Pennsylvania health system decreasing complications, costs with 'warranty' system emphasizing best practices

The Washington Post on Tuesday examined how Pennsylvania's Geisinger Health System has successfully improved outcomes for elective heart surgery patients through its 90-day warranty program, which charges a flat fee covering the cost of the procedure and any needed follow-up care. Geisinger operates its own insurance plan and has 41 clinics, three hospitals and 650 staff physicians.

Under the warranty program, marketed as ProvenCare, patients are charged for the cost of the initial operation plus half the average cost of complications over the previous two years. For example, patients undergoing a heart procedure are guaranteed to receive 40 action items identified as best practices, in order to remove the "variability" from physician practices that can hinder quality, according to Geisinger. Surgeons can choose not to perform any element if they provide a reason, and a procedure is canceled if a single preparatory step is missed. Many of the guidelines were taken from the American Heart Association and the American College of Cardiology. Alfred Casale, Geisinger's associate chief medical officer, said, "No one thing on the list is magic. It's the reliability of knowing that every single one is going to get done on every single patient. That is the magic."

Three months after the program started, in 2006, the rate of patients receiving all 40 critical elements jumped from 59% to 100%. Although three months later this rate dropped to 86%, it has since returned to and held steady at 100%. Since the program started, patients now go home sooner and experience fewer complications, and the in-hospital death rate has dropped from 1.5% to 0%. The hospital also has reduced its surgery costs by 15% and has extended the ProvenCare model to six other procedures.

However, ProvenCare's "success has been limited" because patients insured by other companies are "not convinced that the savings would be large enough" to warrant them renegotiating their contracts with Geisinger, the Post reports. Patients electing to use this traditional "pay-per-procedure model" then "run the risk of having to pay thousands of dollars to fix surgeries that go wrong," according to the Post. In addition, some hospitals question the benefits of such a "warranty" because they would not be able to charge for follow-up care delivered. Geisinger President and CEO Glenn Steele said that under the traditional model, "If they do the right thing and keep patients out of the hospital, it costs them."

According to the Post, the ProvenCare model "tracks closely with the policy goals of President Obama," who has identified the reduction of costly errors and duplicate and unnecessary procedures as a major goal of his administration. Obama's budget proposal takes "direct aim at hospital readmission," and administration officials say that "bundling" Medicare payments for some procedures, such as heart bypass surgery, and levying financial penalties on hospitals with high admission rates would save $26.2 billion over the next decade, the Post reports (Connolly, Washington Post, 3/31).

PBS' "NewsHour with Jim Lehrer" on Monday reported on the ProvenCare system. The segment includes comments from Casale and a Geisinger heart patient (Bowser, "NewsHour with Jim Lehrer," PBS, 3/30).