Geisinger Health System's Plan to Fix America's Health Care

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Patient no. 86: Geisinger CEO Glenn Steele, who initiated the ProvenCare guarantee, became one of its early beneficiaries. As a patient, the process "was totally opaque to me," he says. "And that's exactly the way I wanted it to be." | photograph by Kyoko Hamada

Here's a guarantee that will get your attention. Geisinger Health System, which runs three hospitals in central Pennsylvania, not only charges a flat fee on coronary-artery bypass surgery and all of the pre- and post-operative care that goes with it, but it also offers a warranty: If a preventable complication puts you back in the hospital within 90 days, Geisinger will eat the cost.

Geisinger's doctors and executives -- who sound like management consultants with their talk of "unnecessary variation," "best practices," and "managing change in complex systems" -- are trying to do more than reengineer heart surgery. They're turning this 92-year-old hospital network/insurance company in Danville, Pennsylvania, into an ambitious laboratory for organizational and financial experiments aimed at fixing American health care. And some of the ideas may actually work.

When CEO Glenn Steele, a surgeon and oncologist, was recruited from the University of Chicago medical school five years ago, Geisinger was recovering from a brief, unhappy merger with Penn State Hershey Medical Center that left it shaken but also open to change. This was ideal for Steele. Because Geisinger had its own hospitals and health-insurance plan, employed 600 doctors directly, and served a stable and therefore easily studied demographic, it was just the kind of place you'd pick if you wanted to test big hypotheses for reforming the health system.

On Steele's watch, Geisinger has expanded computerized patient records and established a venture unit to develop treatments for possible licensing. But the guarantee program, called ProvenCare, represents arguably the biggest challenge to the status quo.

To Steele, the underlying idea is simple enough: "We shouldn't get paid if we don't do the right thing." Most American health care is provided on a fee-for-service basis. If you have six operations and die, that's better financially for your hospital than if you have one procedure and go home. How to replace fee-for-service with pay-for-performance (P4P) has been the talk in medical policy circles for some time. P4P is often linked to "evidence-based medicine," which simply means doing what clinical data say works, rather than relying on habit, hopes, or tradition.

ProvenCare is based on CEO Glenn Steele's concept that "we shouldn't get paid if we don't do the right thing."

ProvenCare sets a fixed price -- which includes a percentage of the historical costs of complications -- for a given medical problem. That creates a powerful financial incentive to get things right the first time. Says Dr. Ronald Paulus, Geisinger's chief innovation and technology officer: "We had to put our money where our mouth was." Steele decided to start with coronary-artery bypass graft (CABG, pronounced cabbage) surgery because it's a high-volume, high-margin procedure that's well studied and has low mortality and complication rates.

"We did this to test whether we could take a very complex system across three hospitals with a huge number of people involved and reliably do something we promised we'd do," says Dr. Alfred Casale, formerly Geisinger's chief of cardiothoracic surgery and now chief medical officer of one of Geisinger's hospitals. Before, he explains, "if the physician's assistants got called to the bedside of somebody who had developed rapid atrial fibrillation [the irregular heart rhythm that happens about 20% of the time after a heart operation], the first thing they would ask wasn't, 'How is he?' It was, 'Whose is he?' Because what they would do next depended on the idiosyncrasies of the surgeon and the cardiologist."

ProvenCare eliminates that kind of variation. After studying guidelines adopted by the American Heart Association and the American College of Cardiology, as well as mountains of clinical research, Steele's seven cardiothoracic surgeons developed a list of 40 steps that should be taken -- or at least considered -- in the treatment of every CABG patient, from the first clinic visit to discharge. "None of the 40 things are new," Casale explains. "Being certain that they are all being done all the time is the real innovation." It's not a question of inventing a secret sauce, he says, so much as guaranteeing "every hamburger that comes out of the place has the secret sauce in it."

For patients, of course, getting what's been proven to work is nothing more than we expect from a Jiffy Lube. But according to a 2003 New England Journal of Medicine paper, only 55% of American patients get all the treatment that is generally accepted as necessary for their problems. To make sure the number at Geisinger is near 100%, surgeons, pre- and post-operation, face a computer screen that asks a set of questions: Is the patient on a beta blocker? A statin? Were antibiotics given at least 60 minutes before surgery and discontinued after 48 hours? A staffer sends an email query if there's no response to any of the 40 steps.