Walmart is not the only employer advocating for change.
Berkshire Hathaway’s Warren Buffett, who formed an alliance with J.P. Morgan CEO Jamie Dimon and Amazon’s Jeff Bezos, has described health care as the “hungry tapeworm on the American economy.” The trio of executives formed a nonprofit company in 2018, called Haven, to figure out how to stem health costs with technology.
Walmart, which also offers pharmacy service and health clinics, has been aware of the problem for much longer than that. The Harvard Business Review piece noted that its founder Sam Walton in a meeting with senior leaders almost thirty years ago described health care as “skinnin’ us alive” He went on: “if we don’t get it done this year, I’m gonna get real upset. I mean real upset.”
The company’s Centers of Excellence program, which requires its employees to use a curated list of hospitals for some surgeries, has been in place for about six years. (It was optional until 2018.)
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, like Bill, or they recommend physical therapy or other less invasive options instead.
Geisinger’s Slotkin described the experience as “concierge, white-glove care that was reserved at other companies only for highly paid executives.”
Walmart employees also get their travel paid for to get second opinions on cancer diagnoses and heart surgeries.
At the heart of the program 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. And Geisinger said wants to make the program available to smaller employers, including mid-sized companies.
“This has been a journey we’ve been on for several years,” said Woods, a senior director in Walmart’s benefits department, in an interview with CNBC. “We’re committed to sharing what we learn.”