Should health care come with a warranty?

It’s no secret that one of the keys to cutting health care costs is changing the way doctors are paid.

One proposal that has been used in some integrated health systems, like the Geisinger Health System in Pennsylvania which uses a similar model, is to not pay for complications. Known as the Prometheus model, the system proposes that “half of the costs from avoidable complications must be paid for by the providers themselves.”

In a recent New York Times column, Pauline Chen talks about how realistic implementing the model will be. It seems that large integrated health systems are best to institute such large scale payment reforms, such as the salaried doctors of the Mayo Clinic. but Francois de Brantes, an expert of the Prometheus system, however, says not: “I fundamentally don’t believe you need large integrated systems to make this model work. It doesn’t have to be bigger to be better.”

However, I really don’t see a way how small practices can have a strong enough voice to affect change from the payer side.

Also, I don’t think payment reform should be branded with a “warranty”, per se. A warranty or guarantee implies defect-free care, which is something that is impossible from a medical standpoint. Reinforcing that notion may only serve to heighten some patients’ unrealistic expectations of their medical care.

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  • KW Esq

    The Prometheus Model sounds punitive to the clinician since any complication can arise without negligence so the clinician is being punished for complications which may or may not have been avoidable. Sounds like a slippery slope toward labeling a clinician negligent without the benefit of due process.

  • Rich

    Interesting idea, but not practical. There are too many variables including the fact that patients don’t always follow instructions (or aren’t given clear instructions).

    Plus, it would have to be a system-wide, i.e. national, policy and not just applied to larger medical systems but not all clinics or practices.

    But, then again, hasn’t there been some movement by payors to not pay for medical and surgical errors (when clearly identified)? So the “warranty” idea may be utilized to some degree, in some clear-cut instances.

  • Happy Hospitalist

    KW, that situation is built into the model. Read below to understand how this operates. Right now, physicians are negligent.

    Dr Kevin, I blogged about the Prometheus system a week ago. I think it holds great promise as a bundled care process that aligns the forces of medicine. You should click on this link above to my blog and scroll down to the comment I left on July 21st and 1:37 pm where I posted a link to the Prometheus process for determining payments. It’s not only fascinating, but exciting that someone is working on a bundled payment system that PAYS doctors very well for practicing good medicine.

    This is no capitation in the insurance sense where doctors take on risk for a high acuity population. This system integrates the risk AND marks up the price with buffers, exactly what you are concerned about.

    And physicians who practice good medicine could make a LOT more money doing this. For example, as described in my blog, PROMETHEUS (which stands for Provider payment Reforms for Outcomes, Margins, Evidence, Transparency, Hassel-reduction, Excellenct, Understandability and Sustainability) would pay a provider with stable diabetes $2,300 a year to take care of them, $2,000 more than the current fee for service system pays them.

    There is a hell of a lot of physician profit being left on the table for doctors who practice good medicine, not more medicine. This is a chance for them to benefit from their great care. The ones making a killing are those that do more care, not better care. And more care costs all of us. And is destroying the affordability of our care.

  • Doc99

    I’d be more inclined to give a warranty if the human body itself came with one.

  • alex

    HH: Do you seriously think that would last? These are being proposed as cost cutting measures, not neutral revenue shifting from bad doctors to good doctors. First you move to a quality outcomes payment system so that bad doctors are at subsistence and good doctors make money. Then you just slowly cut reimbursements yearly until the good doctors are where the bad ones were and the bad ones are either good or broke. It’s a classic Medicare shell game and might be nice if it actually played out that way (which it wouldn’t, except for the crapping on providers part which always works out).

  • alex

    HH: Also, in your blog post you refer to bundled care making surgeons efficient. Ha! Maybe you should ask them how they feel about the 90 day postop period. In reality what bundled care allowed Medicare to do was put a big dollar figure on an appendectomy (because it’s really appy+free postop visits, consults, reoperations, etc) and then cut it year by year until it pays less than doing a few colonoscopies in the same time with no postop headaches.

  • Don

    Exactly how much less do salaried physicians like those at the mayo clinic make than their non salaried counterparts?

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  • Anon

    And how about complications that are the patient’s fault? When they don’t keep follow-up appointments, don’t follow post-op instructions and injure the wound, don’t take meds correctly or otherwise hurt themselves, who pays for that?

    If we want docs to be responsible, we have to hold patients accountable for their own sins…

  • Ray

    Suppose a smart hospitalist handles chest pain and Atrial fibrillation without unecessary cardiology consult and avoids overtesting with various CT, mutiple imaging etc, he should be rewarded as opposed to someone who call 2- 3 consults and orders multiple imaging. I still can not believe we can get away with this nonsense in our system. Bundled payment system where the smart and efficient get significant payments because they handled most care should be instituted. Shameful that doctors don’t talk enough about efficent care and value payments. They’re opposing reform while not proposing how to attain the best care. Doctors need to lead rather than oppose or just follow. Why can not their own societies come up with reasonable suggestions and why can not they help identify great ones amongst themselves? All you hear is complaints about how they save the patient and have high loans. They are acting silly in this intense debate.

  • Okulus

    For surgeons, it already exists. It is called the inclusive period, which for an increasing number of procedures includes all care (regardless of how you code modifiers) for up to 90 days following surgery, both inpatient, outpatient, procedural and cognitive.

    And you don’t get paid any extra for it.

    So now you are wanting to bundle cognitive work alone. And will this plan also include a single payment to be divided amongst all involved providers for a period of time? If so, who will make the determination of how the fixed sum is divided? Will there be rewards and penalties? (Suppose on an admission for CHF exacerbation, will the hospitalist be penalized his payment when he consults a cardiologist or nephrologist than when he does not?–then it would seem to work like capitated plans in at least one way.) I am not sure the incentive is all that desirable, or really all that much in favor of the patient, at least potentially so. What if the patient wants services that the physician deems unnecessary? Do patients have any skin in the game?

  • Happy Hospitalist

    alex, the consult is billed separately. As for cutting the payment every year, that is a result of the economics of RVU, not bundled care. RVU economics dictates how much you get in our fee for service system. It’s not the bundling that’s the problem. Bundling drives efficiency. I’ve never seen a surgeon waste time writing full page post op notes, because they don’t need to to get paid.

    Would you rather have the government dictate how you practice medicine or would you rather have yourself decide how to practice. I can guarantee you if you are currently practicing good medicine, you would make a windfall from bundled care models. If you are practicing wasteful medicine, you will want to retire.

  • Doc99

    “Don’t patients have any skin in this game?”

    No … not since the days of third party payors, they don’t. And under the Public Option Obamacare, only the Government will own the game.

  • Skeptical Doc

    To Ray: I admire the smart hospitalist who wants to manage A. Fib without a cardiologist’s help. That would be more efficient. He’ll do that 100 times without a problem, and then 1 patient will have a bad outcome and he’ll get sued. After the suit is filed, he’ll ask for a cardiologist consult on every other AF patient he treats, whether he could handle the next 100 AF patients or not. If he loses the lawsuit because the lawyer asked him why he didn’t call a cardiologist, every dime he saved the system for the first 100 patients will be awarded to the family of the patient who died. But then again, that reward money doesn’t come from the taxpayer so maybe it’s a good strategy. My point is, tort reform with limits to prevent egregious rewards needs to happen or the doctors are going to be at a bigger disadvantage than they are now.

  • Happy Hospitalist

    Skeptical doc, by that reasoning, every sore throat should be referred to an ENT because they may have an abscess hiding down there.

    That’s medicine based on fear. It establishes irrational standards. Referring all Afib because you might get sued is a horrible way to practice medicine. That’s part of the problem

  • Matt

    Tort reform has been in existence in some states for three decades now. Has it changed physicians actions? There is almost no evidence it has in those states. Perhaps it’s time to look for new ideas rather than recycling old ones we know don’t work.

  • Skeptical Doc

    Regarding my previous statement, and your reply:
    I don’t disagree with you. I’m just stating what I think happens because of defensive medicine. In fact, I thought I was stating the obvious- what happens “out there” in the trenches. Many many referrals to specialists aren’t made because the primary care doc doesn’t know how to manage the condition, they either don’t have the time to properly manage a time-consuming condition, or covering their butt in case of lawsuits. OH how I wish it weren’t so. I just don’t understand (except from a political donations standpoint) why Tort reform isn’t being discussed as part of the new healthcare system being created…

  • Skeptical Doc

    To Matt,
    So you don’t believe unnecessary tests and referrals are ordered for defensive medicine purposes? I know in some states limits have been placed on pain and suffering rewards, but (tell me I’m wrong) the overall malpractice system hasn’t really been altered. Specifically, tort reform where accused physicians are judged by a true jury of their peers and a select group of other experts? Or maybe the British system, where doctors found innocent don’t have to pay the legal fees the suit caused them. In our current system, even if you’re innocent you’re still penalized. So I stand by my statement that the current malpractice legal structure needs revamping, then we can really see if it makes a difference in physicians’ actions and unnecessary tests, referrals and costs.

  • Matt

    “So you don’t believe unnecessary tests and referrals are ordered for defensive medicine purposes?”

    Maybe they are and maybe they aren’t. If we could agree on what that term meant, even then there are probably lots of reasons, Kevin’s even highlighted others here.

    What I said was that the “reform” physicians have been proposing will save us all this money, get rural areas all these docs, etc. has never been shown to work that way, despite 30 years of it. And I also said that you say referrals are made because of physicians covering their butts, but they have no idea if that actually works to cover their butts. So I wonder why they do it?

    If physicians want to be only judged by other physicians, that’s fine with me as long as every industry gets that when they’re a defendant. So when physicians file class actions against health insurers for failure to reimburse, the health insurers get a jury of adjusters.

    You want the British system? Give us nationalized healthcare and you’ll get it, I bet. Although the tradeoff is a poor one.

    The best way to reduce your exposure would be to revamp your reimbursement plan to compensate you for time with the patient. Study after study have shown that better communication = fewer claims.

    You wonder why “tort reform” isn’t being discussed? Because it’s not that much of a cost driver when you look at the truly quantifiable numbers. You say “well, defensive medicine costs a lot”, but physicians can’t really agree on what is and is not defensive medicine, and no “reform” we’ve tried yet has ever been shown to reduce it.

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