Independent Actuarial Study Validates Castlight’s Ability to Reduce Employer Healthcare Costs

A new study conducted by renowned actuarial firm Santa Barbara Actuaries (SBA) validates that employers who implement Castlight’s digital navigation solution realize significant savings in medical spend. We spent time with Heather Hagg, PhD, Castlight’s vice president of Operations & Analytics, to better understand her thoughts on the importance of this study and to discuss insights from the findings.   

Why did Castlight participate in this study? 

For employees, navigating healthcare continues to be an overwhelmingly complex experience. While employers work hard to offer great benefits and programs, getting employees to effectively engage and invest in their health and wellbeing remains a challenge. We know from our own experience working with America’s largest employers that true engagement only happens when you can connect employees with the right care in the moments that matter. That results in a healthier, happier workforce with better healthcare outcomes — which ultimately leads to reduced healthcare spend.

Unfortunately, that does not currently happen because employees do not have a solution that removes the complexity of receiving care. Therefore, they aren’t taking advantage of their full benefits, they can’t get care when they need it, they don’t get to use all the programs available to them, and their motivation to engage with their health and wellbeing decreases. 

Castlight’s health navigation solution provides a digital platform coupled with high-touch Care Guides advocacy services to provide a personalized, streamlined experience that makes it easy for an employee to access and engage with quality in-network providers, healthcare resources, and health and wellbeing benefits. Our thesis is: If we are successful in navigating employees and directly engaging them with their health, we should see positive outcomes. At Castlight, we have always internally documented the cost savings achieved through our platform, but we wanted to have our savings impact validated by a third-party actuarial firm that could independently evaluate the Castlight effect on medical spend using rigorous actuarial methods.

How does the study measure savings?  

This study used a matched cohort analysis study design. Using this approach, the team at Santa Barbara Actuaries examined the difference in spend between members who engaged with Castlight, members who did not engage with Castlight, and their respective matched control groups. Control groups were pulled from the IBM MarketScan® Research Database and were matched on demographics, clinical history, geography, plan type, and other factors against the Castlight eligible employer population. By comparing the difference in medical spends, the SBA team was able to conclusively attribute savings directly to engagement with the Castlight platform. We believe this study design to be the most rigorous used to date by any digital health solutions provider.

To read more details on the full study, Impact of Castlight’s Navigation Solution on Healthcare Costs, download a free copy of the report.

Why Santa Barbara Actuaries?

Castlight’s personalized, high-tech, and high-touch approach to health navigation is the most innovative amongst healthcare navigation solutions. We were thrilled to participate in a study with an equally innovative actuarial team. Led by Dr. Ian Duncan, a pioneer in the profession and a leading expert in the evaluation of healthcare intervention programs, Santa Barbara Actuaries is one of the most experienced actuarial and healthcare consulting firms with the highest standards in the country.

What were the overall results for Castlight?

The results demonstrated that Castlight’s approach to navigation works in engaging employees with their healthcare and drives behavior change leading to cost savings for the employee and the employer. 

For the over 45,000 members that were part of the study, the average 2019 per member per year (PMPY) medical spend for Castlight users was $339 lower than the average cost for members in their matched control group. The average annual medical cost per employee per year (PEPY) is $814 lower than the matched control. Examining 2018-to-2019 medical spend trends, Castlight users had a 9.1% lower rate of spend increase than the matched cohort, which for a large self-insured employer can result in millions of dollars saved. Moreover, these savings were observed across all age brackets and risk tiers, highlighting the positive impact Castlight can have on the whole population. All in all, this is an estimated annual savings of $5 million on the Castlight-user study population of nearly 20,000 members.  

We are thrilled that our digital navigation solution can make such a significant impact — and this study didn’t even include our high-touch offering! We are excited to measure the impact of our high-touch solution (Castlight Care Guides) in a future analysis. 

To explore the results of the study further, download a free copy of the report.