The couple also received more than a thousand dollars in spending money and a personal concierge, who attended to their every need. For Santa Barbara County, it was money well spent: Sending Robinson-Stone 250 miles away for knee replacement surgery near San Diego saved the government $30,000.

“The only difference between our two hospitals is one is expensive and the other is exorbitant,” said Andreas Pyper, assistant director of human resources for Santa Barbara County, referring to the local options.

Frustration with sky-high hospital bills and a lack of local competition is common to many employers and consumers across the country after years of industry consolidation. Fed up with wildly different for routine operations, some are they insure to top-performing providers who offer bargain prices. Santa Barbara County, with about 4,000 employees, is among a handful of public entities to join them.

The county has saved nearly 50 percent on four surgery cases since starting its out-of-town program last year, officials said. The program is voluntary for covered employees.

At a Scripps Health hospital in the San Diego area, the county paid $61,600 for a spinal fusion surgery that would have cost more than twice as much locally. It avoided two other operations altogether after patients went outside the area for second opinions.

Typically, employers are seeking deals through “bundled payments” — in which one fixed price covers tests, physician fees and hospital charges. And if complications arise, providers are on the hook financially. Medicare began experimenting with this method during the Obama administration.

Santa Barbara County is among about 400 employers on the West Coast working with Carrum Health, a South San Francisco start-up that negotiates bundled prices and chooses surgeons based on data on complications and readmissions.

“Not all surgeons are equal. We don’t want to give Scripps a blank check. That defeats the whole purpose,” said Sachin Jain, Carrum’s chief executive.

Santa Barbara officials try to persuade workers and their family members to participate in its program by waiving copays and deductibles. The county pays about $2,700 in travel costs and still comes out way ahead.

“If that doesn’t speak to the inefficiencies in our health care system, I don’t know what does,” Pyper said. “It’s almost like buying a Toyota Corolla for $50,000 and then going to San Diego to buy the same Corolla for $16,000. How long would the more expensive Toyota dealership last?”

Even as more employers and insurers embrace bundled payments, the Trump administration is applying the brakes. In August, Medicare officials mandatory bundled payments for certain surgeries and scaling back the program for knee and hip replacements. Health and Human Services Secretary Tom Price, when he was still a member of Congress, Medicare of overstepping federal authority and interfering in the doctor-patient relationship. Hospital trade groups have voiced similar objections.

That leaves some health-policy experts dismayed.

“These bundled payments put pressure on medical providers … and the savings are astonishing,” said Bob Kocher, a former health official in the Obama administration and now a partner in the venture capital firm Venrock.

Santa Barbara County officials said they had no choice after seeing their medical costs soar by 15 percent in each of the past two years. Like many local governments, it has an older workforce prone to chronic illness, blocked arteries and bum knees.

But health costs run higher than the state average in this scenic coastal county of about 450,000 people, from Oakland-based Integrated Healthcare Association. By , the average health insurance premium in the individual market runs $660 a month in Santa Barbara, 27 percent higher than in Los Angeles.

Still, Maya Barraza, the county’s manager for employee benefits and rewards, knew the program would be a hard sell to workers. “You don’t want to be away from your family and what’s familiar,” she said.

Cottage Health, the county’s largest health system, says it wants to keep patients in town for treatment and follow-up care.

Established in 1891, it’s grown from a single hospital to more than 500 beds across three hospitals, and annual revenue hit $746 million last year.

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Valet attendants greet visitors at two entrances outside the group’s white, Spanish-style hospital in the city of Santa Barbara. In the main lobby, the names of wealthy donors are splashed across one wall, including billionaire investor and Donald Trump confidant Thomas Barrack.

“We are continually looking at reducing costs and improving quality,” said Cottage Health spokeswoman Maria Zate. “Cottage Health has some of the top surgeons in California.”

Sixty miles north in Santa Maria, the state’s largest hospital chain, Dignity Health, offers another option: Marian Regional Medical Center.

Both Cottage and Dignity hospitals in Santa Barbara County have quality scores of fair to excellent for joint replacements, spinal procedures and coronary bypass surgeries, according to three years of Medicare data analyzed by research firm .

Dignity Health didn’t respond to requests for comment.

Carrum tries to help employers like Santa Barbara County find more affordable options. It has struck bundled price deals for various procedures with Scripps hospitals in the San Diego area, Stanford Health Care in the Bay Area and Swedish Medical Center in Seattle, part of the Providence Health chain.

Several other companies, such as Health Design Plus, are also assisting employers, insurers and patients with the logistics of surgery shopping. Boeing and other are the most aggressive at pursuing bundled pricing and sending workers across the country for care.

Since 2014, more than 2,000 joint replacement and spinal surgeries have been performed for fixed prices through the Pacific Business Group on Health’s “” program, which includes employers such as JetBlue and Lowe’s. It added gastric bypass and other bariatric surgeries last year, and the employer group is working on bundled prices for cancer treatment.

Some companies have gone so far as to for cheaper care, but most employers favor a more regional approach, experts say. Workers still rely on local physicians for follow-up care.

Municipalities, school districts and other public employers have been slower to adopt some of these strategies, perhaps to avoid the political risk of antagonizing local providers, some .

For some hospitals, there are advantages in offering deep discounts: They get patients they otherwise would never see and are paid in full right after the patient is discharged, avoiding the onerous billing and collections process.

They also have the financial capacity to offer such sharply reduced prices.

Michael Bark, assistant vice president of payer relations at Scripps Health, said most hospitals significantly mark up their commercial rates for orthopedic procedures and cardiac surgeries to compensate for lower government reimbursements.

“There are immense profit margins built into those cases,” Bark said.

Robinson-Stone, a former county sheriff’s deputy and a computer support specialist, was initially wary of traveling for her surgery. But the 62-year-old Lompoc resident had ongoing pain that kept her from biking, walking her dogs and tending to her fruit trees. Medication and cortisone shots didn’t work, and she had no ties to local surgeons. So she signed up online and was given a choice of six orthopedic surgeons at Scripps Green Hospital in La Jolla.

In June 2016, she and her husband, Frank Stone, checked in at the Estancia La Jolla Hotel and Spa.

Robinson-Stone met the surgeon on a Wednesday, had the operation the next day and returned to her hotel room by Saturday. She continued physical therapy at the hotel and returned to the hospital a few days later to have the staples removed.

She was back on her bike within two months and eventually lost about 20 pounds.

“I just celebrated one year from surgery,” she said, “and I’m a happy camper.”

Heidi DeMarco contributed to this story.

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Under the new program, Medicare effectively agrees to pay hospitals a set fee — a bundled payment — for all care related to hip or knee replacement surgery, from the time of the surgery until 90 days after. Traditionally, hospitals collect payments for many components of care and rehabilitation individually.

Tom Price, the president-elect’s HHS nominee, a congressman from Georgia and an orthopedic surgeon, has actively opposed the idea of mandating bundled payments for these orthopedic operations, calling it “experimenting with Americans’ health,” in a letter to the Medicare agency just last September. In addition, the agency which designed and implemented the experiment, the Center for Medicare and Medicaid Innovation, was created by the Affordable Care Act to devise new methods for encouraging cost-effective care. It will disappear if the act is repealed, as President-elect Trump has promised to do.

The study appeared Tuesday in the Journal of the American Medical Association. Though one of its authors is Dr. Ezekiel Emanuel, a professor at the University of Pennsylvania who helped design the ACA, the research relies on Medicare claims data from 2008 through mid-2015, long before the presidential election.

Starting in 2016, CMS required around 800 hospitals in 67 cities to use the bundled payment model for joint replacements and 90 days of care after the surgery as part of the Comprehensive Care for Joint Replacement program. The program had previously been road-tested on a smaller number of hospitals on a voluntary basis, which formed the focus of the research.

The study found that hospitals saved an average of 8 percent under the program, and some saved much more. Price has been skeptical that bundled payments did save money, but the researchers estimate that if every hospital used this model, it would save Medicare $2 billion annually.

The bundled payment program works like this: For some specific kinds of medical procedures, including joint replacements or some heart surgeries, the Centers for Medicare & Medicaid Services will add up the costs for the entire episode, from the hospital stay and medical supplies to the rehabilitation afterward. If the total costs are below a target set by CMS, the hospital gets to keep the savings. If not, the hospital has to pay Medicare the difference. It’s supposed to incentivize more efficient spending and better care coordination between providers, so they can lower costs.

In practice, it seems to be working. Baptist Health System, a network of five hospitals in San Antonio, saved an average of $5,577 on each joint replacement without sacrificing the quality of care, according to the study. Baptist was an early adopter of bundled payments; it began experimenting with them in 2008. Over seven years, the hospital system has cut Medicare’s costs on knee replacements by almost 21 percent.

The savings came without impacting quality. Patients at Baptist Health System were just as likely to be readmitted to the hospital or end up in the emergency room as patients nationally. There was some indication that quality of care may be better; fewer patients under bundled payments had long, extended hospital stays.

In Price’s from September, he said that Medicare had exceeded its powers in imposing such bundled payments, which he said took decisions out of the hands of doctors and patients.

That doesn’t seem to be the case, according to Dr. Amol Navathe, an assistant professor of medicine and health policy at the University of Pennsylvania, and one of the authors of the JAMA study. Instead, Navathe and his colleagues suggest that the bundled payments actually fostered greater collaboration between surgeons, administrators and patients because programs could only succeed in saving money if physicians were engaged in creating standardized pathways for care.

For example, the Baptist Health System saved about 30 percent on implant costs, around $2,000 on each artificial joint, by using the least expensive medically equivalent implants as determined by the hospitals’ surgeons.

Usually, physicians are prevented from benefitting when hospitals save money because of anti-kickback laws. Waivers under bundled payment models mean surgeons can put in the time to find the best, most cost-effective implants, and share in some of that savings.

“It takes that extra level of effort and coordination, and proactively communicate with [patients],” Navathe said. “Preplanning, setting of expectations and communicating up-front is resource intensive, when they have the incentive to do that they were willing to expend the extra resources to make that happen.”

When bundles included care after a patient’s hospital stay, spending on rehabilitation went down 54 percent. That’s because hospitals took the time to match patients to the right level of care, Navathe said.

Patients who didn’t need to stay in a nursing home or rehab center were set up with home health care or physical therapy.

Price has objected to CMS making bundled payments mandatory, calling it an instance of federal overreach. But bundled payments only work if everyone has to participate, according to Darshak Sanghavi, the former director of prevention and population health at the Center for Medicare and Medicaid Innovation.

If hospitals can choose whether or not to participate, only the ones that are already delivering care efficiently –and coming in under CMS’s cost target — will use bundles and Medicare will constantly be paying out bonuses. The system needs to be mandatory, Sanghavi said, to pull in less efficient hospitals and give them incentive to change.

“Stopping the programs for ideological reasons I think impedes innovation in a way that is going to consign us to having really, really high costs of care that’s going to continue in the future,” Sanghavi said.

Bundled payments aren’t just for hip and knee replacements. On Dec. 20, CMS it would expand mandatory bundled payments to treatments for heart attacks, bypass surgery and cardiac rehab beginning in July 2017. In its waning days, the Obama administration is effectively throwing down the gauntlet to the incoming administration on bundled payments, one of its signature reforms.

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How do these firms do it? With “bundled payments,” a way of paying that’s gaining steam across the health care industry, and that Medicare is now for hip and knee replacements in 67 metropolitan areas, including New York, Miami and Denver.

Here’s how it works: Lowe’s and other employers pay one flat rate for a particular procedure from any of a number of hospitals they’ve selected for quality, even if they are a plane ride away. And, under the agreement, the hospital handles all the treatment within a certain time frame — the surgery, the physical therapy and any complications that arise — all for that one price.

It was , senior vice president for compensation and benefits at Lowe’s, who came up with the idea in 2010. When he told managers at other companies about it, he said, “The first question was always, ‘Oh, this is just for executives, right?’ And I said no, absolutely not, this is for any Lowe’s employee in the Lowe’s health care plans.”

The program is optional for employees. They can still use their local surgeon, if they prefer, and pay out-of-pocket whatever their insurance doesn’t cover. But more than 700 Lowe’s employees have taken the company up on its offer, Ihrie said.

It’s a great deal for patients, he said, and for his company.

“We were able to get a bundled price, which actually enables us to save money on every single operation,” Ihrie says.

The Pacific Business Group on Health negotiates that price for Lowe’s, Walmart and a number of other large employers. Associate Director oversees these deals, and said her team is able to negotiate rates that are 20 to 30 percent below what the companies used to pay for the procedures.

“We’re seeing savings at the front end,” she said, because Lowe’s pays less for the surgery. And, because the hospital is responsible for all that care, the institution has a strong incentive to be careful and thorough, Ross added.

That means “huge savings on the back end,” she said, “from things like reduced re-admissions, reduced return to the O.R. and lower rates of blood clots. Those are hugely expensive, preventable complications.”

Lowe’s comes out ahead, even after paying for the patient’s travel, Ihrie confirmed.

Participating hospitals win, too, by attracting more patients, said Trisha Frick, who handles such negotiations on behalf of in Baltimore.

“It’s new business for us,” Frick said. “And, for the most part, the reimbursement is acceptable; we believe that we can provide that, within that amount of money.”

Medicare, the health insurance program for people 65 and older, started using bundled rates for hip and knee replacements this month. Medicare had some early evidence from pilot programs that “the model works well,” according to , a health care consultant with The Advisory Board Company.

“Medicare is saving something like $4,000 on orthopedic cases,” he said.

Medicare’s deal is somewhat different than Lowe’s. Patients may pay something out of pocket, depending on the type of Medicare policy that insures them. And while the few hospitals selected in Lowe’s program can bank on increasing their revenue and the number of surgeries they’ll get, the rates established by Medicare’s bundled payment system hold for every hospital in a participating area.

“Entire markets are selected for participating,” Lazerow explains. “If you’re in the San Francisco market or you’re in the New York market, all of the hospitals are actually participating in the program.”

But there are similarities, too, and Medicare may learn some lessons from Lowe’s experience. Lowe’s initially had trouble wrangling all a patient’s medical records from local doctors. And the company found that patients who had questions weeks or months after an operation sometimes had trouble following up with the out-of-town doctor who had performed the surgery.

“You have some setbacks, and things happen, and you just have questions,” Ihrie said. “So what we give every patient now is a little card with the doctor’s name and direct phone line and the nurse’s name and direct phone line. And all of a sudden, things were a lot better.”

Another lesson was startling, Ross said. In addition to cutting the cost of procedures, another chunk of savings to the companies came from avoiding surgeries that probably shouldn’t happen in the first place.

“We’re seeing up to 30 percent — close to 30 percent of cases — who should not be moving forward with the joint replacement,” Ross said.

What typically happens in these cases, she said, is that employees get a recommendation from a local doctor that they should have surgery, only to have physicians at the selected hospitals deem the operation inappropriate.

In some cases that may be because the employee hadn’t first tried less invasive treatments, such as physical therapy, Ross said. Or the employee may need to lose weight first, to make the surgery safer.

Ihrie said what heartens him most about his company’s program is that Lowe’s employees are now taking a more active role in decisions about their care.

“What treatment you receive is not always very black and white,” he said. “The mere fact that people now think about what they’re doing helps us control costs across the board.”

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