Carrum Health helping fight high-priced surgeries

August 31, 2017

PUBLISHED BY Chad Terhune

SOURCE LA Times

Retiree Leslie Robinson-Stone and her husband enjoyed a weeklong, all-expenses-paid trip to a luxury resort — all thanks to the county she worked for.

The couple also received more than a thousand dollars in spending money and a personal concierge, who attended to their every need. For Santa Barbara County, it was money well spent: Sending Robinson-Stone 250 miles away for knee replacement surgery near San Diego saved the government $30,000.

“The only difference between our two hospitals is one is expensive and the other is exorbitant,” said Andreas Pyper, assistant director of human resources for Santa Barbara County, referring to the local options.

After years of hospital industry consolidation, frustration with sky-high hospital bills and a lack of local competition is common to many employers and consumers across the country. Fed up with wildly different price tags for routine operations, some private employers are steering patients they insure to top-performing providers who offer bargain prices. Santa Barbara County, with about 4,000 employees, is among a handful of public entities to join them.

The county has saved nearly 50% on four surgery cases since starting its out-of-town program last year, officials said. The program is voluntary for covered employees.

At a Scripps Health hospital in the San Diego area, the county paid $61,600 for a spinal fusion surgery that would have cost more than twice as much locally. It avoided two other operations altogether after patients went outside the area for second opinions.

Typically, employers are seeking deals through “bundled payments” — in which one fixed price covers tests, physician fees and hospital charges. And if complications arise, providers are on the hook financially. Medicare began experimenting with this method during the Obama administration.

Santa Barbara County is among about 400 employers on the West Coast working with Carrum Health, a South San Francisco, Calif., start-up that negotiates bundled prices and chooses surgeons based on data on complications and readmissions.

“Not all surgeons are equal. We don’t want to give Scripps a blank check. That defeats the whole purpose,” said Sachin Jain, Carrum’s chief executive.

Santa Barbara officials try to persuade workers and their family members to participate in its program by waiving co-pays and deductibles. The county pays about $2,700 in travel costs and still comes out way ahead.

Read the full article in the LA Times here.