What did they do?
Lowe’s contracted directly with the Cleveland Clinic for employee heart surgeries. Lowe’s negotiated a flat price for each surgery that includes travel cost and after-surgery care. Lowe’s controls the financial incentives for cost and quality and thus only pays for heart surgery supply that is of high quality. Lowe’s employees pay no out-of-pocket costs. Cleveland Clinic is able to innovate and drive efficiencies that make Lowe’s costs lower but increase Cleveland Clinic’s profitability.
“After three or four years of trying to deal with health plans who had no interest in being very innovative, we just gave up and decided we’re going to do it for ourselves,” said Robert Ihrie Jr., Lowe’s Senior VP of Compensation and Benefits