April Dembosky, San Francisco correspondent for the Financial Times, has written an informative essay on the tools Silicon Valley entrepreneurs are developing for the US healthcare sector. Most seek to reduce costs and improve efficiency with software applied directly to the supply side of the industry, but at least one company focuses instead on consumers.
[A] start-up called Castlight Health … makes price comparison software for common medical procedures such as mammograms and colonoscopies. It functions like a travel website, aggregating data from employers’ cache of past insurance claims, and packages it into a searchable price database for consumers.
The goal is to bring transparency to a field that has historically been opaque, permitting vast discrepancies in the cost for common procedures. With 30m-40m joining insurance rolls in the next few years as a result of healthcare reform, many are expected to be funnelled into “high-deductible health plans” and will pay much closer attention than before to the costs of services their doctors prescribe.
“Healthcare has become a very inefficient market because there’s no correlation between price and quality,” says Peter Isaacson, Castlight Health’s chief marketing officer. “You can have the highest prices for the lowest quality.”
April Dembosky, “Healthcare: Cyber wards“, Financial Times, 13 September 2012.