healthcare costs”

“We want our employees to get the higher quality care”

“We are implementing advanced benefit designs and need help”

“We are focused on increasing employee engagement”

What we are hearing from our clients…  Challenges that employers are facing

Brief platform demo

Distinctive Search Analysis

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Distinctive Search  Optics into specific patterns and behaviors

Understanding what your population cares about and is searching for leads to:

1. More relevant healthcare benefit design

2. Higher employee engagement

Healthcare is essentially a talent issue. If you're trying to attract and retain employees, you need to understand what they care

about in order to provide competitive benefits.

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Search trends differ by age group

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Men and women communicate differently

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And search for different services

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We consume healthcare differently by region

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Healthcare consumerism doesn’t work doctor’s hours

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What are users in North Carolina searching for?

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5

Bunion Removal

Teeth

Nerve Conduction Test

Nutrition

Anemia

Pediatric Gastroenterologist Visit

COPD

Insomnia

Orthodontics

MinuteClinic

North Carolina search rate compared to overall US search rate

Top 10 searches that North Carolina users search for the most compared to the rest of the country

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Searchers spend less for common services

13% less on labs

On average, Castlight searchers spent…

14% less on advanced imaging

labs

MRIs

JAMA. 2014;312(16):1670-1676. doi:10.1001/jama.2014.13373

Role of transparency for providers

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Providers are adjusting to the “new normal” of healthcare with different strategies

Vertical and horizontal

consolidation

Launching a health plan

Developing new revenue streams

New reimbursement

& delivery

§  598 M&A’s in 2013 à$52.7 billion value1

§  34% have health plan

§  20% intend by 20182

§  2nd opinion, telemedicine, travel-benefit medicine

§  500 physician- or hospital-led ACOs

-  Promotion of own network

-  Manage risk for novel reimbursement models

-  Competitive edge by playing to strengths

-  Access to implementation grants

-  New volume for select services

-  Increase commercial revenue

-  Market share & negotiating power

-  Manage population health

1. Becker’s Hospital Review, 2013 2. Advisory Board report 2013; 3. Leavitt Partners Center for Accountable Care Intelligence, 2014;

All strategies can be strengthened or enabled with healthcare IT-based transparency

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Benefit and transparency platforms present opportunities for providers

Challenges with rising costs and domestic leakage

Transparency as “learning lab” for behavioral change

From…

No employer relationship and network exclusion

Direct engagement with employers to address needs

No ability to engage patients on price or quality

Ability to trial novel delivery models

…to

Provider employees

1

Self-insured

employers

2

Patients

3

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Providers need to balance benefits strategy with their business strategy

1

B A C

Domestic facility use Health plan strategy “Right pocket, left pocket”

§  Employee use of own facilities a strategic priority to increase volume and occupancy

§  Employee trust in “home institution” crucial for reputation

§  Reduced utilization saves costs BUT also reduces revenue

§  Payments on domestic use may be higher for their own employees than CMS patients

§  Incentive to maintain high quality AND low cost referrals

§  Must balance employee vs. health plan customer demand to ensure new customers

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Castlight has experience with large provider systems

Indiana University Health §  State’s largest hospital network with

25,000 employees Providence Health System §  Washington State’s largest health

system with 44,000 employees

Goals in new transparency market Employer goals: §  Reduce inappropriate use §  Address gaps in care Provider goals: §  Enhance online presence §  Validate pricing §  Drive domestic use by employees §  Improve high value service lines

Castlight solutions §  ID inappropriate use

like non-emergent ER

§  Alert gaps in care

§  Submitted rates

§  In-network search results only

§  Additional, shared quality data

§  Castlight Reviews

§  “Self-cleaning oven” to improve

1

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While employers express four major unmet needs with providers on population health…

2

“Providers refer patients to their golf buddies for surgery because that is who they know. They don’t review quality data or check if they are in-network.”

-Corporate Benefits Director, Fortune 50 media company

Unmet needs Employer quotes

Non-threatening patient-

experience

High quality, in-network referrals

Outcomes-aligned

incentives

More access to quality data

Source: Castlight Market Analysis (2014)

“People with high cholesterol are told to eat Cheerios and oatmeal and do it again when nothing has improved… …we must change how we incent providers.”

-Benefits Director, Fortune 500 grocery chain

“We set up a mobile mammogram – cost over $100,000. You believe or don’t believe it saves money. But women are now engaged with their care.” -Global Benefits Director, Fortune 500 food manufacturer

“I struggle with quality data. I know providers can share more data but it should be validated by a 3rd-party so providers are not grading themselves.”

-Health Director, Fortune 50 retail pharmacy chain

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…they are already starting to innovate programs and employ solutions on their own

2

Source: Castlight Market Analysis (2014)

Onsite clinics Telehealth / 2nd opinion services

Health guides Reference-based benefit

§  Not always done with health plans

§  Customized to cost or quality

§  Enabled by transparency tools

§  Regional benchmarks

§  Expanding to more services

§  Proven to reduce costs

Narrow networks / COEs

§  Individual coaches to steer patients to high value care

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Spot pricing benefits both patients and providers…

3

California Medical – Main Campus Price Depends on Time of Day

8am – 4pm $372

4pm – 8pm $295

8pm – 12am $250

MRI of lower back

Learn more

Different prices for services based on time or location

Patient Lower co-payment

Provider More off-peak volume

Employer Lengthen employee

deductible phase

Payer Minimal (if any)

Potential impact for stakeholders

Note: future product concept and not available today

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…while patient reported outcomes improve quality data and the shopping experience

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Outcomes

Surgical Outcomes

95% of patients recommend Dr. Workman for this surgery

Knee Replacement Hip Replacement ACL Repair

55% of patients reported that their health was improved after surgery

Patient Reported Outcomes after Hip Replacement Surgery (5 patients)

Overall Health

Ability to do daily activities

Pain

Fatigue

Greatly Improved

Much Worse

Note: future product concept and not yet available today

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§  Physician or caregiver access to Castlight §  Enables clinician to “shop” for patient §  Enables provider to manage value of all referrals in

risk sharing, ACO, or health-plan models

Third party access

§  Analytics on pricing, consumer behavior, or other §  Reports to develop strategy, and execution plan to

drive pricing, market campaign, or innovation §  Insight on relative position in marketplace

Provider reports

§  Analysis of out-of-network referral & utilization §  View of location, referring physician, and extent of

out-of-network use for enhanced benefit design §  ID lowest value areas & ways to improve

Referral pattern analysis

Product concepts: Providers have repeatedly requested solutions to address other needs

Note: all are future product concepts and not available today

Centers of Excellence

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Driving more value out of a COE program

Castlight’s COE approach: •  Raise awareness at the point of need

•  Help employees choose high-quality & cost-effective facilities

•  Explain the value of chosen facilities

Increase engagement, education, and utilization of

COE services

Direct

Castlight works with employers to drive more value

out of their programs

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Search. Search for a planned surgery in the

Castlight application.

Choose. Browse facilities designated as COEs at

the top of search results.

Act. Utilize educational content about COE

procedures and program benefits.

Direct employees to Centers of Excellence

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Two types of COE programs offered today

TPA network (e.g., Blues Distinction)

Vendor network (e.g., Health Design Plus)

Procedures: Dependent upon health plan §  Supported by vendor §  Option to customize

CL search: §  Standard sort, facility flags, spotlights & messaging

§  CL education content

§  Custom sort & facility flags, spotlights & messaging

§  CL education content

Other services: §  Can add 2nd opinion and/or Rewards

§  Standard CL analytics (e.g., non-COE specific)

§  Can add 2nd opinion and/or Rewards

§  Standard CL analytics §  Additional analytics

provided by vendor

Castlight will also explore COE programs directly offered by provider systems to meet the needs of our employer clients

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Castlight supports over 20 COE procedures •  Hip replacement surgery •  Knee replacement surgery •  Inpatient spinal fusion – anterior approach •  Inpatient spinal fusion – posterior approach •  Outpatient fusion •  Spinal decompression •  Heart valve replacement •  Coronary Artery Bypass Graft (CABG) •  Laparoscopic gastric bypass •  Laparoscopic gastric banding •  Transplant surgeries

•  Heart •  Lung •  Liver •  Kidney •  Pancreas •  Small bowel •  Intestinal-liver •  Simultaneous pancreas kidney (SPK) •  Simultaneous heart lung •  Bone marrow (allogeneic) •  Bone marrow (autologous)

Castlight- supported procedures:

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Open discussion

Any questions?

Appendix

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Castlight’s Clinical Team

9 Full time Clinicians

35 Part time specialists

Dena Bravata, MD, MS CMO & Head of Product

Internal Medicine Columbia Medical School, Stanford Hospital & Clinics

Cathie Markow, BSN, MBA Quality Expert

Hartwick College, Northeastern University

Howard Willson, MD, MBA Enterprise Sales Support

Emergency Medicine Univ. of Illinois Med., The Wharton School

Swedish Medical Center

A. Toles, MD, MPH Clinical Product Development

Internal Medicine George Washington Med., Stanford Hospital & Clinics

Ning Tang, MD Clinical Product Development

Internal Medicine Harvard Med School,

Mass. General Hospital, UCSF

David Lim, MD, PhD Provider Relations Infectious Disease

Columbia Med School, Johns Hopkins Hospital,

UCSF

Gabriella Kellerman, MD Educational Content

Mount Sinai School of Medicine, UCSD

Anita Cosgrove, RN, JD Provider Relations

23 and Me

J. Schneider, MD, MS Strategic Analytics Internal Medicine

Johns Hopkins Med School Stanford Hospital & Clinics

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✔ Measures are evidenced-based and align with national standards

✔ There is a regional or national benchmark for comparison

✔ Data are personalized and reported in a way that’s relevant to a user’s need e.g., condition or procedure

✔ Users have the ability to apply their preferences in how they prioritize the different types of information

✔ The source of the data and methodology for how to use the data is available and written in a consumer-friendly way

✔ There is information that helps a user understand their treatment options and how best to choose a provider for what they need

Castlight Quality Checklist

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Bridges to Excellence (Source: Bridges to Excellence Program)

•  Medical Home Recognition Program

•  Physician Office Systems Recognition Program

•  Asthma Care Recognition Program

•  Cardiac Care Recognition Program

•  Chronic Obstructive Pulmonary Disease (COPD) Care Recognition Program

•  Congestive Heart Failure Recognition Program

•  Coronary Artery Disease Care Recognition Program

•  Depression Care Recognition Program

•  Diabetes Care Recognition Program

•  Hypertension Care Recognition Program

•  Spine Care Recognition Program

Regional Collaboratives

•  Minnesota Community Measurement

•  The Health Collaborative of Greater Cincinnati

•  WI Collaborative for Healthcare Quality

•  MA Healthcare Quality Partners

•  Others – in several advanced discussions

Minimally Invasive Procedure (Source: Ethicon Endo Surgery)

Patient Experience Castlight users and multiple sources (e.g., Angie’s List)

List of Quality Sources - Physicians

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Surgical Safety Outcomes (Source: CMS Hospital Compare) Based on relatively rare events that should never happen including: •  Serious complications •  Hospital acquired conditions •  Healthcare associated conditions

Medical Condition (source: CMS Hospital Compare) Based on mortality and readmissions for: •  Heart attack; Heart failure; Pneumonia

Procedure volumes (Source: CMS Hospital Compare) •  Hip/knee replacement •  Coronary Artery Bypass •  Heart Valve Replacement •  Disc surgery •  Spinal fusion

Imaging Appropriate Utilization (Source: CMS Hospital Compare) •  CT Scan of the chest and abdomen •  MRI for low back pain •  Mammography follow-up

Maternity (Source: LeapFrog) •  Appropriate delivery – gestational age and method •  Care of high risk babies

Child Asthma Care (Source: The Joint Commission)

Patient Experience (Source: HCAHPS)

Complete List of Quality Sources - Hospitals