KHN Morning Briefing

Summaries of health policy coverage from major news organizations

Warranties And Reimbursements For Family Caregivers Provide Alternative Payment Methods

The New York Times reports on a proposal for a new health care reimbursement model that offers warranties to patients, a topic also examined in a piece by Francois de Brantes in the journal, Health Affairs. Brantes and co-authors developed a model, called the Prometheus Payment, which offers set fees to providers that "cover all recommended services, treatments and procedures for specific conditions but are also 'risk-adjusted' for patients who may be older or frail. The warranty is based on the costs incurred by avoidable complications. In current fee-for-service plans, all costs from these complications are covered by the third party payer, regardless. But in the Prometheus Payment model, half of the costs from avoidable complications must be paid for by the providers themselves. The result, Mr. de Brantes and his co-authors write, is a payment system that offers patients a health care warranty, since 'providers win or lose financially based on their actual performance in reducing the incidence of avoidable complications.'"

In the New York Times piece, Pauline W. Chen, M.D., interviews de Brantes about "the feasibility of a warranty in the imperfect endeavor called 'health care,' and the potential impact such a plan might have on the patient-doctor relationship." De Brantes notes: "There are no warranties in health care today because everything is paid fee-for-service. And that is the underlying problem with escalating costs. A warranty means that you are going to think in terms of the customer's experience and perceptions. In health care, you would need to start thinking about the care patients have when they need it, not in terms of an artificial payment construct or a third party payer system" (Chen, 6/25).

Meanwhile, a piece in the New York Times' Blog, The New Old Age, examines what type of compensation, if any, a family caregiver is entitled to receive.

Some legal experts argue that contracts between adult children and their aging parents can be advantageous and provide a means for clarifying informal understanding. The New York Times notes: "Elder lawyers have been discussing care contracts or caregiver agreements for years, but interest has picked up since 2006, when Medicaid eligibility requirements tightened. As parents 'spend down' their assets to qualify for Medicaid, which pays for most nursing home care, they face stiff penalties if they simply give family members money." The Times notes: "A simple idea, a care contract can become a complex document, covering not only the caregiver's responsibilities and payments but issues common to any employer-employee relationship. ... It's still an uncommon arrangement, but one that could gain ground as parents live longer and families have to provide more care" (Span, 6/25).

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