October 16, 2019

Why Amazon is steering cancer patients away from local hospitals

Daily Briefing

    To reduce health spending, Amazon is now paying for employees with cancer to travel to Los Angeles to see leading specialists at City of Hope health system, Melanie Evans reports for the Wall Street Journal.

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    Details on the program

    Employees can use the new travel benefit for any cancer diagnosis, regardless of their local options, Evans reports. Those who choose not to travel can still meet with doctors at City of Hope via videoconference, if allowed by state regulations. Over 380,000 of Amazon's employees and their families across the United States are eligible for the benefit.

    According to Dene Sparrman, Amazon's director of global benefits, the company hopes to reduce the chances employees receive the wrong diagnosis, which can inflate health care costs.

    "Instead of waiting for patients to get the wrong care first, then reaching out to the expert, this model is designed so that the patient has access to expertise as early as possible to help ensure the correct care is delivered first," Sparrman said.

    Amazon isn't the only employer to contract with City of Hope. The health system started contracting with employers through multiple programs last year. So far, 84% of complex cancer patients that City of Hope has seen through one of its employer programs have received a new diagnosis or treatment plan, the health system said.

    Amazon officials said Haven, the health care venture it launched last year with JPMorgan Chase and Berkshire Hathaway, wasn't involved in the launch of the new travel benefits program.

    A growing trend

    With the program, Amazon joins a number of employers, including Lowe's, McKesson, and Walmart, that have begun paying for travel and lodging expenses for employees to seek care at larger hospitals, Evans reports.

    Walmart under its Centers of Excellence (COE) program, for instance, directs its employees and their dependents to better-performing hospitals, called "centers of excellence," for certain cancer evaluations, organ transplants, and common surgeries like heart, hip, knee replacement, and spinal procedures.

    Proponents of the programs say that companies are able to get competitive prices and employees can receive better care and avoid unnecessary treatment by shopping around nationwide rather than relying on local providers, Evans reports.

    Lee Lewis, chief strategy officer at Health Transformation Alliance, said, "If you're able to look nationally, you're just going to have more choices." However, Lewis added that travel programs require more work to run and employees may still be reluctant to travel away from home while sick or undergoing a procedure.

    Still, while not much has been published on the success of these programs, the results that do exist indicate the programs save money and reduce unnecessary care, Evans reports.

    According to internal Walmart data, nearly half of Walmart employees who had spinal surgery or a medical evaluation without surgery did so at a COE site between 2015 and 2018. Surgery at a COE site costs about 8% more than elsewhere, but the benefits have outweighed that cost, according to Lisa Woods, Walmart's senior director of U.S. benefits, and a group of colleagues who authored a piece on the program earlier this year (Evans, Wall Street Journal, 10/15).

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