Surgery Warranties 101

How to Get Insurance on Your Next Operation

Surgery Warranties 101
October 29, 2014

When you purchase big-ticket items, a warranty is usually included to provide customer protection against a defective product. You may have even purchased an extended warranty to provide coverage for a longer period of time or against a wider variety of problems (and, goodness knows, you will be asked many times if you want to purchase one).

However, if you undergo a surgical procedure and it goes awry, your typical recourse is to call one of the thousands of lawyers buying up daytime television ads. They attempt to secure compensation for you through the court system while you undergo whatever follow-up procedure or extended post-operative care is necessary to make things right again.

That is still true for many procedures, but some health care providers are now offering warranties on surgical procedures, similar to those you may have on your automobile or flat-screen television. These warranties cover avoidable post-surgical complications such as infections or blood clots. Material-related defects such as a replaced joint are considered a manufacturer’s defect related to the implanted part and are not covered. (In that case, it’s back to the lawyers.)

Providers are increasingly looking at surgery warranty policies not only as a way to increase customer satisfaction, but also to distinguish themselves as a superior provider. Patients may feel comforted in two ways – a guarantee of top-level care and a predictable cost.

If you have a choice between providers and are able to choose one who guarantees their work versus one who does not, whom would you choose? If the costs are similar, you would certainly prefer the warranty, and you may even be willing to pay a premium for that service.

However, the goal is not to be able to charge premiums. It is to simultaneously lower costs and provide superior service. When warranties are available, they are included as part of a bundled set of services negotiated between the health care system and the insurer.

This system has another built-in cost incentive. The care providers have an even greater economic incentive to make sure that the risk of problems and complications is kept as low as possible so warranty work is not redeemed. This keeps the caregivers’ productivity high and their income more constant and predictable.

Insurance policies that include warranties may be available through private insurance, Medicare, or employer-based plans. Employers who have surgical warranties can (and do) use these benefits as one of their recruitment tools.

Different warranties will have different limitations and exclusions, but there are three main criteria that will be common to all surgical warranties:

  • Preventable and Related to the Procedure – As with almost any warranty, the post-surgical complications must be related to the procedure and considered avoidable on the part of the hospital.

  • Time-Limited – Warranties are usually for 30-90 days, because almost all complications that are directly related to the surgery should be evident by that time.

  • Same Treatment Facility – The follow-up care and treatment under warranty must be performed at the same care facility where the initial surgery was performed. Otherwise, the warranty is invalidated.

Warranties are not a panacea for surgical procedures. Currently, they are limited to a few surgical specialties that are the most suitable for this type of arrangement, which are typically joint replacements (knee and hip) and certain forms of heart surgeries and cancer treatments.

Even with these limitations, surgical warranties are gaining in acceptance – and if they result in simultaneously lowering costs and improving patient outcomes, expect to see greater availability of surgical warranties in the future.

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