business news in context, analysis with attitude

CNBC has a story about Walmart’s approach to improving both the effectiveness and efficiency of the health care it offers to its employees, which has been so successful that it has co-authored a piece that ran in the Harvard Business Review “in an effort to disseminate its ideas more broadly.”

Essentially, it comes down to this: Rather than just focus on lowering the costs, which certainly was part of the equation, Walmart “looked for ways to improve overall health outcomes for their workers, so they could return to work, including by offering travel programs for workers to see doctors at top hospitals who were not incentivized to push for an unnecessary surgery.”

At the heart of the program, the story says, “is an idea that health care incentives need to change. Rather than paying health providers for performing procedures and tests, Walmart rewards them for overall health outcomes. And it's going well, so much so that Walmart wants to encourage other employers to follow its lead.”

The story goes on to point out that Walmart’s Centers of Excellence program “requires its employees to use a curated list of hospitals for some surgeries … It started with a relationship with Mayo Clinic, but Walmart has been forming these arrangements with other health centers including Geisinger. Spine surgeries were an early focus, as they are expensive and often unnecessary.

“Sometimes, these hospitals will agree with the community physician and recommend surgery. But they'll often diagnose the patient with a different condition … or they recommend physical therapy or other less invasive options instead … Walmart employees also get their travel paid for to get second opinions on cancer diagnoses and heart surgeries.”

Jonathan Slotkin, a director of spine surgery at Geisinger, says that the experience is equivalent to the kind of "concierge, white-glove care that was reserved at other companies only for highly paid executives.”
KC's View:
One of the interesting things about this story is that it makes the point that Sam Walton was complaining about the cost of health care more than three decades ago, and it has taken this long to get a handle on things. It also argues that this battle also is the one being fought by Amazon, Berkshire Hathaway and JPMorgan Chase in their new healthcare venture.

The battle continues.