Walmart and Lowe’s have taken the notion of the super discount to a whole new level. They have contracted with four medical centers across the United States to perform knee-replacement and hip-replacement surgeries at no-cost to their insured employees and their dependents (1.4 million eligible people in all). The program is strictly voluntary; employees are still free to use other surgeons and medical centers, if they don’t mind paying their usual deductible and coinsurance. However, those who have their surgeries performed at the contracted centers will not have to pay anything at all. Nada. Not only that, the patients’ and their caregivers’ travel expenses will also be covered.
This contractual agreement is part of a, “growing trend in which health care providers receive a negotiated bundled payment.” (Beth Howard, “A New Ticket to FREE Joint Replacement”, AARP Bulletin, January-February 2014).
The contracted medical centers were reportedly selected based on their high volume of joint operations and their low rates of complications and repeat operations. These four facilities are: John Hopkins Bayview Medical Center (Baltimore), Virginia Mason (Seattle), Kaiser Permanente (Irvine, California), and Mercy Hospital (Springfield, Missouri).
David Lansky, CEO of the Pacific Business Group Health Negotiating Alliance explains that Such arrangements are attractive to employers because they “provide transparent and predictable costs.”
No doubt, Walmart and Lowes are receiving steeply discounted prices based on sheer quantity. Organizations and corporations with substantially fewer employees may not be able to strike such a deal, unless, perhaps, they band together as a coop.
If you design and contract healthcare benefits for a large organization, could patient-bundling help you to predict and contain medical costs? This strategy may be especially attractive if your organization offers a self-insured benefit plan.
On the flipside, given the publicity of Walmart’s and Lowe’s latest employee benefits, what’s to stop individuals who have been considering hip or knee replacement surgery from inundating the two firms with job applications?
Lowe’s encourages us, in its ads, to “Never Stop Improving.” So why not do a little hardware replacement on our bodies as well as on our homes?