US Healthcare: Top Dollar for Questionable Quality

20 for 2020 is a newsletter sent to 20 people in preparation for the U.S. Presidential election of 2020. The recipients include Business, Government and Society members including three Presidential candidates. The newsletter goes beyond the headlines and provides factual information on key issues including healthcare, the economy, society and how we can come together as a nation and as a people.

June 2019 is the first issue and its subject matter is healthcare.

Many of you may be aware of Haven, the health care initiative formed by Amazon, Berkshire Hathaway and JP Morgan Chase. It is just getting started and looks to have a technology bent. I recently became aware of Walmart and its approach to healthcare for its employees.  It is impressive in its Centers of Excellence Approach and in its findings.

In 2009 I worked for a radiant heating and cooling manufacturer that approached Walmart about utilizing its products. I was informed by the company’s director of commercial sales that when he went to meet with Walmart, it became apparent to him that Walmart knew about the company’s product than the company did and had even developed novel approaches for using the product efficiently. Walmart is a very thorough company in its research and even knowing this I am very impressed with their research and approach to healthcare. Walmart’s findings and the fact that they feel the need to research the healthcare their employees receive says a lot about the dismal state of healthcare services in the United States today, how it is like a mine field and how insurance companies are failing to weed out the incompetence.

According to a recent article in Managed Care, “ Walmart, the world’s largest employer—2.2 million employees, or “associates,” worldwide, 1.5 million of whom are in the U.S., is going directly to the high-value health care systems and physicians, steering clear of the low-value providers and the health plans that have contracts with them.”

“The retail giant is using centers-of-excellence contracts by which it pays high-value provider organizations to treat specific medical problems—back pain, joint problems, suspected cancer—in its employees, wherever they live. Walmart is also contracting directly with ACOs that accept responsibility on a per capita basis for the quality and cost of care for Walmart employees in a local market.”

Here are some of Walmart’s findings:

Spine surgery. Of employees who have been told by their physicians or local hospitals that they need spine operations, the centers of excellence found that more than 50% actually didn’t. Using the centers reduced readmissions in spine-surgery patients within 30 days by 95% compared with facilities at home. And employees undergoing procedures at the centers of excellence were able to return to work an average of three weeks sooner than in other facilities. (Mercy Springfield, Springfield MO)

Joint-replacement surgery. Twenty percent of employees who’d been advised locally that they needed joint-replacement surgery learned at the centers of excellence that they did not. Readmissions within 30 days were 70% less at the centers. (John Hopkins Hospital, Baltimore, MD)

Weight-loss surgery. In tracking patients for nine months after their procedures, said Woods, Walmart found that using the centers resulted in a 70% reduction in drug costs. (Geisinger Medical Center, Danville, PA).

Cancer. Roughly one third of Walmart associates diagnosed with cancer go to a center of excellence—in this case, Mayo Clinic—for care, she reported. Of those, 55% received a “new or adjusted” treatment plan there—and 10% a new diagnosis entirely. “We have associates that have been told that they have cancer and when they get to Mayo Clinic, they learned they don’t have cancer,” Woods, Walmart’s Senior Director of US Healthcare said. “We [also] have associates where cancer has spread, and they were not aware of it.”

In a recent article in Becker’s Hospital Review, Walmart was profiled for using its center of excellence approach for imaging. Walmart is recommending its employees use one of 800 imaging centers found to provide more accurate diagnoses, according to Kaiser Health News.

The move came after Walmart officials discovered that about half of the company's workers who underwent back surgery in the past few years actually didn't need those operations due to misdiagnosis. A large issue was employees' diagnostic imaging like CT scans and MRIs had high error rates, Lisa Woods, senior director of benefits design for Walmart, told Kaiser Health News.

The list of high-quality centers was curated for Walmart by New York City-based health analytics firm Covera Health. Covera Health uses data to designate which imaging centers will be the most accurate for conditions from cancer to torn knee ligaments.

Covera Health is a public company whose approach and  “understanding of quality is deeply rooted in data analytics and an innovative, quality-based Provider Collaborative.”

Covera Health conducted an experiment for a peer reviewed study and found that diagnostic error rates can be as high as 40%. The experiment was done by sending the same patient to 10 regional imaging centers for an MRI and having a base line and follow up MRI done, all within a 3 week period to see the variance and error in the results. See Covera Health Spine Study

While much of the news in health care focuses on the abusive pricing of pharmaceuticals, it is important to see that the issues are much deeper and require more attention to fix, if the United States is to have quality and dependable healthcare for its citizens.

From an industry analysis standpoint, it is a sign of systemic issues when corporations feel the need and see the benefit of getting involved in sourcing quality care for their employees and sifting through the rubbish. Having employers involved in health care may not be desirable by those that deem their health issues private and would like to keep them that way.

The U.S. presently and for the past five years or so has spent approx.. 17.9 percent of its GDP on healthcare, up from 6% in 1970.

The US spends more than $10,000 per capita on healthcare which is greater than China’s GDP per capita and nearly twice as much as what Germany, France, and the United Kingdom spend per capita on healthcare. (Source: World Bank, Kaiser Family Foundation Analysis of OECD and National Health Expenditure Data).