Walmart offers incentives to travel for complex medical procedures

April 1, 2013

Mercy Hospital Springfield provides spinal surgeries


This year employees of the retail giant Walmart have new options for health care that could add up to thousands of dollars saved on major medical procedures — provided these employees are willing to travel hundreds of miles for their care. And if they do, their travels may take them to Mercy Hospital Springfield, in southwest Missouri.

In the fall, Walmart announced it would provide surgeries and other procedures in a few select specialties at no out-of-pocket cost to its employees covered by the company's health insurance policy (about 1.1 million associates and their dependents nationwide). Focused on heart, spine, and transplant surgeries, the new benefit provides that these procedures be performed at six major hospitals or health systems in the U.S.

The patient must be well enough to travel to one of these selected "Centers of Excellence" in order to take advantage of the no deductible, no co-pay benefit. Walmart said it also will cover the costs of that travel, including transportation, lodging and food for both the patient and a companion.

"There is a pretty strong financial incentive (for the patient) to come to Springfield," said David Cane, a regional vice president for Chesterfield, Mo.-based Mercy, which operates the 886-bed Mercy Hospital Springfield.

It is one of three hospitals designated to provide spine care to Walmart employees, based on geography. Employees from a 30-state region that extends from Maine to Oklahoma would visit Mercy, while those from other parts of the country may receive spine care at Scott & White Memorial Hospital in Temple, Texas, or Virginia Mason Medical Center in Seattle. Procedures will include lumbar spinal fusion and total disc arthroplasty.

The Cleveland Clinic in Cleveland; the Geisinger Medical Center in Danville, Pa.; Scott & White Memorial and Virginia Mason have been identified as centers for heart surgeries including bypass grafts and heart valve replacement. Mayo Clinic sites in Minnesota, Arizona and Florida will perform organ transplants. Walmart has had this sort of arrangement with Mayo since 1996.

Patient's call
Cane explains how the program works using a hypothetical patient from Piscataway, N.J., who has been told he needs a lumbar fusion surgery.

At this point, the patient has a choice: "They can still go to their local neurosurgeon and have the procedure at their local hospital, but they would have to pay their deductible and other out-of-pocket expenses," Cane explained. "Or they can come to Mercy (more than 1,000 miles away from Piscataway) and they'll have airfare covered for them and a loved one. And their hotel. And they don't have to pay anything out of pocket."

Randy Hargrove, a Walmart company spokesperson, said Walmart chose the six clinical sites because they are among the best in the country, with established, accredited programs in the desired specialty areas, with physician incentives based on patient outcomes (not on the number of patients seen or procedures performed), and with high scores on quality measures.

"The key to this program is it will improve the quality of care our associates receive … (and) reduce our associates' medical costs," Hargrove said, explaining that for a major spine surgery or transplant done at a local in-network hospital the patient might have to pay as much as $5,000 to $10,000 out of pocket.

Reducing unneeded surgeries
Hargrove said the company expects to save some money as well.

How can the company, which is adding transportation and lodging costs to the medical bill, save costs?

The key is that the patient from Piscataway may not actually need a lumbar fusion, explained Dr. Alan Scarrow, a neurosurgeon and president of Mercy Clinic Springfield Division. In its previous experience with Mayo, Walmart found that by sending transplant patients to a specialized treatment center, the number of patients who actually needed transplants dropped dramatically, Scarrow said. Walmart is betting the trend will hold for spine and heart procedures.

In the specialty of spine medicine, there is considerable controversy over "skyrocketing" rates of spinal surgeries, Scarrow said. And while "some diagnoses do lend themselves to fusion" there are often other less aggressive and less expensive treatments that are likely to be as effective. Those may include a less aggressive surgery, steroid injections, physical or chiropractic therapy, weight loss or psychological care. All of these cost far less than the $60,000 or more Walmart may have to pay for a lumbar fusion.

"The surgery that never happened — because it didn't need to happen — is a lot cheaper than any surgery they get a discount on," Scarrow said.

The medical team at Mercy has been working on reducing unnecessary procedures for several years, Scarrow said. By the time Walmart came to them, the hospital leadership already was preaching this message to employers in the Springfield area.

The gorilla in the room
"When the Walmart folks walked in, they said essentially the same thing I have been saying to local employers: 'You have got to look at your utilization.' That is the 800-pound gorilla here," Scarrow said. "And until you get your arms around that, you don't really know what you're missing out on, in terms of cost savings."

Walmart employees who come to Springfield are evaluated by a team of specialists including two surgeons and two nonsurgical specialists. The team then decides the best course of treatment. If surgery is warranted, the patient remains in Springfield for an extra two days post surgery to make sure they are ready to travel, and their follow-up care is coordinated between Springfield and the patient's hometown physician, Scarrow said.

Long-distance care coordination poses an extra challenge, Scarrow said, but one that the medical profession needs to learn to tackle.

"This is health care evolving from a local or regional resource to a national or international resource," he said. "We have got to compete. It is folly to think that every hospital in the country that does spine and heart surgery is going to continue to do this as they are. You are seeing fewer and fewer health systems (and the ones that remain) are bigger and bigger. If we don't do it, somebody else will, either on our shore or offshore."


Copyright © 2013 by the Catholic Health Association of the United States
For reprint permission, contact Betty Crosby or call (314) 253-3477.

Copyright © 2013 by the Catholic Health Association of the United States

For reprint permission, contact Betty Crosby or call (314) 253-3490.