Denver, CO — What if I told you one of the benefits of working at Lowes is free surgery at prestigious hospitals? How could a major employer afford such a significant benefit? It’s all in the contracting.

Lowes and other large employers identify the key surgeries they want to cover and then negotiate agreements that look a lot like accountable care: one flat rate per procedure that includes all the treatment within a certain time frame — surgery, physical therapy and care for complications that might arise.

Employees can choose to use their local surgeons and pay typical out of pockets. Or, travel to these identified centers of excellence for an all-services-paid surgery. The bundled price saves money for both employee and employer plus gives hospitals access to to a new patient base.

The Pacific Business Group on Health is one of the companies that negotiates these agreements. Their associate director Olivia Ross told NPR her team is able to negotiate rates that are 20 to 30 percent below what the companies used to pay for the procedures.

Those numbers have garnered the interest of private and public payers alike. Medicare is now trying the destination healthcare approach for hip and knee replacements in 67 metropolitan areas, including New York, Miami and Denver. They’re reportedly saving $4,000 per orthopedic patient.

Why It Matters

  • For our colleagues who work on surgical products, there’s a whole world of new possibilities here. Accountable care models aren’t just happening at the typical payer level – they’re happening in the micro economies of individual employer contracts. That could point to a need for all kinds of new services, support and contracts with big rooves.
  • Routine surgeries have become very decentralized in hospitals and clinics around the country. Success with models like Lowes’ could lead to the number of locations for care becoming much more compressed – making relationships with centers of excellence, hospital directors of pharmacy, and more very critical.
  • More hospitals are becoming destination hospitals, serving patients from beyond their immediate geography. That could point to new communication challenges and gaps in care that device and pharma providers can help bridge.

Hear more about the Lowes program from Kaiser Health News and NPR.


About the Author:

As Managing Director of Innovation for Syneos Health Communications, Leigh is responsible for shaping the company’s perspective on the next era of healthcare marketing. Through thought leadership, strategic innovation workshops and new products and capabilities, Leigh focuses on identifying marketing approaches that will fuel that new era and generate significant growth for clients. Leigh has worked with Fortune 1000 companies to craft their digital, mobile, social and CRM strategies for over 17 years. She’s worked for category-leading agencies in retail, public affairs, B2B technology, and higher education. Prior to moving to Syneos Health Communications, she had several leadership roles at one of our agencies, GSW. There, she founded an innovation practice fueled by the zeitgeist and spearheaded digital and innovation thinking across the business. Leigh has taken a special interest in complex healthcare products that can change lives in meaningful ways. She was recently a strategic lead on the 3rd largest launch in pharmaceutical history: Tecfidera. Before that she had keys roles with Eli Lilly Oncology, Abbott Nutrition, Amgen Cardiovascular, and Eli Lilly Diabetes. A critical part of Leigh’s work is trends and new ideas. Every year, she convenes a group of trend watchers from across our global network to identify the shifts most critical to healthcare marketers. Leigh is a sought-after writer and speaker. Recognized as one of the most inspiring people in the pharmaceutical industry by PharmaVoice, Leigh also was recognized as a Rising Star by the Healthcare Businesswomen's Association (HBA) for her overt passion, industry thought leadership and significant contributions in new business, strategy and mentoring.