Geisinger offers flat-fee surgery package

Geisinger Health System is seeing some success with an intriguing experiment in packaging up services at a flat fee. Following a model pushed by proponents of "value-driven" healthcare, Geisinger has established a flat fee for some surgeries that includes not only follow-up care, but also treatment for any complications that arise. The program, which focuses on elective heart bypass surgery, has been in place since February 2006. To make sure they didn't end up providing lots of extra care, Geisinger doctors identified 40 essential steps to follow, then set up procedures to make sure everyone followed the steps at all of the system's three hospitals. Over time, Geisinger has found that patients are less likely to return to the ICU, spend fewer days as inpatients and are more likely to return home rather than to a nursing facility.

Interestingly, despite the potential for cost savings, Geisinger hasn't found insurers willing to take the deal just yet, other than its own captive insurance unit serving 210,000 Pennsylvanians. (Perhaps the package deal isn't priced aggressively enough.) Insurance execs have told Geisinger that the program won't appeal to them unless it adds a total of five to 10 high-ticket procedures to the package program. Otherwise, the package deals don't affect enough beneficiaries to make the program worth their while, health plans say.

To find out more about this initiative:
- read this New York Times article (reg. req.)

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