NCPA’s John Goodman on Wal-Mart and Other Employers Opting for Medical Tourism

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In Priceless, I hazarded a guess that employers could cut the cost of hospital care in half by engaging in medical tourism. It’s a variation on what is sometimes called “value-based purchasing” or “reference pricing.” In its pure form, the employer picks a low-cost, high quality facility and covers all costs there. If the employee chooses another hospital, the employee must pay the full extra cost of the more expensive choice. In Priceless, I argued that to take full advantage of the opportunities available, the patients must be willing to travel. Several large companies are already trying the idea out. As Jim Landers explains: Wal-Mart Stores Inc., the nation’s largest employer, will jump into medical tourism next year by offering insured employees no-cost heart and spine surgeries at Scott & White Memorial [in Temple, Texas] and seven other hospitals across the country. By using a hospital in the new narrow network, patients could save as much as $5,000 or more The hospitals in Wal-Mart’s network including the Cleveland Clinic and Geisinger Medical Center in Danville, Pa. have gained national reputations for both quality and value. Physicians and surgeons work under financial incentives rewarding improved patient outcomes. To continue reading click here.

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