Here’s a common story: someone gets hurt or becomes seriously ill. They ping pong between specialists and hospitals: bills mount, and finally it’s determined that the patient need surgery. That’s another expense.
But here’s a twist: in this story: the patient’s employer steps in to say “it’s covered.” Not only is the procedure paid for, but it will take place at a top facility. Travel and hotel costs are also covered. Sound too good to be true? One employer has developed such an approach, and it’s none other than Walmart.
Jenny Deam covers the business of health care for the Houston Chronicle. She says Walmart is not the first corporation to create such a program, but it’s the company with the largest number of employees, at 1.5 million.
“They’re saying… if you have any one of a handful of very specific, serious conditions: that could be a transplant or cancer, all the way to a near hip replacement, we will pay to have you sent to what’s called a center of excellence,” Deam says.
Texas has centers of excellence in Houston and San Antonio. There are 12 around the country. Deam says the centers of excellence are known for their specific expertise. Deam says there is an assumption that the centers’ expertise will make it less likely that mistakes are made, and therefore create less expense for the employer.
Deam says officials at Memorial Hermann Hospital in Houston, which is one of the centers of excellence, told her that 40 percent of patients who have been told they need surgery before coming to Memorial Hermann do not actually need procedures performed, once they have ben reassessed in Houston.
Deam says the Walmart program saves money by negotiating flat fees with providers, or bundled rates that include a variety of services.
“The incentive there is, they better do it right, they better do it well the first time because if they have to go back and do it again, they’re not going to get paid again,” Deam says.
It’s unclear whether this model could work for other employers, Deam says. Health analysts question whether other companies have the same ability to negotiate pricing that Walmart does. Deam says that acceptance of bundled pricing model isn’t a sure thing, either.
Written by Angela Bonilla.