A healthcare price-comparison startup started by the founder of RelayHealth and the co-founder of athenahealth has raised $60 million in funding, including an investment from the Cleveland Clinic.


Giovanni Colella, MD, who founded RelayHealth, and later sold it to McKesson, started Castlight Health with Todd Park, a founder of Watertown, Mass.-based athenahealth in 2008. Park now serves as CTO of the U.S. Department of Health and Human Services. The company also names Bryan Roberts, partner at Venrock, one of the firms participating in the funding, as a co-founder.


"The drive toward patient responsibility in healthcare combined with the complete lack of information to support that transition has landed Castlight Health in the middle of the perfect storm," said Roberts,. "The company is empowering individuals to take control of their health care expenses – something that has eluded this country to date. This is a huge market, with extraordinary and palpable customer demand."


Delivered as a Web-based service, Castlight Health is working with companies – supermarket chain Safeway is its first customer – to provide employees with individual level views of their healthcare benefits and costs. As Castlight executives see it, this granular detail enables employees to become informed consumers and shop for healthcare services by revealing out-of-pocket costs, alerting users about cost saving opportunities, as well as offering additional information about physicians and procedures.


Castlight Health Series C round of funding included new investors Morgan Stanley Investment Management, and The Wellcome Trust, U.S. Venture Partners, as well as Cleveland Clinic. The funding round also included existing investors Maverick Capital, Oak Investment Partners and Venrock.


The funding will be used to accelerate hiring and further product development.
"The continued dramatic rise in healthcare costs has propelled consumer financial responsibility for medical care as companies seek to rein in benefit expense growth. said Colella.  "However, this increased burden on individuals is currently accompanied by a total absence of tools with which to make informed decisions." 


"Even the most educated person has no idea how much a given medical procedure or appointment will cost them because there is no information available, he added. "In fact, the physician providing the service usually can't even tell you. We're dedicated to solving this problem."


"Understanding the health care system is a daunting task," said David Singer, partner at Maverick Capital, which led the round of financing. "The strength of this team, combined with the power of their vision, makes Castlight Health an exciting venture with tremendous potential. They are addressing one of the top issues facing the United States today."