Dive Brief:
- Some large companies across the U.S. are covering the entire cost of certain surgeries for employees willing to undergo the procedures at select hospitals, which may require travel, Kaiser Health News reports.
- They make it work through bundled payment deals, in which employers pay one flat rate for the procedure and any further costs for complications or physical therapy in a certain time frame.
- The arrangements are similar to that of Medicare's new bundled payment rates for hip and knee replacements, though Medicare patients may have some out-of-pocket costs.
Dive Insight:
The impacts on hospitals are also different in that private deals increase participating hospitals' business and revenue, while Medicare's bundled payment system applies to all hospitals in a participating area.
The experiments in bundled payments are already yielding some lessons, while providing an attractive benefit to employees, saving employers money, and yielding new business for participating hospitals.
The Pacific Business Group on Health negotiates bundled payment prices for large employers, including Lowe’s and Walmart that are 20% to 30% lower than what the companies would normally pay for the procedures, KHN reports.
Lowe's has worked to overcome some early obstacles, including getting patients' medical records from local doctors, and assuring patients could reconnect with out-of-town providers for follow-up questions.
Finally, one of the biggest lessons learned was an unexpected one, Olivia Ross, The Pacific Business Group's health associate director, said. They found that aside from cutting costs for procedures, these programs are significantly reducing the number of procedures being performed.
“We’re seeing up to 30% — close to 30% of cases — who should not be moving forward with the joint replacement,” Ross told KHN. This is because recommendations for surgery from local doctors are often deemed inappropriate by physicians at the selected hospitals, she explained.