Mercy's surgery warranty aims to reduce readmissions
Since 2010, surgeons at Mercy's Orthopaedic Institute have been backing their work in hip and knee surgery with a one-year warranty, ensuring the hospital will pick up the bill for any complications that are a direct result of the procedure.
Two years in, the hospital is continuing to move ahead with that pilot program as a way to reduce patient readmission rates, which through national health care reform have become an increased focus of federal penalties.
"The future of accountable care organizations is in trying to plan and predict what a patient's health care is going to cost, so this only makes sense," says Heather Skolfield, director of Mercy's Orthopaedic Institute.
Mercy is one of two hospitals in the state offering warranties on select surgical procedures; Lewiston's St. Mary's Hospital offers 30-day warranties on some surgeries.
The effort is of particular interest to the Maine Health Management Coalition, a Portland-based organization tasked with making the health care industry more transparent to help businesses and consumers make better informed decisions.
"There is a fair amount of cost associated with patient readmission, and a lot of studies have shown those could be avoided by better planning and coordination by health care providers," says Nancy Morris, communications director for the MHMC.
On top of that, she says that the warranty model will help hospitals, businesses and individuals save money as Medicare and commercial insurers start to refuse coverage for such readmissions.
The New York Times reported that, this year, nearly two-thirds of hospitals receiving traditional Medicare payments are expected to pay penalties totaling around $300 million for having patients readmitted within 30 days of their initial treatments.
Last year in Maine, 10 hospitals — including Mercy — received federal penalties for readmissions from heart failure, heart attack and pneumonia treatments, according to Kaiser Health News.
And as federal penalties continue to increase, Morris says private insurers are starting to follow suit, providing more incentive for hospitals to find ways to lower readmissions.
"The Centers for Medicare & Medicaid Services have already started to tell hospitals that they aren't going to pay any longer for admissions due to poor coordination among providers," says Morris. "Traditional commercial insurers are starting to put the same provision in their contracts."
Mercy was unable to provide statistics showing the warranty program's impact on readmission rates, but Mercy orthopaedic surgeon Dr. James Kuhn said in a press release that taking on the new program did prompt the hospital to reassess its material costs for the procedures.
"Simply by bringing to light the amount of money which was being spent on the implants... we have been able to reduce the use of more expensive implants, and actually have stood by the hospital when they negotiated implant prices, which has markedly reduced the cost of joint replacement surgery at the hospital," Kuhn says.
Mercy had hoped that the program would lead to an increased volume of such procedures, but the numbers haven't borne that out so far.
"We're not really seeing what we would have liked to see out of it so far," but the program will "move forward regardless," according to Skolfield.
The hospital will now retool the marketing of the program to draw in more patients, insurers and large employers. "We have to look at different, creative ways to get that information out there," says Skolfield.
A focus group study by MHMC found one flaw in marketing Mercy's warranty program: specifically, the word "warranty" itself.
"A lot of people associate a warranty with paying extra, like when you pay $100 for an extended warranty on a washing machine at Sears," Morris says.
There's been no change in the price of hip or knee replacement procedures at Mercy as a result of the warranty, says Skolfield.
Most Recent
Most Recent
Comments