From Bloomberg.com: “Peabody Pays Mayo Clinic Prices to Save on Health-Care Costs.” Excerpt:
Ferguson’s wife, Shanna, had her colon removed last year because of chronic inflammatory disease. Foundation sent her 700 miles away to the top-ranked Mayo Clinic in Rochester, Minnesota. The company covered the $85,000 bill for the operation and follow-up reconstructive surgery and even paid for Ken’s motel.“I was at the best place with the best doctors possible,” said Shanna, 50. “And we saved money.”
So did Foundation. The coal producer says it has found an unconventional way to cut health costs: Seek out the nation’s best care and give workers incentives to use it. About two-thirds of operations have proven to be cheaper at better-rated hospitals out of state. Even when the price was higher, the Linthicum Heights, Maryland-based company saved money by reducing misdiagnoses, complications and repeat procedures.
Foundation’s experiment in Wyoming could be a model for politicians and insurers seeking to curb the growth in U.S. health-care spending, now $2.2 trillion a year, said Mark McClellan, who served under President George W. Bush as head of Medicare and the Food and Drug Administration.
More on this approach from the Connecticut Employment Law Blog here. See also this link to a book by Michael E. Porter & Elizabeth Olmsted Teisberg entitled “Redefining Health Care” which discusses the approach.