Would You Like the Extended Warranty?

Here's an attempt to "encourage hospitals and doctors to provide high-quality care that can avoid costly mistakes" by standardizing procedures and offering warranties on their work:

In Bid for Better Care, Surgery With a Warranty, by Fred Abelson, NY Times: What if medical care came with a 90-day warranty? That is what a hospital group ... is trying to learn in an experiment that some experts say is a radically new way to encourage hospitals and doctors to provide high-quality care that can avoid costly mistakes.

The group, Geisinger Health System, has overhauled its approach to surgery. ... Geisinger essentially guarantees its workmanship, charging a flat fee that includes 90 days of follow-up treatment. Even if a patient suffers complications or has to come back to the hospital, Geisinger promises not to send the insurer another bill. .

Under the typical system, missing an antibiotic or giving poor instructions when a patient is released from the hospital results in a perverse reward: the chance to bill the patient again if more treatment is necessary. As a result, doctors and hospitals have little incentive to ensure they consistently provide the treatments that medical research has shown to produce the best results.

Researchers estimate that roughly half of American patients never get the most basic recommended treatments — like an aspirin after a heart attack, for example, or antibiotics before hip surgery.

The wide variation in treatments can translate to big differences in death rates and surgical complications. In Pennsylvania alone, the mortality rate during a hospital stay for heart surgery varies from zero in the best-performing hospitals to nearly 10 percent at the worst performer...

[H]ospitals have been slow to focus their attention on standardizing the way they deliver care... In reassessing how they perform bypass surgery, Geisinger doctors identified 40 essential steps, then devised procedures to ensure the steps would always be followed, regardless of which surgeon or which one of its three hospitals was involved.  ... Doctors can choose not to follow a particular measure, based on the needs of an individual patient. But they rarely do so. And they also know that any of the steps can be altered if new medical evidence emerges.

When the system began, Geisinger was performing all 40 steps for bypass surgery only 59 percent of the time. Now, an operation is canceled if any of the pre-operative measures have been forgotten. For the last seven months, Geisinger says, its teams have managed to have a perfect record in following all recommended steps for surgery and follow-up care. ...

The challenge now is to develop the same exacting standards for other kinds of care, like hip replacements, where there is much less medical agreement about what constitutes best practice, Dr. Glenn D. Steele Jr., Geisinger’s chief executive, said ... “I think it’s doable,” he said. “I don’t think it’s going to be easy.” ...

Under the experiment, the hospital charges a flat fee for the surgery, plus half what it has calculated as the historical cost of related care for the next 90 days. Instead of billing for any additional hospital stays — which typically run $12,000 to $15,000 — Geisinger absorbs that extra cost. ...

Promising as the experiment may be, the model may not be easy to adopt in other places. Geisinger ... is among the country’s most sophisticated health systems. It has employed electronic health records for more than a decade, for example, which means Geisinger can closely track the care it provides and the results achieved — in detailed ways that are nearly impossible for the many hospital systems that do not have its degree of digital coordination.

Another Geisinger edge is that it directly employs the bulk of the doctors who practice at its hospitals. That is in contrast to most hospital systems ... where doctors typically act as independent contractors — making it harder for a hospital to coax them toward a uniform set of procedures, and often leaving it unclear who is responsible for follow-up care. ...

Even Geisinger’s chief executive, Dr. Steele, acknowledges that the effort could prove overly ambitious. “I’m not betting the whole business on it,” he said. ... But he also says there is an enormous value in simply showing that a hospital system as large as his can successfully standardize care, demonstrating “the benefit to patients and the benefit to buyers” — all backed by a 90-day warranty.