Wal-Mart gives major boost to domestic medical tourism movement

The retailer joins the ranks of companies sending employees to hospitals far from home in the name of less expensive and better care.

By — Posted Oct. 29, 2012

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A small but growing number of U.S. corporations are offering their insured employees the option of undergoing certain procedures at highly ranked health systems across America at almost no out-of-pocket cost to them — travel included.

The companies believe sending heart and spine patients elsewhere would result in improved care for patients and lower costs for employers. Although companies are just getting started in pushing what is often called domestic medical tourism, analysts say it’s something doctors should keep an eye on. Physicians may find patients bypassing them on the way to health systems elsewhere. Others may be handling pre- and post-care for procedures performed hundreds or thousands of miles away.

“We’re going to see a lot more of this,” said Simon Hudson, PhD, director of the SC Center of Economic Excellence in Tourism and Economic Development at the University of South Carolina and an expert on medical tourism. “And if physicians cannot compete on price, then they are going to have to compete on quality and exceptional customer service if they are going to keep patients.”

These programs usually involve a large company negotiating a bundled rate from a health system for certain services. The procedures are then offered to employees who need them, with no co-pays or deductibles. Travel expenses for the patient and a caregiver are usually thrown in. Employees still have the option of receiving these services in their hometown, but co-pays and deductibles apply. For example:

  • Wal-Mart Stores announced Oct. 12 that, as of Jan. 1, 2013, 1.1 million people covered under its employee health insurance will have access to heart and spine surgeries at one of six health systems identified as “Centers of Excellence.” The health systems are Cleveland Clinic; Geisinger Medical Center in Danville, Pa.; Mayo Clinic sites in Rochester, Minn., Scottsdale, Ariz., and Jacksonville, Fla.; Scott & White Memorial Hospital in Temple, Texas; Virginia Mason Medical Center in Seattle; and Mercy Hospital Springfield in Springfield, Mo. The latter hospital is the closest to Wal-Mart’s corporate headquarters in Bentonville, Ark.
  • As of Oct. 1, Boeing Co. had a similar arrangement for heart surgery at Cleveland Clinic for the company’s 83,000 nonunion employees, dependents and retirees.
  • PepsiCo announced Dec. 8, 2011, that the 250,000 employees covered by its health insurance plan could travel to Johns Hopkins Medicine in Baltimore for heart surgery and joint replacements with no out-of-pocket costs.
  • Lowe’s Companies started offering fully covered cardiac surgery at Cleveland Clinic in 2010 for its 234,000 employees and many more dependents on its insurance plan. The program expanded to chronic pain management and spinal surgery in September 2012.
  • HCR ManorCare, which has 60,000 employees, began offering fully covered cardiac surgery at Cleveland Clinic as of April 1.

Companies have released very little information about how many employees have traveled for care and how much money employers have saved. About the only information comes from Lowe’s, which reports that by the end of the first quarter of 2012, it had sent 50 employees and covered dependents to Cleveland Clinic for care. Although a small number, it exceeded expectations.

Health systems that have experience providing bundled payment arrangements say they are being approached by more companies looking for this kind of arrangement. The systems have said they are actively selling their services to national employers. Companies that have programs in place say they are looking for new procedures to make available and health systems to include.

“We’re looking to expand these programs to reduce our associates’ out-of-pocket medical costs and provide the highest quality of care,” said Randy Hargrove, a Wal-Mart spokesman. “And we plan to expand this program to include more procedures and providers.”

The shift to domestic medical tourism is in part because foreign medical tourism, which was talked about a few years ago as a means of controlling costs, never really took off. A report published Oct. 26, 2009, by the Deloitte Center for Health Solutions labeled the call for foreign medical tourism “tepid.” Sixty-nine percent in a survey of 3,000 patients included in the paper said they would not go outside the country for elective procedures.

“We have a perception that health care quality is much better here,” said Terry White, CEO of BridgeHealth Medical, a health care tourism company based in Denver. “Whether that is true or not is not the issue.”

Domestic medical tourism seems an easier sell. To some extent, there is comfort on the patients’ part in traveling for medical services. For instance, an issue brief published in September by the BlueCross BlueShield of Tennessee Health Institute found that 69.9% of 47,300 inpatient stays were not at facilities nearest to where the patient lived. In 43.4% of the cases, patients took a trip to larger facilities even though the services they needed were offered at their local hospitals. Some employees of the companies work in rural areas and traveled out of necessity, because the care they required wasn’t available nearby.

The health systems are devising ways to ensure that the primary care physician in the patient’s hometown is kept in the loop. For example, physicians with Geisinger Health System will have extensive discussions with a potential patient’s physician before accepting him or her for care. The communication will continue during the hospital stay and after the procedure.

“We want to make sure the handoff before the patient gets to us and after they leave is smooth and transparent,” said Alfred Casale, MD, Geisinger’s director of cardiac and thoracic surgery. “We will continue the interaction for as long as it takes, and we want to make sure the right patients are coming here.”

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