From crockpots to sports coupes, consumers expect warranties on the products they buy.
But there are few guarantees when it comes to medical procedures. In fact, hospitals can make more money treating complications of a botched surgery than they make when things go well.
Now, one Seattle medical center hopes to eliminate that perverse economic incentive and improve the quality of care by offering warranties on some of its most common surgeries.
Virginia Mason’s new policy will initially apply only to total hip and knee replacements, but other warranties are in the works, said Chairman and CEO Dr. Gary Kaplan.
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The hospital will offer the two procedures for a set price, which includes diagnosis, surgery and rehabilitation. If complications arise, there will be no extra charge to treat them.
“This is quite an innovation, and something every patient and every purchaser has the right to expect in health care,” Kaplan said. “In many ways we are blazing a new trail here.”
Only a handful of medical centers around the country offer similar warranties. Virginia Mason is the first in Washington.
“It’s very unusual,” said Lisa McGiffert, director of Consumers Union’s Safe Patient Project. “We’re delighted that they are putting this out and promoting it.”
The Safe Patient Project is also pushing manufacturers of artificial hips and knees to guarantee their devices against defects — something Virginia Mason’s warranty will not cover.
Virginia Mason hopes its flat rate and warranty will entice insurance companies and employers who offer health coverage. The deal could also be available to people with individual policies if their insurers opt in.
The actual rate will be negotiated with each insurer, Kaplan said.
The warranty will not apply to procedures covered by Medicare or Medicaid.
The hospital focused on hip and knee replacements because the number of procedures is soaring as baby boomers age, Kaplan said. “We want to remain active into our 70s and 80s.”
Nationally, more than 700,000 knee replacements and 330,000 hip replacements are performed annually. At Virginia Mason, nearly 1,400 patients opted for one of the procedures last year.
The key to being able to offer a warranty, Kaplan explained, is the hospital’s conviction that it can prevent complications by adhering to a set of “best practices” proved to yield the best outcomes. For example, before surgery, every patient gets a mix of drugs to blunt pain and fend off nausea. During and after the operation, short-acting and targeted anesthesia allows patients to get back on their feet quickly, which hastens recovery.
About 3 percent of Virginia Mason’s joint-replacement patients now suffer some type of complication. “We think we can take that to zero,” Kaplan said. “And if we are able to mistake-proof the care, why not pass that benefit on to the patient and those who are paying the bill?”
The standardized procedures have already helped keep costs down, Kaplan said. The average hospital charge for joint replacement at Virginia Mason is about $40,000, compared with a statewide average of about $60,000, according to the Washington State Hospital Association. Some hospitals in the state charge more than $95,000.
Geisinger Health System in Pennsylvania introduced some of the country’s first surgical warranties in 2007, and offers them through the company’s own insurance arm. But outside insurers have been less enthusiastic.
“You would think, for an insurer, this would be the greatest thing since sliced bread,” said Dr. Michael Suk, chairman of orthopedic surgery. “But to be perfectly honest with you … there aren’t a lot of insurance companies that have stepped forward to say they want to do this.”
Consumers demand warranties on cars and other products, but it’s tougher to compare hospitals and judge the value of a warranty like Virginia Mason’s, said Katharine Luther, vice president of the Institute for Healthcare Improvement in Cambridge, Mass.
“But I do think it’s a big step in the right direction that organizations are saying: We are going to stand behind our work … and we’re going to put it out there for potential patients and their families to evaluate.”
Perhaps the biggest impact will be on other hospitals and health systems, who may consider offering similar warranties. “I think that will benefit all patients,” Luther said.
In Washington, a group of insurance companies and health-care providers called the Bree Collaborative developed guidelines for hip- and knee-replacement warranties and recommended they be incorporated into insurance coverage for Medicaid recipients and state workers.
Sandi Doughton at: 206-464-2491 or firstname.lastname@example.org