How health care providers get paid has implications for the delivery of care and cost control; the topic is especially important during an economic downturn with persis- tent growth in health spending. Adding “warranties” to care is an innovation that transfers risk to providers, because payment includes allowances for defects. How do such warran- ties affect patient care and bottom lines? We examine a proposed payment model to illus- trate the role of warranties in health care and their potential impact on providers’ behavior and profitability. We conclude that warranties could motivate providers to improve quality and could increase their profit margins. [Health Affairs 28, no. 4 (2009): w678–w687 (pub- lished online 16 June 2009; 10.1377/hlthaff.28.4.w678)]
Should Health Care Come With A Warranty?
Many goods and services come with warranties; should health care? Analysis of one payment model shows promise and challenges.