Individuals and self-insured companies have adopted various strategies to reduce the rising cost of healthcare for themselves and their employees. A recent article discussed how Walmart was flying employees who were candidates for particular surgical procedures to selected, distant hospitals for evaluation (see: Walmart Flies Employees to Top Hospitals for Surgeries in a Bid to Cut Healthcare Costs). Below is an excerpt from it:
Walmart’s answer [to rising healthcare costs] is its six-year-old Centers of Excellence (COE) program. In partnership with third-party administrator Health Design Plus (HDP), Walmart directly contracts with the following leading medical centers for procedures, such as hip or knee replacements, heart or back surgery, or cancer treatments: Cleveland Clinic in Ohio; Geisinger Medical Center in Pennsylvania; Mayo Clinic in Arizona, Florida, and Minnesota; and Virginia Mason Medical Center in Seattle. Patients incur no out-of-pocket costs for travel to a COE facility and most plan procedures and consultations are fully covered. Until 2018, the COE program was optional for Walmart employees. Now, employees may be on the hook for the entire cost if they opt to have a covered procedure performed locally....General Electric, Lowe’s, McKesson, and Boeing also are directly contracting with high-quality healthcare providers to control costs and improve outcomes.
In Utah, medical tourism of another kind is bringing down employer healthcare costs....[A] state program dubbed “pharmaceutical tourism” incentivizes state employees to buy certain prescription drugs in Mexico (see: High prescription drug prices drive "pharma tourism" in Mexico). Patients [of one particular insurer] are flown with a companion from Utah to San Diego and then transported by private car to Tijuana where their prescriptions are filled. Even with travel expenses and a $500 cash bonus to program participants, the state’s employee health plan saves 40% to 60% percent each time a prescription is filled in Mexico.
Although the article cited above does not emphasize this particular point, the cost of, say, a hip replacement may not be less at Cleveland Clinic or Geisinger than at the local hospital of the Walmart employee. Part of the cost savings for Walmart with its COE program is that the surgeons at their designated hospitals may make the determination that the surgery being sought is not clinically indicated. Such an opinion thus contradicts the recommendation of the employee's personal orthopedic surgeon. This point is emphasized in the Q and A section discussing the details of the Walmart COE program (see: What happens if a doctor recommends surgery and the Centers of Excellence facility does not?). Below is the diplomatic response of the company to this question:
If a Centers of Excellence doctor recommends against surgery and an associate decides to follow a different doctor’s treatment plan, they may have to pre-certify the surgery with your medical claims administrator, and their surgery will be subject to regular coverage limits under their medical plan.
I had also not previously encountered the notion of "pharma tourism" mentioned in the excerpt above. It's analogous to medical tourism whereby a consumer, often uninsured, travels to a foreign country like Thailand for an operation like a hip replacement for a lower price (see: Thailand top destination for medical tourists). This program in Utah is only applicable for certain drugs like Humira. Here's data on the cost of Humira from GoodRx which is a lower price drug provider (see: With No Humira Generic in Sight, Here’s How You Can Save Now):
If you’re filling Humira for rheumatoid arthritis or Crohn’s disease every month, you’ve likely experienced some sticker shock at the pharmacy. The average cash price for a 30-day supply of Humira is over $5,500, and prices only continue to increase. In fact, the price for Humira has nearly doubled since 2014.
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