This covers around 250,000 employees and dependents and the coverage is for orthopedic and cardiac procedures and includes correcting previous knee replacements.  If anyone in the group has a DePuy knee or hip this might be really good news if it is one of the recalled devices.  Pepsi will be footing the bill entirely for this with covering the cost and the deductible.  This is the second such agreement of this type that I am familiar with and Lowes was the first to negotiate their contract with the Cleveland Clinic.  image

Johns Hopkins hopes to build on more relationships and contracts as such.  Pepsi is self funded for their insurance so it works for them.  The article also makes mention that this will make it easier to control cost as in Maryland as the state sets the rates, that sound it would be good for any state to do and follow that example.  Hospitals such as Johns Hopkins who are heavily involved in research are very active and look for potential contracts and partners all the time, especially in their drug discovery areas. My blog sponsor earlier this year, SNNWire had a nice interview with Johns Hopkins at the AdvaMed conference and you can listen to the interview with Helen Montag and she states Hopkins Tech is open for business and this includes more than just Health IT. 

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Many of the hospitals that have drug and research patents do attend many conferences looking for small biotech companies to work with as well, and SNNWire earlier this year also had a nice interview with Boston Children’s Hospital too who are anxiously reaching out to partner.  In the next copy of the magazine, Micro-Cap Review there will be some additional coverage of some of the medical device and drug companies you may not have seen before as well and the current copy deal with mining and is located under my sponsor and advertising column on the right. 

So the long and short of this is that many big companies might be following the footsteps of Pepsi if they are self insured as it appears to be a win-win with having the procedures done at a top notch hospital and at the same time keep costs down or at least know ahead of time what the actual cost will be.  BD 

PepsiCo has signed a deal that allows employees and dependents across the nation to get certain surgeries at Baltimore's Johns Hopkins Hospital - a cutting-edge arrangement that could grow in popularity as companies look to provide better health care and contain costs.

The world's second-largest soda company will pay for workers and their dependents - about 250,000 people - to travel to Baltimore for cardiac or complex joint surgeries, such as correcting problems in a previous knee replacement. PepsiCo will also cover the deductible and coinsurance for the procedures.

Hopkins in turn will charge Pepsi a set rate for the surgery, rather than separate fees for physician charges, preoperative testing and other related services. The arrangement was announced last week.

Such a health model is rare in the industry, but more companies may consider it as they try to simplify a system where the cost and quality of a procedure can vary widely in some states. Hospital costs in Maryland are more predictable because the state sets rates.


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