Doug McMillon and Lisa Woods

Health care costs in the U.S. have reached astronomical levels—spending hit $3.7 trillion in 2018—and they continue to climb, weighing on patients and the employers who help foot the bill. As America’s largest employer, Walmart is all too familiar with these trend lines—which have led McMillon and Woods to innovate to do health care better.

For the company’s 1.1 million U.S. employees and their families, Woods launched the Centers of Excellence (COE) program in 2013, enabling workers to travel to top hospitals Walmart contracts with for select procedures. The company foots the bill and has found it’s worth it. More than half the employees referred by their local doctor to get spine surgery, for example, have learned from a COE that they don’t need it. For those who do, an operation at a COE decreases the chance of readmission by 95%. Walmart has found that ­employees treated at a COE recover faster, too, returning to work three weeks earlier.

Walmart has now expanded the COE model to almost a dozen types of care. It’s a blueprint that others have started to emulate and one that might shake up the nation’s dysfunctional health care system.