If you could save money on copayments and deductibles, and your employer offered you the opportunity to go out of town (but still inside the USA) for certain medical procedures, would you do it?
Employees of Wal-Mart and Lowes Home Improvement Centers can now elect to travel to four medical centers in Baltimore, Seattle, Irvine, Calif., or Springfield, Mo., sites selected for the Employers Centers of Excellence Network. The employee doesn’t pay any out-of-pocket costs for the medical treatment and the trip, including costs for a travel companion to come along. What’s confusing to many employees, who may never have heeded doctoring or rarely leave their hometown is that employees who elect to schedule hip or knee surgery closer to home that don’t take advantage of the new network arrangement, could be held financially responsible for the normal health insurance deductibles and co-payments. Often, that can amount to several thousand dollars.
In most of these situations, the employee or plan dependent gets a pass if there is some valid health reason why they can’t travel for the program, but the savings might be higher than the cost of a specially equipped air ambulance to safely transport them to the network provider. Boeing has a similar program with Cleveland Clinic, as do many other employers these days.
What the media is just learning has been ongoing since 1994.
Recently featured as big news thorough paid press releases, MedCityNews covered corporate-sponsored medical tourism and pay reform as news. This has been our primary business activity through our Mercury Health Travel vertical for almost twenty years. Back then, we didn’t have a name like medical tourism to describe it. It’s good to see these kinds of changes in store for B2B marketing in health care. Its time has come.
With domestic medical tourism, employers are buying value, faster access to care and better outcomes.
They are not saving big bucks on these programs. Building a network, vetting the providers, and building the relationship outside the TPA has a huge up-front sunk cost. If the program won’t make ROI in the first three years, there’s a lot to defend to the Board of Directors and the accountants. But, once the ROI is achieved, the program generally has fewer kinks and adding more cases of more types is easier after a good solid pilot program. The first one I did in 1997 was with Marriott Hotels. It didn’t make the media, we just saved money, time and improved outcomes.
Arkansas-based Wal-Mart Stores Inc., with 2.2 million employees in the United States, including 6,000 in Greater Memphis, launched a similar program last year for heart, spine and transplant surgeries, expanding a transplant tie with the Mayo Clinic since 1996. North Carolina-based Lowe’s, with about 245,000 employees, has offered trips to the Cleveland Clinic for heart surgeries since 2010. Companies won’t divulge numbers and in many cases, Mercury Health Travel is bound by confidentiality provisions of our contracts (as are the providers) from revealing our client list. Why? Because they don’t want the media swarm and the hassle factor from those who would philosophically oppose the program. Furthermore, they don’t want the TPAs to have access to the confidential rates that we mediated between the parties, because they know that those rates will be posted all over the internet in a matter of an hour.
Corporate medical tourism procurement deals are out there – not all of them good
At Mercury Advisory Group, we’ve lost or declined a few deals because the procurement officers didn’t understand how the system worked and thought this was a one off business of “need a hip surgery, call for a bid.” Nothing could be further from reality. Frankly, let those customers go down the road to some other vendor. As CEO, I don’t want them as customers.
Unethical buyers and buyers representatives
In one recent deal, a fairly large employee benefits consultancy who will remain nameless had us respond with lightening speed to find a North Carolina corporate executive a life-saving experimental care solution. We got everything arranged in two days and they renegged on our fee and my compassionate override and then did an end run on us with the provider. As a result, going forward, any company that calls us who works with that benefits broker, whom I will call “LC”, is not welcome at Mercury Health Travel at any price. Get LC to do it for you. Medical tourism is a small world at this level. All our competitive rivals know about this case. LC is in a tough position screwing the largest player out there. It takes me a fraction of a second to call all five of my industry rivals and warn them. I have their cell phone numbers on speed dial.
Illegal arrangements and unfair competition
In another potential deal, the procurement company for a large American manufacturer was based in India and Ohio. They wasted hours of my time educating them. Then they had their procurement company call us and even though we told them it was illegal to accept commissions from healthcare providers, they wanted us to do the work for their 26,000 US employees and retirees, and work off commissions from the providers instead of paying our per-member-per month fees. I said “NO”. We can’t work under arrangements that are in violation of the Stark Law, the Federal Anti-kickback law, several state self referral laws, the fee splitting prohibitions, and actually raises the price of healthcare by sometimes as much as 6-20% more than that which it needs to cost. Again, take it to our competitors. If we find out one of them did it, we are duty bound to blow the whistle on them and split the civil monetary penalty fees with the government. Bring it! And in fact, we should blow the whistle because it not only negatively affects the consumer, it also is a form of unfair competition for those of us who remain compliant with the law.
From where I sit as CEO of both the consulting firm that does the mediation on network development and rates, and a firm that for 30 years has advised medical providers on how to contract with third party payers, it’s all good. For the providers that are early adopters and create a value-laden program, good infrastructure, and exceptional service and branding, there’s opportunity for us to continue helping them build their product to compete with the programs in place from Pacific Business Group on Health, and the big box providers (Johns Hopkins, Cleveland Clinic, Mayo, etc.) For the employers, Mercury Advisory Group finds opportunities in assisting employers to coordinate care, negotiate fair pricing, and manage logistics with the providers we know are ready. There’s value to an employer to make the right choice from the start and not start with one provider and disrupt because the provider isn’t ready to serve.
Sending patients out of town to selected medical centers poses a huge threat to small community hospitals. For hospitals that claim to compete by having a center of excellence strategy – they may have to start defending that definition. Excellence is in the statistics, the outcomes, and in the mind of the B2B buyer and the consumer, not the hospital selling the Center of Excellence motto. If they wait too long, they may be shut out of the game altogether when the market share boundary lines are redrawn. Some argue that giving a company’s employees access to high-quality medical centers, especially workers in rural areas, is a bigger motivation that can force non-travelers to expand their horizons and get on a plane or drive down the road further than they would have traveled in the past.
Local providers argue that B2B healthcare buyers will see the potential savings is reduction in infections, complications, revisions, and that local people can come back to work sooner, etcetera if they remain in the local market for care. That’s just ignorance talking. The statistics we see show no difference in these outcomes.
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