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To cut health costs, Lowe's provides free surgery at Cleveland Clinic

For months, the health care reform debate raged in Washington, DC. Then in March, Congress passed the controversial bill. At the same time, officials at Lowe's headquarters in Mooresville were putting the finishing touches on a new employee benefit. Workers who need heart surgery now have the chance to fly across the country to have their procedure performed without paying any out-of-pocket costs. For Michael St. Clair, it was huge news. For the last three years, he knew the valves in his heart were starting to fail. So twice a year, he underwent a test known as an echocardiogram. A test last year showed his aortic valve was leaking more than it had in the past. Then in February, St. Clair's doctors told the 58-year-old he'd need surgery. He had insurance through his job selling appliances at a Lowe's store in Roanoke, Virginia. But his Blue Cross Blue Shield policy would cover only 75% of what he learned would be a very big bill. "They gave me a range from anywhere from $172,000 to $306,000," St. Clair says. "And oh, that just floored me right there." So St. Clair considered everything. He thought about raiding his 401K and selling a home that's been in his family for 50 years. He worried he'd have to delay the surgery until he could get the money lined up. Then a coworker called, asking if St. Clair had heard about a new agreement between Lowe's and Cleveland Clinic. St. Clair quickly went looking for details. Lowe's was looking to cut down on expensive follow-up procedures for its employees with heart problems. In exchange for access to Lowe's 220,000 employees, Cleveland Clinic agreed to some reduced rates - similar to agreements hospitals have with insurance companies. And here's the kicker: For Lowe's employees willing to have their heart surgeries done in Cleveland, the company would pay all costs associated with the surgery. That includes airfare, a hotel room and food. St. Clair couldn't believe it. "It was like a dream come true," he says. "This was just unheard of. And it took maybe a few days to kind of sink in, that I would not have to pay anything." Mark Hall, a professor of law and public health at Wake Forest, says it's a dramatic move. "It reflects what we've been hearing about in the discussion about health care reform, that there are places in the country that are able to deliver high quality care for less than most medical centers." Cleveland Clinic has ranked as one of the most efficient hospitals in the country. Its doctors are salaried. Administrators say that helps keep patient costs down because doctors don't get paid according to the number of procedures or tests they perform. Meanwhile, a study conducted by the Health Research Institute at PricewaterhouseCoopers found that $210 billion gets wasted every year in the US on unnecessary medical tests. The executive at Lowe's who reached out to Cleveland Clinic is Bob Ihrie. "Well, I think one of our objectives was to disrupt the health care system a little bit," Ihrie says. "And make sure that people knew that the competition is what we were looking for, and that it is not just local." And Cleveland Clinic wants to help foster that competition. Michael McMillan is an executive there who helped negotiate the deal with Lowe's. He's also working on similar deals with several other big companies. "Having providers, physicians and hospitals, compete on delivering the best outcome for the patient is exactly where US health care needs to go," McMillan says. "And exactly the next evolution in the health reform process." But the idea has its skeptics. Thomas Ricketts teaches global public health courses at UNC-Chapel Hill. He says those overseeing the Lowe's program have one big challenge: Making it actually work. Ricketts remembers when traveling to other countries for medical care was once the hot new trend in health care. But that hasn't panned out. And Ricketts isn't convinced criss-crossing the country for a heart surgery here or a cancer treatment there, will lead to better patient care. "The travel, and the coordination of care, really the need for follow-up care of multiple practitioners dealing with multiple problems of complex patients is really something that is a local solution," Ricketts says. But Ricketts says the effect such a program will have on competition amongst caregivers, should not be underestimated. He says local hospitals will have to react to stay competitive. In Charlotte, Doctors at the Sanger Heart and Vascular Institute certainly took note of the Lowe's announcement. Sanger is the closest heart clinic to Lowe's headquarters and the 3,000 people who work there. Paul Colavita is the clinic's president. "We used to think that our competitors were local," he says. "We had to compete against Presbyterian, Duke or Wake Forest or Asheville. And now our competition is the Cleveland Clinic. They changed the game for us and we're ready to play." Colavita says he's not worried. He doesn't think patients will be in a hurry to travel long distances to undergo complex procedures, no matter what the financial incentive. "It's comfort, it's being able to sleep in your own bed. It's coming to a doctor you trust, a doctor you know, a doctor who's gonna be there for you when you're finished. I think people who get their cars fixed they just don't take it to (anyone) - they have their guy." All of this is moot unless deals like Lowe's become more widespread. Lowe's can negotiate such a deal because it's self-insured. Hall, at Wake Forest, estimates only about 15 percent of US workers are employed by companies that could enter into similar agreements. He doesn't think that's a big enough number to bring down health care costs. But if insurance companies get involved, then it's a different story. Brad Wilson, the CEO of Blue Cross Blue Shield of North Carolina, says his company is watching to see if the Lowe's program does in fact save money. "And should we conclude that it does, then we will move forward appropriately to make that offering available. I think what you've seen Lowe's just do is going to be replicated across the United States more in the future rather than less," Wilson says. As for St. Clair, he's continuing to mend. He underwent surgery in Cleveland on April 22. He returned to Virginia a week later. He says doctors have told him he'll be back selling appliances for Lowe's next month. And he'll do so without a big hospital bill hanging over his head. Take a WFAE News Poll: Would you travel cross-country for a major surgery if it meant paying no out-of-pocket costs? Answer here.