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http://blogs.wsj.com/corporate-intelligence/2014/06/10/data-from-castlight-health-shows-wide-differences-in-u-s-medical-costs-of-same-service/

Castlight Health lifted the veil—slightly—on its trove of data on the health-care prices paid by people who get health insurance from their employers. The finding: There are significant price differences for the same medical service in large U.S. cities.

The data, in an interactive map, show how prices paid by insured consumers vary for cholesterol tests, preventive care doctor visits, lower-back MRIs and CT scans of the head in select cities. Among the cheapest places for the cholesterol test was Raleigh, N.C., where it runs about $17 on average. The average cholesterol test in Austin, Texas, was $94.

In New York, the average price for a lower back MRI, a type of imaging test, was $1,062, Castlight's data show. The best price available was $416, and the highest was $4,527.

Castlight is a six-year-old company that provides online health-information tools and data to employers, which let them offer services to workers making decisions in choosing care. The tools, in part, tell workers the range of “in-network” prices people with the employer's insurance will pay for the a service—something that might matter a lot if a consumer has a high deductible that must be met before their coverage kicks in.

“There is so much fat in the health-care system,” said Castlight Health CEO Giovanni Colella. By exposing such pricing data to consumers, Colella says it can help them make more informed choices that could save money for employers and employees. “We can chip away at the cost of care,” he said.

The interactive map Castlight made public won't help individual consumers whose employers aren't paying for the firm's services: It doesn't say which providers are the cheapest in a given market, or what rates are available for members of particular health plans. A Castlight executive said those details were confidential.

What Castlight's in-network data do show is that even after insurers negotiate prices with health care providers, actual payments for the same services vary widely between doctors and hospitals around the country—or across the street.

Castlight–co-founded by Colella, White House chief technology officer Todd Park and venture capitalist Bryan Roberts–went public in March and has a market capitalization of around $1.5 billion. In the most recent quarter, Castlight lost $24.3 million on $8.4 million in sales, though revenue more than tripled from the year-ago quarter.

So far, Castlight has signed up more than 100 customers for its online software, including large health insurers such as WellPoint and companies and organizations such as Calpers, EMC Corp. and Cummins Inc.

Ken Goulet, CEO of WellPoint's Commercial and Specialty Division, said it started offering Castlight pricing data to its more than 1 million joint members more than a year ago. He said giving its members access to the data does save employers money. WellPoint is also using Castlight software to help present its customers with reference-based pricing, a term that describes a program in which employers pay only a set amount for a medical service. Providing such a service has produced “savings in the 10% range” for reference-based benefits, he said.

In April, information-technology vendor EMC Corp. made Castlight's application available to about 8,000 employees and their dependents as part of a pilot program. Before expanding the program to its full work force—more than 50,000 world-wide—the company wants to make sure it yields savings.

“We're looking to see a level of engagement, of our employees utilizing the Castlight application at the time they're making health care decisions,” said Kevin Close, an EMC senior vice president overseeing compensation and employee benefits.

Doug McKeever, chief of the health policy research division of Calpers, which manages pension and health benefits for California public employees, retirees and their families, said that this July in partnership with its health plan administrator Anthem Blue Cross, they will begin rolling out a new tool powered by Castlight Health data to about 225,000 of its 1.4 million members. The service will allow its members for the first time to see pricing data for a range of medical services and drugs, said McKeever.

Calpers is optimistic that exposing consumers to such data will help employer members and their dependents to make better and informed choices that will reduce health care costs, but they will not know the answers until the end of a two-year pilot. “In order to make substantive changes we need to make sometimes you need to take on a little risk,” said McKeever.