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Wal-Mart, six hospitals launch bundled payments for workers' surgeries

About 1.1 million workers and dependents will get no-cost cardiac, spinal surgeries

Topics: Labor Expense, Workforce, Productivity

October 12, 2012

Wal-Mart next year will cover cardiac and spinal surgeries for more than one million U.S. employees and dependents through bundled payment agreements with six hospitals, including Cleveland Clinic and Mayo Clinic.

Beginning in January 2013, about 1.1 million employees and dependents enrolled in the company's health plan will get access to consultations and care for certain cardiac and spine procedures at no additional cost to them. Wal-Mart will also cover the cost of travel, lodging, and food for the patient and one caregiver.

The company on Thursday announced the selection of six "Centers of Excellence" for the program:

  • Cleveland Clinic;
  • Geisinger Medical Center in Danville, Pa.;
  • Mayo Clinic sites in Arizona, Florida, and Minnesota;
  • Mercy Hospital Springfield in Springfield, Mo.;
  • Scott & White Memorial Hospital in Temple, Texas; and
  • Virginia Mason Medical Center in Seattle.

The arrangement expands the company's partnership with Mayo Clinic for transplant surgeries that launched in 1996 and will make Wal-Mart the first retailer to offer a national program that covers heart, spine, and transplant procedures.

Wal-Mart expects the program to reduce health costs through bundled payment agreements with the participating hospitals.

  • Want to know more about the mechanics of bundled payments? Health Care Advisory Board's Rob Lazerow demystifies the model.

"I think what it addresses for a company like Wal-Mart is the ability to reduce the variation in outcome from a quality and cost point of view," says Michael McMillan, Cleveland Clinic's executive director of market and network services. He calls the arrangement a "triple win," saying, "It's a boost in quality, it's an improvement in value and it's no cost out-of-pocket for employees, so we think it is a great opportunity."

According to Reuters, the move could have a ripple effect because Wal-Mart is among the largest employer in the country, second only to the U.S. government (Wohl, Reuters, 10/11; Evans, Modern Healthcare, 10/11 [subscription required]; Zeltner, Cleveland Plain Dealer, 10/12)

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