Driving Value in Healthcare through Transparency CHPRMS Discussion - PowerPoint PPT Presentation

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

Overview of Castlight Health Brief platform demonstration Distinctive Search Analysis Agenda 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

Castlight empowers US enterprises spend more than businesses to cost- $620B effectively manage their healthcare spend and empower employees and their families to make per year on healthcare informed choices with a clear understanding of costs and likely outcomes It’s a top 3 business cost that rises 5–10% per year 30% of American healthcare spend is wasted Confidential 5

Price of preventive primary care visit Raleigh: Average: $165 Range: $113 - $225 Charlotte: Average: $199 Range: $60- $241 Confidential 6

Price of lipid panel Raleigh: Average: $17 Range: $15 - $38 Charlotte: Average: $24 Range: $15- $139 Confidential 7

Price of lower back MRI Raleigh: Average: $917 Range: $743 - $2,443 Charlotte: Average: $1,813 Range: $743- $3,017 Confidential 8

No correlation of cost with quality Cost vs. Quality: Pregnancy & Delivery (Chicago) $18,000 $17,000 $16,000 $14,000 $12,000 $10,000 $8,000 $6,000 $5,325 $4,000 Below Average Delivery Quality Above Average Sources: Pricing Data from Castlight Claims; Quality Data from Leapfrog Group Confidential 9

Success with Leading Companies 130+ 25+ 25 Customers Fortune 500 Industries customers Millions Success of lives across all 50 states in engaging all their employees in a prescriptive way Confidential 10

What we are hearing from our clients… Challenges that employers are facing “We want our employees “We want our employees to understand their to get the higher quality benefits” care” “We are focused on increasing employee engagement” “We are implementing “We need to decrease advanced benefit designs healthcare costs” and need help” Confidential 11

Brief platform demo

Distinctive Search Analysis

Distinctive Search Optics into specific patterns and behaviors Understanding what 1. More relevant healthcare benefit design your population cares about and is searching 2. Higher employee engagement for leads to: 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. Confidential 14

Search trends differ by age group Confidential 15

Men and women communicate differently Confidential 16

And search for different services Confidential 17

We consume healthcare differently by region Confidential 18

Healthcare consumerism doesn’t work doctor’s hours Confidential 19

What are users in North Carolina searching for? Top 10 searches that North Carolina users search for the most compared to the rest of the country MinuteClinic Orthodontics Insomnia COPD Pediatric Gastroenterologist Visit Anemia Nutrition Nerve Conduction Test Teeth Bunion Removal 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 North Carolina search rate compared to overall US search rate Confidential 20

Searchers spend less for common services On average, Castlight searchers spent… labs 13% less on labs MRIs 14% less on advanced imaging JAMA. 2014;312(16):1670-1676. doi:10.1001/jama.2014.13373 Confidential 21

Role of transparency for providers

Providers are adjusting to the “new normal” of healthcare with different strategies Vertical and New Launching a Developing new horizontal reimbursement health plan revenue streams consolidation & delivery § 598 M&A’s in § 34% have § 500 physician- § 2 nd opinion, 2013 à $52.7 health plan or hospital-led telemedicine, billion value 1 ACOs travel-benefit § 20% intend medicine by 2018 2 - Market share & - Promotion of - Competitive - New volume for negotiating own network edge by playing select services power to strengths - Manage risk for - Increase - Manage novel - Access to commercial population reimbursement implementation revenue health models grants All strategies can be strengthened or enabled with healthcare IT-based transparency 1. Becker’s Hospital Review, 2013 2. Advisory Board report 2013; 3. Leavitt Partners Center for Accountable Care Confidential 23 Intelligence, 2014;

Benefit and transparency platforms present opportunities for providers From… …to 1 Challenges with rising Transparency as Provider costs and domestic “learning lab” for employees leakage behavioral change 2 Self- Direct engagement with No employer relationship insured employers to address and network exclusion employers needs 3 No ability to engage Ability to trial novel patients on price or Patients delivery models quality Confidential 24

Providers need to balance benefits strategy 1 with their business strategy A B C Domestic facility use “Right pocket, left Health plan strategy pocket” § Employee use of § Reduced utilization § Incentive to own facilities a saves costs BUT maintain high strategic priority to also reduces quality AND low increase volume revenue cost referrals and occupancy § Payments on § Must balance § Employee trust in domestic use may employee vs. health “home institution” be higher for their plan customer crucial for own employees demand to ensure reputation than CMS patients new customers Confidential 25

Castlight has experience with large provider 1 systems Indiana University Health Castlight solutions State’s largest hospital network with § ID inappropriate use § 25,000 employees like non-emergent ER Providence Health System Alert gaps in care § Washington State’s largest health § system with 44,000 employees Submitted rates § In-network search § Goals in new transparency market results only Employer goals: Additional, shared § Reduce inappropriate use § quality data Address gaps in care § Provider goals: Castlight Reviews § Enhance online presence § Validate pricing “Self-cleaning § § Drive domestic use by employees oven” to improve § Improve high value service lines § Confidential 26

While employers express four major unmet 2 needs with providers on population health… Unmet needs Employer quotes “Providers refer patients to their golf buddies for surgery High quality, in- because that is who they know. They don’t review quality data or check if they are in-network.” network referrals -Corporate Benefits Director, Fortune 50 media company “People with high cholesterol are told to eat Cheerios and Outcomes- oatmeal and do it again when nothing has improved… … aligned we must change how we incent providers.” incentives -Benefits Director, Fortune 500 grocery chain “We set up a mobile mammogram – cost over $100,000. Non-threatening You believe or don’t believe it saves money. But women patient- are now engaged with their care.” experience -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 More access to providers are not grading themselves.” quality data -Health Director, Fortune 50 retail pharmacy chain Source: Castlight Market Analysis (2014) Confidential 27

…they are already starting to innovate 2 programs and employ solutions on their own Narrow networks / Reference-based Health guides COEs benefit Not always done Regional Individual coaches § § § with health plans benchmarks to steer patients Customized to Expanding to to high value care § § cost or quality more services Enabled by Proven to reduce § § transparency tools costs Telehealth / 2 nd Onsite clinics opinion services Source: Castlight Market Analysis (2014) Confidential 28

Spot pricing benefits both patients and 3 providers… Different prices for services Potential impact for based on time or location stakeholders Patient Lower co-payment Provider More off-peak volume California Medical – Main Campus Price Depends on Time of Day MRI of lower back Lengthen employee 8am – 4pm $372 Employer deductible phase 4pm – 8pm $295 8pm – 12am $250 Learn more Payer Minimal (if any) Note: future product concept and not available today Confidential 29

…while patient reported outcomes improve 3 quality data and the shopping experience Outcomes Surgical Outcomes Knee Replacement Hip Replacement ACL Repair Patient Reported Outcomes after Hip Replacement Surgery (5 patients) 55% of patients reported that their health was improved after surgery Much Greatly Worse Improved Overall Health Ability to do daily activities Pain Fatigue 95% of patients recommend Dr. Workman for this surgery Note: future product concept and not yet available today Confidential 30