LITTLE ROCK, Ark. (AP) — Wal-Mart Stores Inc. said Thursday it will add its Arkansas employees to a state effort aimed at lowering health care costs by changing the way private insurers and Medicaid pay for services, and it committed $670,000 to create a tracking system that would measure the initiative's success.
The world's largest retailer announced that it would participate in the state's payment improvement initiative, which moves away from a fee-for-service model to one where insurers pay for "episodes" of care rather than each individual treatment.
The Bentonville-based retailer said its 57,000 employees in the state will participate. Besides paying for the tracking program, the company also will help distribute information about the payments reforms and will serve on an employer advisory council for the state.
Officials with the company said they believed Wal-Mart and other private companies would save money with the payment reforms and that the program aligns with its discount philosophy.
"We believe if we can apply that mindset of saving people money so they can live better to the health care system, then we will all come out ahead," Sally Welborn, Wal-Mart's senior vice president of benefits, said at a news conference at the state Capitol.
Welborn said Wal-Mart, which self-insures its health program, has not estimated how much money it hoped to save in health care costs by joining the payment initiative.
"The goal is for the average Arkansan, and in particular the patients that are administered through Wal-Mart's plans, that we would see better quality care and lower costs over time," she said.
Gov. Mike Beebe and state health officials called the move an important step in its plan, billed as the first in the nation of its kind to change the way health care pays for services.
"The old way of paying for health care is unsustainable," Beebe said. "The old fee for service model is unsustainable."
The state began rolling out the payment reforms in July, focusing on five treatment areas, and plans to add five more to the program in April. The state partnered with Arkansas Blue Cross and Blue Shield and QualChoice of Arkansas on the initiative. Arkansas Blue Cross and Blue Shield administers Wal-Mart's health insurance claims.
The Department of Human Services projected that the state's Medicaid program would save $15 million next year because of the changes to the way the program pays for services. The state has also asked the federal government for permission to add Medicare to the health care initiative.