Castlight Health CEO warns Jeff Bezos that health tech is a 'tough business'

Key Points
  • Castlight Health's navigation tool for employees is used by dozen of self-insured employers, including Amazon.
  • Castlight's CEO has a few thoughts for Amazon's Jeff Bezos as he makes new moves into the sector.
  • Amazon this week partnered with Berkshire Hathaway and JPMorgan in a new initiative aimed at reining in health care costs for their own employees.

Castlight Health works with dozens of large employers, including Amazon, to help workers navigate their health benefits with its online tools.

So it would make sense that its CEO John Doyle would be a key resource for Amazon and its partners, Berkshire Hathaway and JPMorgan Chase, in their plan to curb workers' escalating health care costs, in part with new technology.

But Doyle was just as surprised at the news as most everyone else. No one in his network seemed to have advance knowledge either, he told CNBC.

So we asked Doyle what stood out about the partnership, aside from the secrecy.

As a veteran executive at Castlight, Doyle has experienced his fair share of ups and downs — at its lowest point, his company was referred to as the most overpriced IPO of the century. Needless to say, he had a few thoughts to for a team trying to change health care. founder and CEO Jeff Bezos.
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CNBC: Amazon is one of your customers. Is there anything about their health benefits package that stands out from the rest of the industry, and points to their potential plans in the space?

John Doyle: Our experience is that Amazon is focused on a competitive benefits package for its employees, but we don't see anything that would be suggestive of their announcement this week. But I will say is that Amazon seems to think about the world in terms of long time periods, and when you extrapolate the current spending out into the future, it gets harder and harder to provide such great deals and convenience to consumers.

It's not too speculative to imagine that the initiative is about ensuring the sustainability of current benefits, as opposed to reducing current health costs.

CNBC: A lot of self-insured employers have talked about this "narrow networks" concept to reduce costs by incentivizing employees to see carefully-selected, high-quality physicians. Do you think that takes away from notions that workers should get to see whichever doctor they want? And what do you think Amazon and its partners will gravitate to?

Doyle: Well, I don't see the two things as mutually exclusive. It's important to have choice. But the issue we see a lot in health care is that choices are sometimes made that are objectively poor choices for both the employee and employer. And that's from both a cost and quality standpoint. Health care is one of the few industries where you don't always see correlation between the two.

So I think of it as using the information we can now access to curate the universe of choice but within a set of options that we know to be good for the employee and the employer. And that's by cleaving off the part off the ecosystem that is overpriced and poor quality.

CNBC: Do you think this initiative has the potential to upend health care as we know it?

Doyle: I don't want to minimize the capabilities of people like Jeff Bezos and Jamie Dimon, but I also don't think it makes sense to assume that success in their domains predicts a linear path to success in health. This is a very tough business. There's this notion that it's easier to disrupt if you bring in a lot of people who have never worked in health care, like technology-oriented entrepreneurs with great intentions. But I see that as missing some of the complexity and falling prey to the siren song of fixing health care. The better approach in my mind is to work with the existing players, and not against them.

CNBC: What do you think this means for Castlight, if anything?

Doyle: I was reflecting on that and I see one attribute that Bezos and Amazon have that should cause us all to take notice. It's not so much that he comes up with novel aspirations. What distinguishes him when I reflect on what he's accomplished is the uncanny sense for the adjacent possible. Castlight has been around for 10 years and we've started on some problems that were too early in terms of where data science, tech and consumer behavior actually were.

CNBC: So who ought to run this new initiative?

Doyle: I would give a call to Todd and Ed Park at Devoted Health (a venture-backed Medicare Advantage start-up). They're super deep technologists and incredibly well-respected, but also courageous. It needs to be someone with clear decision-making authority who can withstand incredible headwinds that really big interests in health care will react to when a new entity comes along.