RockHealth, the San Francisco health-care accelerator, took a hard look recently at documents filed by Castlight Health, the big business-to-business health price transparency player, which is planning a public stock offering. Castlight collects data with a goal of reducing health costs for employers. The RockHealth view was none too rosy. An excerpt:
“As Castlight recognizes that large, deep-pocketed health plans will happily give away or deeply discount price and quality transparency tools in order to sell more health insurance or health insurance administration services, placing significant price pressure onto the overall market for transparency solutions. Castlight’s business model affords no such luxury—it must sell subscriptions to employer customers. If employers are able to access a roughly equivalent product through their health plans at a highly discounted price, Castlight could struggle to grow its base of customers and renew its existing ones.”
