Cleveland Clinic negotiating healthcare bundled payments deal with Boeing

Two years ago, Cleveland Clinic and home-improvement retailer Lowe’s entered into an innovative healthcare deal in which Clinic doctors perform heart surgeries on Lowe’s employees for a bundled payment.

Now, the Clinic is discussing a similar deal with aircraft manufacturer and defense contractor Boeing, Clinic CEO Toby Cosgrove said Friday morning in a speech to the Harvard Business School Club of Cleveland.

However, details of the Clinic’s expected healthcare alliance with Boeing are sketchy at this point. It’s unclear what type of care the alliance will include, but the guess here is that it’s also for heart care.


“I can confirm that we’re in discussions with them about a similar arrangement, but can’t release any specific details yet,” said Eileen Sheil, a spokeswoman with the Clinic.

A Boeing spokesman declined comment.

In addition to Lowe’s, the Clinic has entered into bundled payment healthcare deals with Kohl’s, Rich Products Corporation and Alliance Oil, Cosgrove said.

“We’ve had significant success with this and we’ve seen significant interest” from potential partners, he said. The Clinic has about a dozen more similar bundled payment deals “in queue,” including Boeing, Cosgrove said.

In March 2010, Lowe’s and the Clinic announced their unusual deal. Lowe’s waives employees’ usual $500 deductible and other out-of-pocket costs and pays for their airfare, hotel and living expenses while in Cleveland, Hospital Review reported. Lowe’s employees seeking heart surgery aren’t required to get it from Cleveland Clinic.

For the Clinic, the deal was an opportunity to extend its out-of-state patient base, something that will become increasingly important to the health system over the coming years as Northeast Ohio’s population slides.

Bundled payments are seen as one potential way to cut healthcare costs and stand in contrast to the typical fee-for-service model in which doctors get paid more for providing the care.

Under bundled payments, doctors, hospitals and other health providers share one fee for treating all aspects of a procedure such as a hip replacement or a chronic disease such as diabetes. The approach is intended to encourage health providers to work together to eliminate unnecessary care and improve quality, according to the Rand Corporation.

In response to a question from an audience member about medical tourism, Cosgrove shared another tidbit: The Crown Prince of Saudi Arabia checked in to the Clinic last night. Cosgrove joked that the information was a secret, but the Associated Press reported it this morning.

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