This is the transcript of my recent podcast interview with Castlight Health Chief Medical Officer Dena Bravata.
David E. Williams: This is David Williams, co-founder of MedPharma Partners and author of the Health Business Blog. I’m speaking today with Dr. Dena Bravata. She is Chief Medical Officer at Castlight Health. Dena, thanks for joining me today.
Dena Bravata: David, thank you so much. It’s a pleasure to be on your show.
Williams: Well, we’re speaking on the day that the Supreme Court came down with its long awaited ruling about the Affordable Care Act. We might as well speak about that. What aspects of the Affordable Care Act are the most significant for Castlight Health?
Bravata: Castlight Health is a health care transparency company. I think that in general, no matter what the decision was, it was not going to have as monumental an effect on our organization as perhaps onto others.
But the mandate itself I think is really important in so far as now we will have this enormous influx of patients who have not previously had health care.
Many of those will have high deductible plans or some other kind of benefit design where they will have a significant degree of cost sharing. Those employees and their families will require information about cost, quality, and convenience factors in order to make cost effective, appropriate decisions.
Williams: In the run up to the decision, had you seen your customers or other stakeholders holding back and waiting to see what was happening? Will there be a big difference in their approach between yesterday and tomorrow?
Bravata: We partner with three groups: large, self insured employer partners, health plan partners, and also our provider partners.
They have all been thinking and working hard to try to understand how the Affordable Care Act would affect their businesses. And I think that for a long period of time, many of them were working several parallel paths assuming that reform would continue or that there would be significant modifications.
But at some point in the past several months, it seems to me that in conversations with them, that many of the organizations could not continue down this parallel path, but instead had to make a bet that reform would go through or that the mandate or other aspects of it would or wouldn’t go through. And so I think what we saw is that in fact almost all of our partners have been preparing for this over time.
Williams: Let’s take those partners in order. On the large self-insured employer side –where I know you have many customers– what do they need to be doing for the Affordable Care Act in the near term to get ready for, but then also what are some of the longer term objectives that they have?
Bravata: Our employers are a highly heterogeneous group and so their needs differ. On one end of the spectrum there are employers who have been fairly frank about the fact that they would likely move to more of a defined contribution.
These are employers who are already offering high deductible plans, who perhaps are in industries where the benefits that they provide are perhaps not such an important component of the overall compensation package.
And so for now probably one of the main effects on them is really around the preventive care services that are part of the Affordable Care Act.
On the other end of the spectrum we have employer partners in highly competitive industries where the employees could just leave and work for some other competitor. It’s really important for them to have highly robust benefit design packages including rich health care benefits. For those organizations the challenge is how to maintain a really robust set of benefits, which includes offering tools such as Castlight. A lot of those folks would be affected by today’s decision. For example currently premiums can only be reduced by 20% for participation in wellness programs. But now that is increasing to 30%.
Those kinds of employers are considering theses sorts of incentive packages and how to maintain really robust benefits. There are also some employers that are in the middle of the spectrum. They might take a hybrid approach. They might say to their employees, if you would like to participate in our benefits you must do a number of things. Those typically include participation in health risk assessments,wellness programs and seeing providers who follow guidelines, and going to centers of excellence for surgical procedures and going to low cost providers for commodity services. And if you do that then you can continue to get benefits through the company as you have in the past.
For those that don’t want to participate the company may say, ‘All right. And if you don’t we’ll give you a defined contribution and you can go on to the exchanges and get your own health insurance in that way’.
Williams: Now talk about health plans. Perhaps you could start off by describing what your relationship is with health plans. I understand the term ‘partner’ when it’s applied to the large self insured employers, but I’m not sure if I understand the partnering role between Castlight and health plans.
Bravata: Our relationships with the health plans are heterogeneous just as they are with our different employers. In large part however they are characterized by support of our employer customers. I am by no means an expert in the decision making the health plans have been doing in terms of preparing for today’s decision, so I don’t feel qualified to comment on that.
Williams: And what about on the provider side? You’ve been providing transparency largely about providers, and I’m wondering how the relationship is evolving. Do they like working with you?
Bravata: Our interactions with providers ranges across the entire spectrum. We have some providers who see themselves as low cost, high quality providers. They have been highly enthusiastic about supporting transparency efforts in general and have gone so far as to share their pricing and quality information with us.
They recognize that by doing so our users see robust information about them and may attain greater utilization of their services. We have other types of relationships with provider organizations. I would say notable among them is the Cleveland Clinic, which has been a supporter and an investor in Castlight.
The Cleveland Clinic is remarkable and should be lauded for the fact that despite not always being the lowest cost provider (yet one of high quality), that they have been willing to step into the transparency fray and to be a big supporter of ours.
We have other kinds of provider partnerships that we’re developing now that really have to do with recognizing that providers –especially those in Accountable Care Organizations or other similar models of delivering care– require understanding of the practice patterns within their provider organization. For example, you might want to select a doctor for example who cares for a diabetic patient who refers to lots of specialists and gives lots of tests, but is fairly cheap on unit cost basis.
That could be in contrast to another provider for diabetic patients who tends to see patients back all the time, but doesn’t do nearly as many referrals. When patients can see the differences in those practice patterns, they’re able to make a selection within the ACO itself.
When tools are provided to the ACO physicians, they can then also make more cost effective downstream referrals for services that are outside of the ACO. In doing so they can control their total cost of care. I think that different provider organizations are affected by today’s decision in different ways. But in general the pressure for them to participate in alternative payment models will be accelerated by today’s decision.
Williams: Dena, I’ll ask you a final question that is not directly related to the Affordable Care Act. Can you give us a preview of what we might expect in the evolution of Castlight’s services and product offerings over time?
Bravata: As you know Castlight began as a cost, quality and convenience transparency tool. Our job is to provide unbiased information in those three areas in order to inform patient decision making.
When we first started that was really what we did. We now show that kind of information for a robust set of outpatient and even elective inpatient procedures.
Over time however, in partnership with many of our innovative employers, we have been able to support benefit designs that begin to direct patients, not just to any provider that’s in their network for a given service, but to selective providers that are really of high value.
For example some of our employers have embraced reference based pricing and we’ve done a remarkable job in terms of helping to make sense for consumers of what could be a confusing benefit design. Similarly well over half of our employers have some kind of center of excellence program.
And some of them have benefit designs whereby the consumer would be on the hook for considerably higher out of pocket cost if they went to a non center of excellence.
We’re able to support our users’ decision making around selecting a center of excellence or a non center of excellence on the basis not only of exactly what their out of pocket cost would be, but also what the relevant quality metrics would be and other educational information that would inform that kind of decision making.
So one part of the answer is that over the course of the next year, we have plans to support additional benefit designs that are increasingly moving away from just a long list of cost and quality metrics for providers to increasingly helping direct patients to employer based onsite clinics, retail clinics, centers of excellence, and providers that are below our reference price.
A second major area of innovation for us has been around our technology platforms. In addition to our online tools, we also have a mobile platform and provide full telephonic support so that users who are not technologically savvy should be able to have a similar kind of shopping experience by calling our Castlight guides.
Over the course of the next year we’ll continue to expand and to develop our suite of tools in that way.
Williams: I’ve been speaking today with Dr. Dena Bravata. She’s Chief Medical Officer at Castlight Health. We’ve been talking about the Supreme Court’s decision on the Affordable Care Act, its implications for Castlight and Castlight’s partners. And we’ve spoken about what Castlight has in store for us over the next year or two. Dena, thanks so much for joining me today.
Bravata: Thank you David, it’s been my pleasure.July 10, 2012