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Walmart Inc., the nation’s largest private employer, is worried that too many of its workers are having health conditions misdiagnosed, leading to unnecessary surgery and wasted health spending.

The issue crystallized for Walmart officials when they discovered about half of the company’s workers who went to the Mayo Clinic and other specialized hospitals for back surgery in the past few years turned out not to need those operations. They were either misdiagnosed by their doctor or needed only non-surgical treatment.

A key issue: Their diagnostic imaging, such as CT scans and MRIs, had high error rates, said Lisa Woods, senior director of benefits design for Walmart.

So the company, whose health plans cover 1.1 million U.S. employees and dependents, has recommended since March that workers use one of 800 imaging centers identified as providing high-quality care. That list was developed for Walmart by Covera Health, a New York City-based health analytics company that uses data to help spot facilities likely to provide accurate imaging for a wide variety of conditions, from cancer to torn knee ligaments.

Although Walmart and other large employers in recent years have been steering workers to medical centers with proven track records for specific procedures such as transplants, the retail giant is believed to be the first to prod workers to use specific imaging providers based on diagnostic accuracy — not price, said employer health experts.

“A quality MRI or CT scan can improve the accuracy of diagnoses early in the care journey, helping create the correct treatment plan with the best opportunity for recovery,” said Woods. “The goal is to give associates the best chance to get better, and that starts with the right diagnosis.”

Walmart employees are not required to use those 800 centers, but if they don’t use one that is available near them, they will have to pay additional cost sharing. Company officials advise workers that they could have more accurate results if they opt for the specified centers.

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Studies show a 3% to 5% error rate each workday in a typical radiology practice, but some academic research has found mistakes on advanced images such as CT scans and MRIs can reach up to 30% of diagnoses. Although not every mistake affects patient care, with millions of CT scans and MRIs done each year in the United States, such mistakes can have a significant impact.

“There’s no question that there are a lot of errors that occur,” said Dr. Vijay Rao, chairwoman of radiology at the Thomas Jefferson University Hospital in Philadelphia.

Errors at imaging centers can happen for many reasons, including the radiologist not devoting enough time to reading each image, Rao said. The average radiologist typically has only seconds to read each image, she said. “It’s just a lot of data that crosses your eye and there is human fatigue, interruptions, and errors are bound to happen,” she added.

Other pitfalls: the technician not positioning the patient correctly in the imaging machine or a radiologist not having sufficient expertise or experience, Rao said.

Employers and insurers typically do little to help patients identify which radiology practices provide the most accurate results. Instead, employers have been focused on the cost of imaging tests. Some employers or insurers require plan members to use free-standing outpatient centers rather than those based in hospitals, which tend to be more expensive.

Woods said Walmart found that deficiencies and variation in imaging services affected employees nationwide. “Unfortunately, it is all over the country. It’s everywhere,” she said.

Walmart’s new imaging strategy is aligned with its efforts over the past decade to direct employees to select hospitals for high-cost health procedures. Since 2013, Walmart has been sending workers and their dependents to select hospitals across the country where it believes they can get better results for spine surgery, heart surgery, joint replacement, weight loss surgery, transplants and certain cancers.

As part of its “Centers of Excellence” program, the Bentonville, Ark.-based retail giant picks up the tab for the surgeries and all related travel expenses for patients on the company’s health insurance plan, including a caregiver.

Sampling Imaging Centers’ Work

Covera has collected information on thousands of hospital-based and outpatient imaging facilities starting with its previous business work in the workers’ compensation field.

“Our primary interest is understanding which radiologist or radiology practices are achieving the highest level of diagnostic accuracy for their patients,” said Dan Elgort, Covera’s chief data science officer.

Covera has independent radiologists evaluate a sampling of patient care data on imaging centers to determine facilities’ error rates. It uses statistical modeling along with information on each center’s equipment, physicians and use of industry-accepted patient protocols to determine the facilities’ rates of accuracy.

Covera expects to have about 1,500 imaging centers in the program by year’s end, said CEO Ron Vianu.

There are about 4,000 outpatient imaging centers in the United States, not counting thousands of hospital-based facilities, he estimated.

As a condition for participating in the program, each of the imaging centers has agreed to routinely send a sampling of their patients’ images and reports to Covera.

Vianu said studies have shown that radiologists frequently offer different diagnoses based on the same image taken during an MRI or CT scan. Among explanations are that some radiologists are better at analyzing certain types of images — like those of the brain or bones — and sometimes radiologists read images from exams they have less experience with, he said.

Vianu noted that most consumers give little thought to where to get an MRI or CT scan, and usually go where their doctors send them, the closest facility or, increasingly, the one that offers the lowest price. “Most people think of diagnostic imaging as a commodity, and that’s a mistake,” he said.

Rao applauded the effort by Walmart and Covera to identify imaging facilities likely to provide the most accurate reports. “I am sure centers that are worried about their quality will not be happy, but most quality operations would welcome something like this,” she said.

Few Guides For Consumers

Consumers have little way to distinguish the quality of care from one imaging center to the next. The American College of Radiology has an accreditation program but does not evaluate diagnostic quality.

“We would love to have more robust … measurements” about the outcomes of patient care than what is currently available, said Dr. Geraldine McGinty, chair of the college’s board of chancellors.

Facilities typically conduct peer reviews of their radiologists’ patient reports, but there is no public reporting of such results, she said.

Covera officials said they have worked with Walmart for nearly two years to demonstrate they could improve the quality of diagnostic care its employees receive. Part of the process has included reviewing a sample of Walmart employees’ health records to see where changes in imaging services could have caught potential problems.

Covera said the centers in its network were chosen based on quality and price was not a factor.

In an effort to curtail unnecessary tests, Walmart, like many large employers and insurers, requires its insured members to get authorization before getting CT scans and MRIs.

“Walmart is on the leading edge of focusing on quality of diagnostic imaging,” said Suzanne Delbanco, executive director of the Catalyst for Payment Reform, an employer-led health care think tank and advocacy group.

But Mark Stolper, executive vice president of Los Angeles-based RadNet, which owns 335 imaging centers nationally, questions how Covera has enough data to compare facilities. “This would be the first time,” he said, “I have seen or heard of a company trying to narrow a network of imaging centers that is based on quality instead of price.”

Woods said that even though the new imaging strategy is not based on financial concerns, it could pay dividends down the road.

“It’s been demonstrated time and time again that high quality ends up being more economical in the long run because inappropriate care is avoided, and patients do better,” she said.