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Steve Chiotakis: Lowe’s is partnering with one of the world’s best cardiac hospitals.
The home improvement chain is offering discount heart surgery to its employees. Which leads to this question: Can bulk
purchasing really work for specialized health care? From the Marketplace Health Desk at WHYY in Philadelphia,
Gregory Warner reports.

Gregory Warner: According to the deal announced this week, if you’re a Lowe’s employee anywhere in the country and you need a bypass or a heart valve replacement, you can now get your surgery at the Cleveland Clinic.

Lowe’s bargained with Cleveland Clinic much like they’d do with suppliers of wood chips or paint. In this case, Lowe’s said, we’ll let you treat our patients:

Martin Gaynor: And you’ll give us a discount.

Martin Gaynor at Carnegie Melon University says more deals like this could drive down prices at lots of hospitals.

Gaynor: All those hospitals now don’t just have to compete with other hospitals that are previously in the network. They have to compete with the Cleveland Clinic.

Bob Ihrie is in charge of benefit plans at Lowe’s. He says the company self-insures about 100,000 employees and their dependents. Sending them to the Cleveland Clinic not only costs less, he expects the doctors to do less. Cleveland Clinic puts doctors on salary instead of paying them per procedure, so doctors don’t have the same incentives to rush to the operating table.

Bob Ihrie: If they were to decide that surgery was not what they would do, then they will recommend that back to the patient.

If the Cleveland experiment works, he says the company might try to negotiate with other hospitals for back pain, a frequent complaint by Lowe’s employees.

In Philadelphia, I’m Gregory Warner for Marketplace.