Retailer taps six health systems across the country for spinal, heart procedures
BENTONVILLE, AR - As it looks to both reduce out-of-pockets costs for employees, while also lowering its total healthcare costs, global retailer Walmart announced last month a new program that will pay 100 percent of the costs for certain spine and cardiac surgeries plus travel expenses at six selected healthcare systems across the country.
Starting Jan. 1, the "Centers of Excellence" program will be offered to any of the company's 1.1 million covered employees, family members or dependents on a voluntary basis and will also include the travel and lodging expenses of a companion, with the only caveat being that the person receiving the care is well enough to travel.
Participating in the program are the Cleveland Clinic in Cleveland; Geisinger Medical Center in Danville, Penn..; Mayo Clinic sites in Rochester, Minn., Phoenix and Jacksonville, Fla.; Mercy Hospital Springfield in Springfield, Mo; Scott & White Memorial Hospital in Temple, Texas; and Virginia Mason Medical Center in Seattle.
According to Randy Hargrove, a Walmart spokesman, covered employees and their families are not required to take part in the program, though its offer of paying for 100 percent of the costs of the procedures without co-pay or deductibles is expected to attract a significant number of those requiring the procedures.
"We initiated the program to ensure our associates and their covered family members have the opportunity to receive the highest quality care at some of the premier hospitals in the U.S.," said Hargrove.
In addition, the program is intended to help Walmart employees identify where they can receive these procedures, as "many may not know where to go, or who may specialize in these procedures and through our Centers of Excellence we have identified facilities that specialize in that care, have an established accredited program for spine or cardiac care, have a experience with travel if that is involved," Hargrove added. "It is really giving them education, transparency and options that they didn't have before."
What is also driving the program is the documented wide variations in both cost and quality for common medical procedures from region to region and even hospital to hospital. As the largest private employer in the country, Walmart also has the purchasing clout to negotiate bundled payments for care episodes as a way to address these significant cost variations.
Sabrina Corlette, research professor at the Health Policy Institute at Georgetown University in Washington, says that this program has the potential to bring cost and quality transparency back into the system.
"This is an excellent example of an employer who is working to contain costs while also ensuring their employees are getting high-quality care," Corlette said. "When Walmart talks, that has a lot of influence."
States, too, can see the benefit, as evidenced by the recent push by the National Education Association Alaska plan to offer travel benefits for its 17,000 members to seek care outside the state. Private insurer Premera Blue Cross Blue Shield is offering a similar program to roughly 32,000 of its 100,000 members in Alaska.
A report for the Alaska State Health Commission conducted by Milliman last year showed wide cost variations for a number of procedures performed in Alaska and a number of states in the Northwest. For example, the average cost of inserting a coronary stent in Alaska was $4,487 compared with just $1,331 in Washington state.
Walmart, with employees spread across all 50 states, has the advantage of being able to pick from the cream of the crop across the many regions in the country to serve its associates and to encourage them to seek care at the Centers of Excellence regional medical center nearest them.
As Steve Sibbitt, chief medical officer for the Temple region for Walmart Centers of Excellence partner, Scott & White sees it, the program is the kind of value-based purchasing that can serve as a model for squeezing cost out of the system.
"I think what you are seeing is the beginning of what healthcare in this country is transitioning to. Whether it is employers or insurers they are searching out the greatest value for the lives that they cover," said Sibbitt.