This is the transcript of yesterday’s podcast with Castlight Health President John Driscoll.
John Driscoll: Great to be with you, David.
Williams: John, we’re going to talk about two topics today. One is the new Castlight Pharmacy product and another is Castlight’s emergence in my home market of Massachusetts with its first health plan deal with Harvard Pilgrim.
Let’s talk about pharmacy first. What is this Castlight pharmacy product? What is the need that you’re addressing?
Driscoll: As you know, David, we are absolutely aggressive about making sure that consumers have real time information that allows them to make the best choice. And we are focused on the lack of cost and quality information in marketplace. That’s an entirely new area for consumers and patients.
The one area where consumers are ready and able to make smart purchasing decisions is pharmacy. So we thought it was important to invest in a new capability to allow consumers to make decisions right after they’ve left the doctor’s office with their mobile device or when they’re searching on the Internet.
Consumers are very focused on how much drugs cost. And many patients are trading off drug costs against their weekly budget. So we thought it was important to invest in this capability and roll it out quickly because we knew that patients and consumers needed it now.
Williams: Pharmacy, as you said, is an area that consumers are really ready and able to engage in it. It seems like that’s partly because it’s a discrete product that they identify as opposed to going to a hospital and not knowing what set of services they’re receiving. But it also is maybe because it’s an area where there’s been some focus both from health plans and from PBMs. I know you spent some time in that industry. So can you distinguish what Castlight is doing from what’ already out there?
Driscoll: It’s clear in other categories where we are providing cost information for the first time to patients. But even in the pharmacy world, even with all the information and tools that health plans provide, they’re not focused on providing real time information at the point of decision in a way that impacts consumers immediately.
That’s probably a function of the fact that at Castlight we have a major focus on consumer behavior. Frankly, this is all we do. We provide the best tools with the best information. So much of how you get a consumer engaged and keep them engaged is providing simple consumer-oriented tools that are as sophisticated as a consumer needs.
It could be as simple as making sure they know the difference between branded and generics and home delivery versus a local pharmacy. Those basic choices –and providing them in a way that consumers can act on– extends the value of their benefit at the point where they are given a script.
Those tools really don’t exist in the marketplace in a way that really engage the consumer. There’s an art to putting together the consumer interface and the product and then making sure that we’ve got real time information that is directly relevant to where the people are in their benefit.
Williams: Unlike with medical benefits, there seems to be a fair amount of competition at the retail level on drug prices. So you have Wal-mart, which kicked things off with the $4 generic program and you see it extended into some pharmacies that offering low priced Lipitor or free antibiotics. Can that information be integrated into Castlight pharmacy or does that stand outside of the system?
Driscoll: What we are focused on is what’s covered under the insured benefit. Any part of the benefit that employers are paying for is integrated into the tool. And it’s integrated in a simple way to enable the consumer to make a decision at the point of shopping.
Williams: Is there a connection between what you offer on Castlight Pharmacy and the medical part of the benefit or are they standalone tools that are used separately?
Driscoll: They’re really standalone tools, but the great thing about pharmacy is the richness of the data and the fact that the consumers are ready to comparison shop. What’s hard is integrating in a simple way that enables the consumer with limited time to make a decision. And that’s really what this component of the product is. It sits on top of the traditional Castlight transparency product.
Williams: Does Castlight Pharmacy serve the Medicare Part D market or is this more for commercially insured patients?
Driscoll: Today, our pharmacy product is focused exclusively on the commercially insured, but we absolutely are going to be looking at Medicare and Medicaid, because there are opportunities for consumers to save in every market.
Williams: My understanding is that with Castlight, a consumer would need to have their employer be a customer of Castlight in order to access the tools. Is that the case with the pharmacy product as well or is it available to individual consumers?
Driscoll: Yes. The employer has to buy it. It’s through the employer purchasing that enables us to gain access to information that powers the tool and allows the employee to understand exactly how much is covered and exactly how much things cost.
Williams: Let me turn to another topic: health plans. I think about Castlight as somewhat of a competitor or threat to health plans. You may be revealing information to their customers that they perhaps should have revealed themselves. And yet it seems you’re starting to work with health plans, beginning with Harvard Pilgrim, which is often ranked as the number one health plan in the U.S.
Can you talk about what you’re thinking with health plans and then what specifically is going on with Harvard Pilgrim?
Driscoll: First of all, I would say that health reform is a team sport. We look at all of the health plans that work with us as partners. We’re all driving better outcomes and lower prices; the vast majority of people in the health insurance industry want to do that. We feel like we’re all playing for the same cause.
We will partner with health plans in small ways or large to deliver value for their covered lives. And we’re very excited to be able to adapt the cost estimator, our technology and our approach and to work with such a great partner as Harvard.
We look at the health plan marketplace as a real opportunity for Castlight. In some cases, we’ll be working with employers. In other cases, we’ll be working directly for the health plan and with employers in that marketplace.
For us, it’s just a variation on what we think is a huge need in the market place – for better information and an empowered consumer. As it happens, there’s a complete values match between what Harvard wants to achieve in the market place and what we’d like to achieve in the market place. They are very focused on transparency and may want to empower their approach to have Harvard Pilgrim.
Williams: John, it’s interesting to see that you signed your first health plan in Massachusetts, which is a market that has led the way with health reform. The Affordable Care Act was modeled on the Massachusetts plan. We’ve also been quite active in transparency. Did the legislation and the move in the policy sector toward transparency have anything to do with why Massachusetts is the first market you’re entering with health plans?
Driscoll: There is no question that the health plans in Massachusetts are particularly progressive. And obviously, Harvard Pilgrim is one of the best and the highest-ranked plans in the country. I think it is no surprise that we are finding great partners in the most progressive markets in the country. What’s interesting about the Massachusetts marketplace is its employers, its legislators, as well as health plan leadership that are driving a much more transparent system. And I think where you’ll see transparency not just on cost but also on quality and outcomes. It’s also a place where there’s a lot of very interesting and enlightened thinking around how to compensate for value and how to measure value. It’s really a laboratory for the rest of the country in health reform innovation.
Williams: Yes, it’s interesting. We also had one of the earlier all-payer claims databases in Massachusetts. My impression is there’s been a lot of information put into that database. The plans have submitted that information, but not all that much has come out of it. Does Castlight complement the all-payer claims database? Is it a substitute for it?
Driscoll: I think it complements the all-payer database. There’s still a fair amount of data gaps in every public database that’s been put up, but every time another database is developed and is improved, it’s another step towards having a more transparent system. That means a fairer system, a more accurate system and a system where not just software companies are selling services, but the patients and doctors and health plans and everyone else will gain from having a system where you can measure and then drive better results.
Ultimately, Castlight is more interested in getting access to information that historically folks haven’t had access to, making it actionable for employers and employees in a way that helps them drive better outcomes and lower costs. And as of today, we need to be able to get more information and provide it in a particularly elegant way and constantly improve it. The bigger Castlight gets, the more we know about the consumers and we can create tools that have meaningful impacts on cost and quality.
Williams: You talked about health reform being a team sport. Clearly Castlight and health plans and employers are on the team. Are providers part of that team as well and if so, how do they play?
Driscoll: They are. We’re only in the first few innings of transparency for employers and employees, but I’m not even sure it’s the first inning of transparency for providers. The majority of providers want to do the right thing but don’t have actionable information. They don’t have tools they can use. They don’t have tools that are meaningful, that fit their workflow and that can furnish providers with better information on cost and quality.
One of the concerns I have about some of the more progressive markets like Massachusetts is making sure that providers have access to that same information that Castlight currently provides to employers. Without that, to compensate doctors and hospitals on performance metrics seems unfair. We will only have a fair system that can function and create better performance if providers have access to the same kinds of information that Castlight is currently providing to employees.
Williams: Obviously, physicians are under a lot of pressure. They’re being asked to do things that they weren’t asked to do in the past and didn’t learn about in medical school. They’ve got a lot of requirements to adopt health information technology, a lot of compliance requirements, and an imperative to do more with less. And as I look at a lot of information systems that are out there, the providers really don’t have such great access to the kind of transparency data that you’re describing.
What’s the solution there? And how long does it take? And are there ways to see milestones along the way that may indicate longer term success?
Driscoll: Providers are only going to use tools that are meaningful. They want to save money for their covered lives and the patients they serve and they want to create better outcomes. But they don’t have information right now and certainly nothing’s been built into workflow. I think the next step is working, these companies life task is working with health plans to provide their network participants better information and to make certain that it is meaningful, simple and doesn’t slow down the hard work that doctors are doing.
The promise of companies like us or the promise of technology is to create this frictionless change where people can actually do more with less hassle. If you can integrate software tools into physician and hospital practices with the kind of information that the health plans have, doctors will make wiser choices. There’s a real opportunity right now but I’m concerned that without those kinds of tools, that putting doctors on new kinds of performance metrics like bundling, or bonusing them more on value is unfair unless they have the information to make wise choices.
Williams: I’m a member of a health plan in Massachusetts, a different one than the one you described, and my primary care physician is part of a contract that does pay based on value. I’m wondering what kind of information would it be useful for her to have that she probably doesn’t now that could help me and could help her?
Driscoll: I don’t know what information your doctor has access to, but certainly every doctor needs to have better feedback for the covered member that they’re taking care of, what’s covered and what’s not. For the doctors they refer to, what are their historic outcomes, how frequently have they done certain procedures, how satisfied are patient, and how do they fit into an episode of care? In a fee-for-service world there are informal referral networks. We want to create a system leveraging information that creates an informed referral.
Williams: I’ve been talking today with John Driscoll, President of Castlight Health. We’ve been talking about the new Castlight Pharmacy product and also talking about Castlight’s first health plan customer, Harvard Pilgrim, in Massachusetts.
John, thanks so much for your time.
Driscoll: Thank you.April 11, 2013