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Originally published Thursday, October 11, 2012 at 6:42 AM

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Virginia Mason among top hospitals tapped by Walmart

Walmart has chosen Virginia Mason Medical Center in Seattle as one of six top-ranked hospital systems in the nation to deliver specialty care to its insured employees and family members. Others on the list include the Mayo Clinic and Cleveland Clinic.

Seattle Times health reporter

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I think the point is that VM is in the same league as Cleveland Clinic and the Mayo... MORE
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Virginia Mason Medical Center in Seattle is one of six top-ranked hospital systems in the nation designated by Walmart to deliver specialty care to employees and family members covered by its health-insurance plans.

In the sort of deal typically given only to corporate executives, Walmart, which has 1.4 million workers in the U.S., said Thursday it will cover 100 percent of expenses for specialty heart and spinal procedures and organ transplants at these centers, as well as travel, lodging and food, for insured "associates" and their caregivers.

The move comes as Walmart stores around the country have been hit by protests by "Making Change at Walmart" campaign. Dozens of workers walked off the job, demanding better wages, hours and more respect, according to news services. Company officials said all stores were open.

For Walmart, health care coverage has long been a contentious issue.

The company has been roundly criticized by worker advocates and some lawmakers for keeping employees in part-time positions where they don't qualify for company health insurance or paying them too little to afford premiums. A few years ago, Walmart expanded insurance coverage, but last year, citing rising medical costs, it substantially rolled back that expansion and raised premiums, according to The New York Times.

The new program, called "Centers of Excellence," is an attempt to rein in exceptional costs for these complex procedures.

It's not the first time a company or a public insurer has offered employees incentives to get care at medical centers seen as delivering good value in terms of quality and cost of care. But a move by Walmart, the largest private employer in the world, is likely to attract considerably more notice.

The other hospital systems named are Cleveland Clinic in Ohio, Geisinger Medical Center in Pennsylvania, the Mayo Clinic in Minnesota, Arizona and Florida, Mercy Hospital Springfield in Missouri and Scott & White Healthcare in Texas.

Walmart divvied up the care, designating Cleveland, Geisinger, Scott & White and Virginia Mason to do heart procedures such as bypass grafting, heart-valve replacement and repair, aneurysm repair, repair of heart defects and other complex heart procedures.

Virginia Mason, Mercy and Scott & White were designated to do spinal procedures such as cervical and lumbar spinal fusions, disk arthroplasty, spine-surgery revisions and other complex procedures.

Walmart began the program in 1996, sending insured employees who needed organ transplants to Mayo Clinic sites in three states. Mayo will continue to do transplants, the company said.

"We have identified six renowned health-care systems that meet the highest quality standards for heart, spine and transplant surgery," said Sally Welborn, senior vice president of global benefits for Walmart, in a statement Thursday. "Through these hospital systems, our associates will have no out-of-pocket expenses and a greater peace of mind knowing they are receiving exceptional care from a facility that specializes in the procedure they require."

Virginia Mason has become known for its enthusiastic application of the Toyota Production System and "lean" manufacturing principles to eliminate waste in hospital processes and improve quality and patient safety. The medical center has been recognized for hospital excellence by various rating groups, particularly for cardiac and gastrointestinal care.

Virginia Mason's senior vice president and chief financial officer, Sue Anderson, said the medical center shares Walmart's approach to value, which she defined as "high quality outcomes of care at a lower cost."

Anderson said Walmart looked at Virginia Mason's record of readmissions, surgical-site infections and patient satisfaction, among other criteria.

She said Walmart has seen "huge variation" in quality and cost of care around the country. "They see patients who they think really didn't get good care," Anderson said.

"I think where they think they're going to save money is around the reliability of the service," she said. When costs of a claim skyrocket beyond what's typical, "it's usually from complications."

Walmart's interest in Virginia Mason, she said, wasn't so much about securing a lower price for a particular procedure but in knowing "the patient's not going to get hospitalized three more times to clean it up."

Virginia Mason, a nonprofit, employs more than 5,300 people and includes a 336-bed acute-care hospital, and a primary and specialty care group practice of nearly 460 physicians. Benaroya Research Institute at Virginia Mason has been recognized for its autoimmune disease research.

Walmart said it is working with all the health-care systems named for its program to share best practices. "This is the first time a retailer has offered a comprehensive, nationwide program for heart, spine and transplant surgery," Walmart's Welborn said.

Cleveland Clinic President and CEO, Dr. Toby Cosgrove, said the program will focus on both patient outcomes and cost control. "Healthcare is in the midst of an unprecedented transformation and requires innovation to improve the way we deliver care to patients across the United States," he said in a statement.

Walmart did not disclose Thursday what percentage of its employees are covered by the company's medical plans. Anderson said the program is voluntary for insured employees, who can still choose to go to a different or closer medical center, paying deductibles and coinsurance as specified in their health plan, so it's not yet clear how many might opt for the new program, which goes into effect Jan. 1.

In general, Anderson said, employees and covered dependents will be sent to the closest one providing the care they need, but Walmart said it will consider case-by-case requests. To take advantage of the new program, patients must be healthy enough to travel, the company said. Walmart said it would also cover consultations for those complex conditions.

Walmart, headquartered in Bentonville, Ark., operates under different names in 27 countries with 2.2 million employees.

Carol M. Ostrom: 206-464-2249 or costrom@seattletimes.com. On Twitter @costrom.

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