Wal-Mart to pay for heart and spine surgery for U.S. employees

* Wal-Mart lines up 6 major health centers for procedures

* Employees and dependents enrolled in plans eligible

* Bundled pricing from suppliers should lower Wal-Mart'scosts

* Wal-Mart has covered transplants since 1996 By Jessica Wohl

CHICAGO, Oct 11 (Reuters) - Wal-Mart Stores Inc isoffering its U.S. employees and their families free heart andspine surgeries at six major health centers at no cost to theretailer's workers, as it tries to find better ways to covercostly, complicated procedures.

Starting in January, workers and dependents enrolled inWal-Mart's medical plans will receive free consultations andcare for certain heart and spinal procedures along with travel,lodging and food for the patient and a caregiver.

The six healthcare organizations include those that have wonhigh marks in terms of patient care and keeping unnecessarycosts at bay: Cleveland Clinic in Cleveland, Ohio; GeisingerMedical Center in Danville, Pennsylvania; Mayo Clinic sites inMinnesota, Arizona and Florida; Mercy Hospital Springfield inSpringfield, Missouri; Scott & White Memorial Hospital inTemple, Texas; and Virginia Mason Medical Center in Seattle,Washington.

Wal-Mart is the world's largest retailer and the singlebiggest U.S. employer outside of the government, with about 1.4million workers. Any changes to its healthcare coverage can havea ripple effect. The company shook up a different part of thehealthcare industry when its Walmart chain started sellingcertain prescription medications for $4 back in 2006, a movesoon followed by other retailers.

Wal-Mart anticipates that the program will help reduce itscosts as it receives bundled pricing from the healthcareorganizations, but it cannot project the amount it might save.

Wal-Mart says that it pays about 60 percent of total cost ofhealthcare for employees on its healthcare plans, includingout-of-pocket and premium expenses. For workers, including thosewith low-paying jobs, costs will now be reduced as they will nolonger pay for such procedures.

"It's a growing trend and an important new aspect ofemployers' ability to manage quality and improve their valueproposition," said Michael McMillan, executive director ofmarket and network services at Cleveland Clinic. "We see moreand more large employers asking about this kind of approach."

Cleveland Clinic doctors are not paid per-procedure, so theyhave no financial incentive to operate and may find other lessinvasive, less expensive ways to treat patients, McMillan added.

The deals with the six "Centers of Excellence," disclosed onThursday, should lower healthcare costs and may be copied byother companies looking to control medical spending.

"I do think that this is our future and they're just aheadof the game," said Helen Darling, president and chief executiveof National Business Group on Health, a nonprofit membershiporganization of 346 employers including Wal-Mart.

Wal-Mart began covering transplants with the Mayo Clinic in1996 and that coverage continues, Wal-Mart said.


Wal-Mart's announcement marks the first time that a retailerhas offered a national program for coverage of heart, spine andtransplant surgery, though some other companies already offersimilar programs on a smaller scale.

Cleveland Clinic said it set up a heart surgery program in2010 for employees of home improvement retailer Lowe's Cos Inc, which has since expanded to include other areas, andrecently reached a similar arrangement with Boeing Co .

While Cleveland's McMillan declined to say how manyprocedures have been done under such agreements, the number ofLowe's employees taking advantage of the service has"significantly exceeded" expectations, with patients coming infrom 23 states.

He expects other companies to reach similar agreements.

"We call it the triple win," said McMillan. "It's a boost inquality, it's an improvement in value and it's no cost out ofpocket for employees, so we think it is a great opportunity."

Direct-to-employer service arrangements such as theseaccounted for about $1 million of Cleveland Clinic's revenue in2011, a small fraction of its overall revenue of $5.83 billion.

Not all of Wal-Mart's U.S. employees sign up for itshealthcare plans, and part-time employees are not eligible forcoverage until they work for the chain for one year.

There are 1.1 million people, including workers' familymembers, covered by Wal-Mart healthcare plans in the UnitedStates, the company said. The lowest-priced coverage costs $17per pay period, plus $10 to cover children.

Wal-Mart also said that it is adding Aetna Inc andUnitedHealth Group Inc's UnitedHealthcare asadministrators for its medical plans. It already has Blue CrossBlue Shield administer its programs, and now one of the threecompanies will handle the process, depending on the location ofa particular worker.

Cleveland Clinic, Geisinger Medical Center, Scott & WhiteMemorial Hospital and Virginia Mason Medical Center will offercardiac procedures including open heart surgery for coronaryartery bypass grafting, heart valve repair, closures of heartdefects, and thoracic and aortic aneurysm repair.

Mercy Hospital Springfield, Scott & White Memorial Hospitaland Virginia Mason Medical Center will perform spine proceduressuch as cervical and lumbar spinal fusion, total diskarthroplasty and spine surgery revisions and other complex spinesurgeries.

(Editing by Michele Gershberg and Matthew Lewis)


Messaging: jessica.wohl.thomsonreuters.com@reuters.net))