Should Health Care Come with a Warranty?

In: Health Affairs (Web Exclusive)
By: de Brantes F, D'Andrea G, and Rosenthal MB
Publisher: Project HOPE
Published: 6/16/2009

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 persistent 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 warranties affect patient care and bottom lines? We examine a proposed payment model to illustrate 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.

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