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Pa. Hospitals Test ‘Warranty’ on Patient Care

March 30, 2009 at 6:40 PM EDT
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The Geisinger hospital system in Pennsylvania has developed a new approach to health care management, including a 90-day "warranty" on certain procedures. Betty Ann Bowser reports.
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GWEN IFILL: We turn to the story now of how one health care system in Pennsylvania altered its model of care and had a big impact. The program makes use of some of the ideas now being considered at the federal level.

The NewsHour’s health correspondent, Betty Ann Bowser, has our report. The Health Unit is a partnership with the Robert Wood Johnson Foundation.

BETTY ANN BOWSER, NewsHour Correspondent: John Rushton is looking forward to the day when he’ll be able to ride his bike to work again. The 62-year-old recently underwent open heart surgery. So far, he’s recovering with no complications at his home in Kingston, Pennsylvania, with his wife, Karen, at his side.

KAREN RUSTON: This is the Endora. That’s for your high blood pressure.

BETTY ANN BOWSER: But if a problem does develop in 90 days following his bypass-grafting surgery, the hospital where Rushton had the operation guarantees it will fix the problem for no additional charge to him or his insurance company.

JOHN RUSTON: I think the concept is great. You have the surgery done. You don’t worry about, well, if I have to go back, what do I have to do as far as insurances and everything?

'Guaranteed' medical care

BETTY ANN BOWSER: Rushton was treated at one of Geisinger Health System's three acute care hospitals in central Pennsylvania, which serves about 2.5 million people. Geisinger also has its own health plan that insures about 215,000 people across the state.

In 2006, Geisinger started offering something unusual: a 90-day "warranty" on coronary artery bypass surgery, through it's so called ProvenCare program. If patients are going to develop complications, it's usually in that 90 days after surgery when they occur.

But Geisinger provides pre-operative consultation, doctors fees, hospitalization, drugs, the operation itself, all follow-up care, and even repeat surgery, if necessary, for three months for a flat rate of about $30,000.

This is an idea President Obama has embraced in his effort to reform health care.

DR. ALFRED CASALE, Geisinger Health System: It's not so much like buying a car as it is getting your car repaired.

BETTY ANN BOWSER: Dr. Alfred Casale is Rushton's doctor and Geisinger's director of cardiac surgery.

DR. ALFRED CASALE: We're saying that we're so sure that by doing these things right, we're going to lower complication rates that we're willing to share the risk of that with the payers, rather than, in the past, there was this perverse mechanism where, if I forgot to give an antibiotic and the patient developed a wound infection after that, and if that patient had to come back in and have another operation to fix the wound, I'd send you another bill, and your insurance company would happily pay it.

We think this ProvenCare process has shifted from paying for individual items to paying for value delivered by a high-quality, high-performing system.

Strict protocol ensures quality

BETTY ANN BOWSER: Before it started ProvenCare, Geisinger's medical menu was like eating at an a la carte restaurant. Everything was billed separately.

But once they started bundling services, overall treatment costs were reduced. They did it by identifying 40 essential best practices endorsed by the American College of Cardiology and the American Heart Association and then applied them to every bypass surgery.

DR. ALFRED CASALE: We have a system built up so that, regardless of how busy it gets, how distracted somebody may temporarily be or what else is going on, those idealized care is going to still happen regardless of whatever else is going on in the rest of the universe.

BETTY ANN BOWSER: Part of that protocol includes a "time out" before each surgery begins to make sure nothing is missed or done incorrectly.

DOCTOR: Antibiotics went in at?

NURSE: 8:32.

DOCTOR: At 8:32, all right. Any nursing service issues?

NURSE: Nope.

DOCTOR: Any profusion issues?

NURSE: Nope.

DOCTOR: All right. Position is supine. There are no implants. And everyone participated. All in agreement, say aye.

NURSE: Aye.

DOCTOR: Aye.

BETTY ANN BOWSER: A landmark Rand Corporation study showed only about half of all American patients get the most basic of recommended procedures, things like taking an aspirin after a heart attack or getting an antibiotic before surgery.

DOCTOR: We'll get you set up for cardiac rehab while you're in the hospital before you go home.

BETTY ANN BOWSER: That's what doctors are trying to avoid at Geisinger in order to improve quality and cut costs. Dr. Ron Paulus is Geisinger's executive vice president.

DR. RONALD PAULUS, Geisinger Health System: We've reduced the complication rates of all types by at least 20 percent. In many studies, the typical complication costs $5,000. So if you can reduce by 20 percent these things that are bad for patients, bad for doctors, bad for nurses, and they cost $5,000 a piece, that's a win-win.

Efficient electronic record system

BETTY ANN BOWSER: Geisinger has now extended ProvenCare to a dozen other types of procedures, including childbirth and hip replacement.

One of the things that makes all of this work is Geisinger's electronic medical record system, one of the most sophisticated in the country. Currently only about 8 percent of the nation's 5,000 hospitals have some kind of electronic medical records, but a recent study published in the New England Journal of Medicine found less than 2 percent use those records comprehensively.

That's one of the reasons President Obama included billions of dollars to develop health technology in his budget and stimulus package.

At Geisinger, medical information is available 24 hours a day for all doctors on a patient's care team. Patients can stay in contact with their doctors via e-mail.

DR. RONALD PAULUS: Electronic health records can make care safer, more reliable, and more efficient by remembering for the clinicians that are caring for patients all the different things that are going on.

We have thousands of doctors that aren't Geisinger doctors that log into our systems and look up information about their patients. Also, the right kind of system can enable the consumer to be more engaged in their own care.

BETTY ANN BOWSER: And when they leave the hospital, a nurse practitioner can monitor chronic conditions. Here, Nurse Sonia Huffman checks on a patient with diabetes and heart disease.

SONIA HUFFMAN, Nurse: I will be checking on your weight. And if it looks like they're going up very rapidly since the adjustment we made in your medication, I'll give you a call.

PATIENT: I'm going to be watching it for the next couple of days.

BETTY ANN BOWSER: This kind of monitoring has significantly reduced hospital readmissions at a time when nationwide nearly 30 percent of Medicare patients end up back in the hospital within three months.

Geisinger's doctors are employed by the hospital and paid more when they provide better care. Pay for performance is another health care reform idea on the table in Washington.

DR. RONALD PAULUS: The physicians are paid a base salary. And then they have an incentive, a bonus opportunity. The bonus opportunity is driven off of quality measures and off of performance, just like, you know, many other people might have in their own jobs. So they do better financially if they achieve these quality outcomes that we've established.

Insurance companies wary

BETTY ANN BOWSER: Medicare has initiated similar pay-for-performance pilot programs with some 250 hospitals nationwide. Some studies show the concept could reduce hospital costs by more than $4.5 billion annually.

But research on the concept is mixed. Recently, the respected journal Health Affairs released a study of the country's largest pay-for-performance program in California. It found there were no breakthroughs in the quality of care.

But Geisinger's president, Dr. Glen Steele, thinks a serious discussion of paying doctors for performance has to be part of any meaningful health care reform.

DR. GLEN STEELE, President, Geisinger Health System: We're trying to pay for results as opposed to paying for units of work. And I think we ought to really figure out how to re-engineer our care-giving to achieve that best practice.

We can start to redesign the payment system around that right now, and I believe the lever is Medicare. I think the commercial insurance companies will follow Medicare, if Medicare can start changing that reimbursement incentive.

BETTY ANN BOWSER: Paying for performance might mean doctors make less money...

DOCTOR: How's the vein look, Jeff?

BETTY ANN BOWSER: ... something the Medicare Payment Advisory Commission's Bill Scanlon thinks is a major hurdle to overcome.

BILL SCANLON, Medicare Payment Advisory Commission: One of the difficulties of having this happen is that most hospitals do not employ their physicians. The physicians are independent, so this is going to involve some kind of a negotiation and some kind of agreement between physicians and hospitals.

Medicare can begin this process, because we certainly are working on developing standards for appropriate care, but it's a process that is going to take time. It's not something that's going to happen overnight.

BETTY ANN BOWSER: So far, no major insurance company has contracted with the ProvenCare program, except Geisinger's own.

But doctors there believe, if they can continue to successfully extend the concept to more and more types of treatment, insurance companies will start to come around.