How Walmart is taking on the cost of employee health care with ‘innovation’

Affordability remains a huge problem with employer-based health coverage, but one corporation tackled that issue by changing the way its employees receive care.

“We are focusing on innovation on how we can provide benefits to our workforce,” said Adam Stavisky, Walmart senior vice president, U.S. benefits. He spoke during a panel discussion on the future of employer-based coverage at America’s Health Insurance Plans’ 2023 Medicare, Medicaid, Duals & Commercial Markets Forum.

In 2013, Walmart began offering its employees access to its Centers of Excellence, in which employees can go to designated health-care facilities for treatment of conditions such as back pain, infertility, weight loss surgery, hip and knee replacement or cancer. Many conditions are covered at no cost to the employee with most medical plans.

"...If we look at innovation, it would put employers in a position to help improve health care.”Adam Stavisky, Walmart senior vice president, U.S. benefits

Stavisky said said Walmart chose the facilities for its Centers for Excellence program based on their expertise and quality in treating specific health issues. The program has been a cost-saver for the company while providing workers with care.

“Back surgeries, for example – we’ve seen a number of our employees who were able to get high-quality treatment for their back issues without having to undergo surgery,” he said.

Walmart now is looking to move the Centers of Excellence program to local communities where it has stores instead of funneling workers to large medical centers in urban hubs.

“We are looking at how to identify physicians in our communities who are performing more consistently, we are turning to telehealth from ‘simple sick’ to primary care, making intelligent referrals to specialists in the local communities,” Stavisky said. “We are seeing reductions in low-value care, unnecessary caesarean sections, lower emergency department use. We are also seeing an uptick in pharmacy spending, which is a good thing if it means we are getting people to take their medications.”

Stavinsky said Walmart has “a national strategy to address health care issues but we have a nationwide deployment.”

“We need to change or rebalance what’s most important – it’s always been ‘Pick health plan A or B,’ so many employers look to see how many doctors are in one plan or another. But if we look at innovation, it would put employers in a position to help improve health care.”

Not everyone is happy with their coverage

More than 183 million Americans – about half the nation’s population - receive health coverage through an employer. But not everyone is happy with that coverage, and affordability is the main reason.

“I don’t think it’s any secret that people who have employer-sponsored coverage tend to like it,” said Marilyn Serafini, executive director of the health program at the Bipartisan Policy Center. “But let’s talk about some of the people for which it doesn’t work quite as well. There are some disparities here and the issues have to do with affordability and equity.”

Serafini said research has shown people who work for larger employers tend to find their coverage better than do people who are employed by small businesses. And higher-income workers are more likely than lesser-paid workers to believe their coverage is good.

“In a company, it doesn’t matter so much if you are higher income or lower income; it relates to the percentage of income that goes toward your premium,” she said. “People at the lower end of the income scale have a harder time with their health insurance.”

Serafini said that one-third of people with employer-based health insurance have annual deductibles of at least $2,000. “People can’t afford that,” she said.

“We’ve seen deductibles level off but they are still high for some people. For people who can’t afford those deductibles, we are seeing lower usage of health insurance.”

How to address the issue of high costs despite having coverage? Serafini had some suggestions.

“Working on prescription drug prices as a whole because that is one of the big drivers of cost. Another big driver of cost is inpatient hospital care, and that leads to another driver – competition.”

She cited what she called “the uber consolidation” of health care facilities as a factor in higher costs. “Did the government go too far in allowing so much consolidation? Can they pull back a bit so we don’t have so many monopoly areas? But that train already left the station. More than 60% of markets in the U.S. are considered highly concentrated. And the evidence shows that when you have so much concentration in a given area, prices go up.”

Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at Susan.Rupe@innfeedback.com. Follow her on Twitter @INNsusan.

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Susan Rupe is editor in chief, magazine, for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at susan.rupe@innfeedback.com.