The Cleveland Clinic has long been known as one of the nation's best hospitals for cardiac care. And it's no secret that home-improvement retailer Lowe's has been looking for a way to manage rising employee health care costs. Still, the two made waves when they announced in February that they'd be teaming up to offer heart surgery at no charge to Lowe's employees.
The three-year deal, which eliminates travel and out-of-pocket expenses for patients, is expected to draw nearly 125 Lowe's employees per year. But while this may be good news for cash-strapped heart patients, it also signals a trend that could seriously impact community hospitals.
These partnerships are attractive because they aim to improve the quality of and access to care while lowering costs. And for the hospitals involved, the opportunity to expand their reach just as the quality and efficiency equation is gaining national prominence is invaluable.
"The collaboration positions us well in an industry that is increasingly seeking value-driven models of health care delivery," says Michael McMillan, Cleveland Clinic's executive director of market and network services.
But Larry Boress, president and CEO of the Midwest Business Group on Health, believes these deals, while reducing initial cost barriers, fall short in addressing long-term health.
"You need to wrap support services around the patient to keep them taking and refilling their drugs, to motivate them to take care of their health," he says.
And if employer-hospital partnerships become the norm, there could be big consequences for community hospitals. Rob Sutton, partner at the health care management consulting firm, IMA Consulting, notes that if the nation's top 50 companies followed Lowe's lead, 15,000 cardiac surgeries per year would be siphoned away from community hospitals.
"Hospitals that perform few complex surgery cases per year, and rely on these high-margin surgeries to make up for losses in community-based services like obstetrics, will feel the greatest loss," he contends.
But with employers already managing costs through pharmacy relationships and discounted co-pays, the Lowe's-Cleveland Clinic deal seems to be a sign of things to come. Sutton says cost-management partnerships are inevitable, adding that community hospitals can prepare themselves by developing areas of expertise and affiliating with large, integrated delivery systems for disease management.