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Heart of Rock and Roll Domestic Medical Tourism Keeps Beating


The heart of rock and roll is still beating in musician Lou Reed, but it is domestic medical tourism that has kept him alive. Still looking frail, the legendary 71-year-old rocker said he is “bigger and stronger than ever” and is looking forward to performing again on stage during an appearance this summer in Cannes, France. The founder of The Velvet Underground – whose records chronicled the drug culture and seedy underbelly of New York – underwent liver transplant surgery at the clinic at Cleveland Clinic, in June.

“I would like to thank the Cleveland Clinic and all of you around the world who have lifted me with prayer and wishes of love,” Reed said on his website. “Your support has buoyed me forever and I am deeply grateful. I am also really up and strong, thanks to your spirit.”

The Cleveland Clinic has for years marketed its facilities to treat both domestic and international patients. Known for being one of the preeminent medical institutions in the world and ranked #4 in “Overall Best Hospitals” by US News World & Report, Cleveland Clinic has been a major medical tourism destination in the United States, welcoming thousands of patients, both national and international, for treatment and procedures each year.

Laurie Anderson, Reed’s wife, said her husband had the surgery in Cleveland instead of New York, where they live “because the hospitals here are completely dysfunctional.” A performing artist and songwriter herself, Anderson first disclosed the transplant in an interview with the Times of London newspaper, in which she said of the surgery, “It’s as serious as it gets. He was dying. You don’t get it for fun.”

Outsourced Care

“Fortunately we can outsource like corporations,” she said. “It’s medical tourism. The Cleveland Clinic is massive. They have the best results for heart, liver and kidney transplants. Whenever I get discouraged about how stupid technology is and how greedy and stupid Americans are, I go to the Cleveland

The founder of The Velvet Underground underwent liver transplant surgery at the clinic at Cleveland Clinic, in June.

Clinic because the people there are genuinely very kind and very smart.”

Reed, a member of the Rock and Roll Hall of Fame, called himself “a triumph of modern medicine, physics and chemistry.” His songs include “Walk on the Wild Side,” “Sweet Jane,” and “Heroin.” He overcame addiction after years of drug use and has suffered from hepatitis.

Anderson, who married Reed five years ago after they had been together for more than 15 years, said the impact of his sudden deterioration and the subsequent operation had left her drained.

“When you’ve been with someone for a long time, it’s almost like it’s happening to you because of the empathy between partners,” she said. “This is no longer an operation that is life threatening. They put it [the new liver] in immediately and it started to work immediately. Every week it gets better. I can imagine a world where you can get everything transplanted.”

Reed’s work, both with Velvet Underground and as a solo artist, has influenced generations of musicians including the groundbreaking British and American punk bands of the ‘70s. His surgery may induce many U.S. employers to seek out domestic medical tourism opportunities to contain spiraling healthcare benefits expenses.

Save Arm and Leg

Employer frustration with the high cost of U.S. healthcare not only saved Carol Vogel an arm and a leg, but also enabled her and her husband, Ed, to enjoy a week long all-expenses-paid trip from their home in Las Vegas to a resort in Newport Beach, Calif.

While in Orange County, Carol Vogel underwent surgery on her ailing hips after her husband’s employer, — newspaper publisher Stephens Media – agreed to a low, fix rate from a local hospital that scored well enough on quality of care.1

The Medical Tourism Association®, which supports awareness initiatives through educational and certification programs and partnership and networking opportunities, has been urging employers interested in controlling healthcare costs and improving outcomes to consider domestic medical travel.

Employers are catching on, realizing they can reduce costs by 20 percent to 40 percent – more than enough to cover travel expenses – by persuading their employees to think twice about traveling to locations that may be no more than a five-hour drive away.2

Market-based healthcare reforms like domestic medical tourism are already being phased-in by major employers in California to lower costs for tens of thousands of employees without sacrificing quality of care.

Employees of Kroger Co. may pay only 10 percent out-of- pocket if they choose one of the company’s 19 select hospitals, compared to 25 percent to 50 percent out-of-pocket at nearby medical centers.

The grocery giant, last year, flew nearly two dozen workers to Hoag Orthopedic Institute in Irvine, Calif., and other hospitals across the United States for hip, knee, or spinal-fusion surgeries. Kroger had enough of the radical pricing among hospitals, and was much more pleased to negotiate bundled deals similar to those offered by phone companies, cable television and travel services.3

Shopping for Bargains

Wal-mart, the nation’s largest employer, pays all the costs including travel expenses for employees in California who agree to have major elective surgery – heart operations, joint replacements, and organ transplants – at seven out-of-state medical facilities that the giant retailer has chosen as “Centers of Excellence,” including Mayo Clinic sites across the nation and at Mercy Hospital in Springfield, Mo.4.  

Four of the designated healthcare systems – Cleveland Clinic, Geisinger Medical Center in Danville, Pa., Mercy Scott & White Memorial Hospital in Texas, and Virginia Mason Medical Center in Seattle – offer specific procedures for cardiac surgery including open heart for coronary bypass grafting, heart valve replacement/repair, closure of heart defects, thoracic and aortic aneurysm correction and other complex cardiac procedures.

Employees who prefer to stay in California or go to a hospital or physician they select themselves are subject to out-of- pocket costs that run as high as $5,000.

PepsiCo Splash

Other large companies, like Lowe’s and PepsiCo, have chosen to establish similar employee programs prior to implementation of Obamacare at the start of the year. Safeway will soon establish a standard fee for a particular service or procedure by offering employees 451 of the most common lab tests at a facility whose charges fall within the 60th percentile nationally.5

PepsiCo, the world’s second-largest food and beverage business, gives employees the option to travel to Johns Hopkins Medicine in Baltimore for cardiac and complex joint replacement surgeries. The travel surgery benefit has been extended to PepsiCo’s domestic employees and their dependents – almost 250,000.6

Self-funded, PepsiCo waives medical plan deductibles and co-insurance for employees and their dependents for choosing Johns Hopkins and also covers the cost of travel and lodging expenses in Baltimore.

In turn, Johns Hopkins offers the procedures in a “bundled” rate, an all-inclusive charge for hospitals and physicians and certain preoperative testing. The reimbursement model, which provides payment for all patient care over the course of a clinical episode, departs from the standard practice of paying for each service on a fee-per-item basis.

At the start of the year, WellPoint, one of the largest health benefits companies in the United States, will expand this type of “reference pricing” to 900 different medical procedures in California. WellPoint’s pilot program for the 1.6 members of the California Public Employees Retirement System lowered the price of members’ hip and knee replacement surgeries by 19 percent in one year, while also demonstrating similar to better outcomes at lower-cost hospitals, the company said.7

The savings, like those experienced in California, could be expanded by WellPoint to other states. The idea is that most doctors will charge similar prices for procedures. When patients are paying out-of-pocket costs, then hospitals will be less likely to mark up charges in an effort to attract consumers. Hospitals benefit through a steady stream of anticipated patients, a good deal for doctors as well.

BridgeHealth Medical Inc., based in Denver, assists employers, insurers and patients with the logistics of surgery shopping. After failed efforts to persuade employers to send patients to India and other overseas destinations, BridgeHealth has since negotiated fixed rates with about 45 hospitals in the United States.8

Last Frontier

Even the Last Frontier wants in on domestic medical tourism to combat the high prices for procedures. Premura Blue Cross Blue Shield, a major insurance company in Alaska where medical costs are above those in the lower 48 states, is offering coverage that includes airfare, hotel and other expenses for member patients who undergo similar treatments at less the cost in the State of Washington.9

Dissatisfied with previous cost and quality efforts, Intel Corp. entered a domestic tourism agreement with Presbyterian Healthcare Services for a narrow-network, accountable-care style model for its New Mexico employees.10

The California-based computer chip giant began the program at the start of the year for about 3,500 employees at a manufacturing plant in Rio Rancho, N.M. Intel, which is self-funded, contracts directly with the single provider system rather than a commercial health insurer this year to administer benefits for some of the company’s eight health plan options.

The deal offers Intel employees a narrow network of Presbyterian providers, which will enable the health system to better manage care. Presbyterian receives a bonus if it meets quality goals and Intel’s employee healthcare costs stay under a pre-determined target.

As better care improves employee population health, Intel predicts the company can save up to $10 million through 2017 with Presbyterian, which risks financial penalty if costs exceed the target.

*(1 Terhune, C.; “Companies Go Surgery Shopping”; Los Angeles Times; Nov. 17, 2012;; Accessed Aug. Sept. 1, 2013.2 Appleby, J.; “Latest Destination for Medical Tourism: The U.S.”; Kaiser Health News; aspx?referrer=search; Accessed Sept. 1, 2013. 3 Terhune, C.; “Companies Go Surgery Shopping”; Los Angeles Times; Nov. 17, 2012;; Accessed Sept. 1, 2013. 4 “Walmart Expands Health Benefits to Cover Heart and Spine Surgeries at No Cost to Associates”; Oct. 11, 2012; walmart-expands-health-benefits-to-cover-heart-spine-surgeries-at-no-cost-toassociates; Accessed Sept. 1, 2013.5 Hollingsworth, B.; “CA’s Emerging Healthcare Market on Collision Course with Obamacare”;; care; Accessed Sept. 1, 2013. 6 Desmon, S.; “PepsiCo Agreement Makes a Splash”; Hopkins Medicine; Winter 2012; magazine/hopkins_medicine_magazine_winter_2012/pepsico_agreement_ makes_a_splash; Accessed Aug. 15, 2013. 7 Hollingsworth, B.; “CA’s Emerging Healthcare Market on Collision Course with Obamacare”;; care; Accessed Sept. 1, 2013.8 Terhune, C.; “Companies Go Surgery Shopping”; Los Angeles Times; Nov. 17, 2012;; Accessed Sept. 1, 2013. 9 Shinohara, R.; “some Alaskans Get Outside Options for Medical Care”; Anchorage Daily News; Sept. 1, 2012; some-alaskans-get-outside-options.html; Accessed Sept. 1, 2013. 10 Domrzalski, D.; “Intel, Presbyterian Experiment with Narrow-Network Care Model”; Albuquerque Business First; July 16, 2013; http://www.bizjournals. com/albuquerque/news/2013/07/16/intel-presbyterian-experiment-care-model. html; Accessed Sept. 1. 2013.)

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