NCPA - National Center for Policy Analysis


May 18, 2007

What if medical care came with a 90-day warranty?  That is what a hospital group in central Pennsylvania 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.
  • Taking a cue from the makers of television sets, washing machines and other consumer products, 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.

Geisinger's effort is noteworthy as a distinct departure from the typical medical reimbursement system in this country, under which doctors and hospitals are paid mainly for delivering more care -- not necessarily better care.

Since Geisinger began its experiment in February 2006, focusing on elective heart bypass surgery, it says patients have been less likely to return to intensive care, have spent fewer days in the hospital and are more likely to return directly to their own homes instead of a nursing home.

It is still too early to know whether the approach, which Geisinger calls ProvenCare, will catch on with employers and health insurers:

  • So far, the only insurer that Geisinger has contracted with under the new arrangement is its own insurance unit, which covers about 210,000 people in Pennsylvania.
  • Eventually, though, Geisinger hopes to attract other insurers and employers that provide health benefits by expanding the approach into other lines of care provided by the nearly 660 doctors it employs at its three hospitals and 55 offices in the region.

Source: Reed Abelson, "In Bid for Better Care, Surgery With a Warranty," New York Times, May 17, 2007.

For text:


Browse more articles on Health Issues