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Months have passed since the leaders of Amazon, Berkshire Hathaway and JPMorgan Chase announced they were forming a company that will buy high-quality health care at a lower cost. And they still haven’t picked a person to lead that effort.

That’s an indicator of how tough it will be to fix the health care system, according to Sally Welborn, a consultant who was previously the senior vice president of global benefits for Walmart Stores, Inc. Welborn spoke at The Alliance Annual Seminar on May 17,2018 at Monona Terrace in Madison.

“I think they’re realizing about now that it’s hard,” Welborn said about the three high-profile companies. “It’s really hard.”

No ‘White Knights’

Welborn said employers cannot rely on “white knights” to come along fixing health care for them. Instead, they will need to find ways to tackle problems that include:

  • U.S. health care costs that are at least twice as high as in other first-world countries and rising faster here than in other countries. Those high costs handicap U.S. companies in world markets.
  • Quality that is “unforgivably poor” despite its high price tag. More than 250,000 people still die every year due to preventable medical errors. Just over half of doctors adhere to evidence-based guidelines. And unnecessary care accounts for an estimated one-third of costs.

Two Ideas from Walmart

Even Walmart lacked the market power needed for some changes, in part because Walmart employees are located in cities spread across the country.

Yet Walmart was still able to make changes that guide employees to better care. Examples include:

  • Establishing centers of excellence to guide employees to quality care. Initially, Walmart focused on identifying the “best” providers nationwide for spine and heart surgery and then contracting directly with them for care. These providers had to prove that surgeries were performed well, but they also had to demonstrate that they focused on doing only surgeries that are medically necessary. Plan enrollees who used these providers had 100 percent of cost covered for the surgery and related travel expenses. The biggest surprise from the program was that one-third of patients were told they didn’t need surgery at that time. Less than 2 percent of those patients later required surgery.
  • Identifying integrated medical centers that provide care that is aligned with evidence-based guidelines. Members who enrolled in health plans that used these accountable care organizations (ACOs) could get all their care from these providers. “We were getting great success from that,” Welborn said.

Try Fixing Health Care Together

“One of the biggest things Walmart can do is try things,” Welborn said. But smaller employers can use organizations like The Alliance to work together to pursue the same types of changes in regional markets.

“Employers getting together and working together is probably the only thing employers can do to make a difference,” Welborn said.

Welborn cited The Leapfrog Group as another employer-focused group that is driving change. The Leapfrog Group Hospital Survey collects information about patient safety practices. Nationally, almost 2,000 hospitals participate. But in Wisconsin, only seven of 127 hospitals participate. In Madison, only Meriter Hospital submits data.

“So how in the world are you going to know where the best hospitals are if you’re in Madison?” Welborn asked. Welborn, who is a member of The Leapfrog Group Board of Directors, urged employers to include Leapfrog participation in their purchasing decisions.

Leapfrog also issues Hospital Safety Grades based on publicly available data. Sharing that information with employees is also important, Welborn said. The Alliance posts grades for in-network hospitals on its website.

Educate Employees

Welborn said patients need information to make wise decisions. Employers can share that information to reduce unnecessary care.

For example, many women think that pelvic exams and Pap tests are both necessary on an ongoing basis. But while research shows Pap tests are important for detecting cervical cancer, research also indicates that pelvic exams are often unnecessary.

“As smaller employers, you have one advantage that bigger employers don’t have,” Welborn said. “The ability to talk to your employees directly, face-to-face, and give them this kind of information is so incredibly valuable.”

More Steps for Employers

Welborn also had other suggestions for employers:

  • Partner with other employers. For example, Walmart worked with other large employers to create its centers of excellence program.
  • Use plan design to encourage people to do the right thing.
  • Find intrinsic motivators that will encourage employees to change their lives by adopting better lifestyle practices. Wellness programs that use different premium levels to attempt to persuade employees to change don’t work, Welborn said.
  • Look for vendor partners who are creating better solutions for employees. Examples include second opinion services that help employees find the right care for serious conditions.
  • Use direct contracting to work with organizations that offer bundles for care.
  • Manage chronic conditions with the help of a vendor.
  • Offer telemedicine to increase access to care.
  • Use a vendor to help manage specialty drugs to make sure these very expensive medications are the right choice for the patients’ condition.
  • Check out Health Rosetta and read The CEO’s Guide to Restoring the American Dream by Health Rosetta CEO Dave Chase to learn about effective employer tactics.

Eliminate the ‘Worst Dollar Spent’

Employers can see a significant difference in health costs – and employee health – simply by eliminating unnecessary care. Examples include screening tests that shouldn’t be done or antibiotics that shouldn’t be prescribed.

“If we just didn’t have to pay for the worst dollar we spent, that should never have been spent,” Welborn said, employers and employees would both benefit.


Benefit Plan Design Better Health Care Consumer


Events by the Alliance


Benefit Plan Design Better Health Care Consumer


Events by the Alliance