Case
Teaching Notes
Supplementary Resources
Abstract
This case study focuses on Castlight Health, a company that offered web-based health comparison tools for consumers. The company provided its tool through a business-to-business based subscription model where the employees of Castlight’s clients could research health care costs before receiving care. The case study focuses on the company’s newest product, a reference-based pricing product, and whether this concept was a short-term fad or whether Castlight Health could successfully implement this new product and strategy.
This case was prepared for inclusion in SAGE Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.
2023 Sage Publications, Inc. All Rights Reserved
Resources
Exhibit 1: Timeline
Early 2008: Company originated as Maria Health
End of 2008: Company changed name to Ventana Health Services
March 2010: Company renamed Castlight Health
October 2010: First public product demo at Health 2.0
March 2011: Named #1 in top 50 venture-backed companies by the Wall Street Journal
February 2012: Named in the top 10 most innovative companies in the health care industry by Fast Company
March 2012: Launched mobile experience
March 2013: Launched Castlight Pharmacy
May 2013: Named by CNBC in Top 50 Disruptors list
June 2013: Castlight CEO and Co-Founder testify in front of Senate Finance Committee on healthcare transparency
July 2013: Reaches two billion claims processed
July 2013: Launched Castlight Rewards
October 2013: Reaches four million covered lives
October 2013: Launched user reviews
February 2014: Filed S-1
Source: http://www.castlighthealth.com/about/ and casewriter analysis.
Exhibit 2: Competitor Information
| | Change HealthCare provides personalized cost and savings information to help people make informed, affordable health care purchase decisions. Using a series of sophisticated algorithms to import and analyze millions of health care claims across the full spectrum of care – pharmacy, medical, dental, and vision purchases – Change HealthCare generates actionable savings opportunities customized to employees, their plan, and network. |
| | ClearCost Health delivers both cost and quality information to health plan participants before they seek care. ClearCost Health offers self-funded plan sponsors a free, claims-based market analysis that details in-network provider price disparities and a group’s utilization of high- and low-cost providers; the savings that can be achieved as plan participants begin to factor price into their care decisions; and a roadmap of how to easily and affordably implement this service. |
| | Healthcare Blue Book is a health care marketplace where informed consumers can save money by choosing to get their care from thousands of “Fair Price” providers. Healthcare Blue Book helps consumers save on health care expenses while helping Fair Price providers attract cost-conscious consumers. Its consumer-friendly tool helps consumers quickly and easily understand what they should pay for the health care services they need. |
| | HealthSparq, part of the Cambia Health Solutions family of companies, develops health care transparency software solutions for health plans and employers to offer to their members and employees. Its integrated health care transparency solutions for information sharing and decision-making work by leveraging claims-based treatment timelines, costs, and treatment data linked together with consumer reviews and community discussions. The result turns patients into informed health care shoppers, allowing them to seek out better care, make smarter choices and save money. |
| | Truven Health Analytics delivers unbiased information, analytic tools, benchmarks, and services to the health care industry. Hospitals, government agencies, employers, health plans, clinicians, and pharmaceutical and medical device companies have used Truven for more than 30 years. It combines clinical, financial, and health care management expertise with innovative technology platforms and information assets to make health care better by collaborating with customers to uncover and realize opportunities for improving quality, efficiency, and outcomes. |
Source: Casewriter Analysis.
Exhibit 3: Executive and Senior Leadership Team
Giovanni M. Colella co-founded Castlight in 2008 and has served as Chief Executive Officer and a director since that time. Prior to founding Castlight, Dr. Colella served as Founder, President and Chief Executive Officer of Relay Health Corporation, a health care technology company, from 2000 until its acquisition in 2006. Dr. Colella holds an M.D. from the Universita Degli Studi di Milano in Italy and an M.B.A. from Columbia Business School.
Dena Bravata joined Castlight in April 2009 as Clinical Content Manager and has served as Chief Medical Officer since February 2010 and Head of Products since February 2013. Prior to joining Castlight, Dr. Bravata was a Senior Research Scholar at the Stanford University Center for Primary Care and Outcomes Research from July 2000 to April 2009 and was an internist in private practice for nearly a decade. Before entering private practice, Dr. Bravata worked as an attending physician at Stanford University and the VA Palo Alto Health care System. She holds a B.S. in Biology from Yale University, an M.D. from Columbia University and an M.S. in Health Research and Policy from Stanford University.
John C. Doyle has served as Chief Financial Officer, Vice President and Treasurer since November 2012. Previously, Mr. Doyle served in financial and operation leadership roles at Achaogen, Inc., Genentech, Inc., and Renovis. Mr. Doyle is a certified public accountant and holds a B.S. in Business Administration from California Polytechnic State University, San Luis Obispo, and an M.B.A. from the Haas School of Business at the University of California, Berkeley.
Michele K. Law joined Castlight as Chief Revenue Officer in October 2013. Ms. Law previously worked at OpenDNS, Inc., a software security company, from October 2008 until June 2013, first as Vice President of Business Development and Sales from 2008 until 2011 and then as Chief Operating Officer from 2011 until 2013. From September 2000 to January 2008, she served first as an associate from 2000 to 2003 and then as a principal from 2003 to 2008 at Greylock Partners, a venture capital firm. Ms. Law holds a B.S. in Electrical Engineering from Cornell University and an M.B.A. from Harvard Business School.
Randall J. Womack joined Castlight as Chief Operating Officer in November 2010. Mr. Womack served as the Chief Information Officer and Vice President, Operations, of SuccessFactors, Inc., a software company, from April 2003 to November 2010. From May 2000 to April 2003, Mr. Womack served as a partner in the Fast Forward Group at Greylock Partners, a venture capital firm. From 1997 to May 2000, Mr. Womack served as Chief Information Officer of Digital River, Inc., an e-commerce company. Mr. Womack attended the University of Texas, Austin, where he studied Finance.
Naomi L. Allen joined Castlight as Vice President, Business Development and Strategy in April 2008 and has served as Vice President, Product since April 2013. Prior to joining Castlight, Ms. Allen worked at McKinsey & Company, a management consulting firm, from 2004 to 2008, Microsoft Corporation, a software technology company, in 2002 and Deloitte Consulting, a management consulting firm, from 1996 to 2000. Ms. Allen holds a B.A. in International Studies from University of North Carolina—Chapel Hill and an M.B.A. from Stanford University, Graduate School of Business.
Nita Sommers joined Castlight in December 2009 and has served as Vice President, Corporate and Business Development since that time. Prior to joining Castlight, Ms. Sommers served as an Associate and then an Engagement Manager at McKinsey & Company, a management consulting firm, from 2007 to December 2009. Ms. Sommers also worked at Athenahealth, Inc., provider of cloud-based electronic health record services from 2000 to 2004 and at McKesson Corporation, a health care services and information technology company, from 2004 to 2005. Ms. Sommers holds a B.A. in Psychology from Harvard University and an M.B.A. from Stanford University, Graduate School of Business.
Source: Castlight S-1.
Exhibit 4: Castlight Health Integrated Platform Architecture
Source: Castlight S-1.
Exhibit 5: Consolidated Financial Results
Source: Castlight S-1.
Exhibit 6: Castlight Medical Application Graphics
Personalized Cost and Quality Information
Health Care Spending Summary
Source: Castlight S-1.
This case was prepared for inclusion in SAGE Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.
2023 Sage Publications, Inc. All Rights Reserved
