Patient Engagement I

Geisinger’s Refund Promise: Where Things Stand After One Year

Article · January 12, 2017

When Geisinger Health System first proposed an initiative to refund money to patients who reported a poor health care experience, many hospital executives and physicians balked at the idea. As Chief Patient Experience Officer for Geisinger, a position I share with Susan Robel, RN, Chief Nursing Officer, I have had a unique view of how the refund promise rolled out and what we have learned in the year since its inception. For institutions contemplating a similar approach, the Geisinger experience may serve as a useful roadmap. I would not deceive anyone by suggesting that our approach has not been disruptive. However, I maintain that it has been disruptive in a positive sense: it has reoriented the patient as the center of the enterprise.

Objections to the refund ranged from the pragmatic to the philosophical: How can a patient truly assess what is a good experience while being treated for a complex condition? Will hospitals with small operational margins be at risk for financial ruin? Can most patients be trusted to not take advantage of a blanket promise to return copayments or forgive deductibles? Will a refund expose how truly inadequate the services provided to patients have been? How will insurers react? Is it legal? How can one hope to manage the conflicts that will arise?

Geisinger, led by a new CEO, Dr. David Feinberg, asked a different question: How can a health system that commits itself to the compassionate care of patients and families NOT return money to those who feel that they failed to receive the very service that they were entitled to receive? In November 2015, Dr. Feinberg announced that Geisinger would return money to patients who complained about their care as part of the system’s ethical obligation — no questions asked. The announcement represented a firm commitment to the entire population served by Geisinger — a population of nearly 3 million — to honor the system-patient relationship.

The practice of medicine has always had a financial and business component. The first time a patient exchanged durable goods with a physician for medical advice, a contractual event occurred. What has fundamentally made this financial reality different from others is that the patient-physician relationship is based on a professional “oath” rather than a contract. Consequently, a somewhat uneasy truce developed among practitioners, hospitals, payers, and patients. The refund promise simply recognizes the financial sacrifice that patients make in order to receive the care that they need.

Development and Implementation of the Geisinger Refund Program

In the spring of 2014, patient experience (PX) leaders at Geisinger began to envision a strategy to take the system’s performance to the next level. Under the leadership of CEO Glenn Steele, MD, a well-established leader in health care innovation, a system-wide initiative was announced to remind employees of the defining characteristics of a Geisinger worker; specifically, all employees were expected to be genuine, attentive, communicative, and accountable. At the same time, the PX team first proposed the concept of “ProvenExperience,” modeled after Geisinger’s well-known ProvenCare project.

Under ProvenCare, surgical procedures are hardwired with best practice guidelines, with the goal of 100% compliance. Moreover, if complications occur after a service has been provided, Geisinger incurs the extra expense of care — for instance, extra hospital days. Often referred to as a warranty, the concept places financial risk directly back on the health system. Employers and insurers were intrigued by the ProvenCare concept when it was initially proposed, and early analysis showed clinical benefits, including a reduced mortality rate, for the first procedure studied — cardiac bypass surgery.

Given the success of the ProvenCare initiative, PX leaders hoped to use a similar approach in the realm of patient satisfaction — that is, hardwiring best practice guidelines into patient services, with a goal of 100% compliance. To that end, ProvenExperience was designed to ensure improved communication techniques, best nursing practices in rounding, professional dress, leader accountability, and, finally, performance transparency. The refund concept associated with ProvenExperience was the logical analogy to the warranty-like promise of ProvenCare.

In a number of small forums, Dr. Feinberg floated the idea of the new promise and received positive feedback. On November 10, 2015, at an executive session of the Press Ganey National Client Conference, Dr. Feinberg made the promise definitive, and PX leaders considered that moment to be the “live” date for the refund promise. Moreover, in conjunction with the refund promise, a pilot study involving the use of a smartphone application was initiated, allowing selected Geisinger-insured patients undergoing back or bariatric surgery to report their experience and potentially request a refund.

The pilot was successful, and a small percentage of patients requested refunds and were permitted to suggest payment amounts less than the full deductible. A phrase was coined and added to the application: “You placed your trust in us, and we place our trust in you.” This phrase expressed Geisinger’s response to those who feared that patients would abuse the program by asking for significant refunds for insignificant disappointments in care.

Lessons After Year One

One year after the program’s inception, a number of lessons and financial impact data can be reported. Several hundred requests for refunds have been processed to date. The total refund request for the year was approximately $500,000. Over the first 9-month period after the program launch, the monthly average for ProvenExperience adjustments (i.e., returned copayments, forgiven deductibles) was about $30,000. It is important to note that similar financial adjustments had routinely been offered prior to the promise in an effort of service recovery and that Geisinger did not see a substantial spike in financial adjustments. While it is true that what previously had been simply permitted was now actively promoted, it should be stated that the promise is not, and was never intended to be, a marketing measure. Given the multibillion-dollar revenue intake of Geisinger Health System, the refund has had a relatively low financial impact on marginal return. It is too early to comment on litigation rates or other critical metrics.

PX leaders understood their obligation to respect the fiduciary requirements of a nonprofit health system. As our patient liaisons (system representatives charged with resolving patient complaints) began to address complaints and requests for refunds, they experienced instances of moral distress. If the reason for the refund request was minor and the amount of the refund was significant, an uncomfortable sense of an “ethical breach” would be shared by the liaisons with PX leaders. In an effort to mitigate such moments of distress, guidelines were established to assist advocates in processing refund requests: the requests could not be retroactive before the start date in November, differences of opinion in the medical diagnosis and treatment were not applicable, and complaints about the overall cost of care did not apply. These guardrails on the refund promise shared a common “launch and learn” pathway.

More recently, a 2-month interval between the delivery of care and a request for a refund was proposed. The liaisons were directed never to question the patient’s “perception” of care or to impugn the patient’s motives. However, they were directed to inquire into the details of the service failures, to address accountability, and to aid in the effort to improve the overall process of care. As a consequence, the relationship between the PX department and the team members involved in risk management was significantly enhanced. Team members needed to routinely communicate in order to differentiate between quality- and risk-related concerns and service- and hospitality-related failures.

Now, a year after the initiative began, we have learned that “making it right” for patients following service failures has increased the amount of grievances received, has cost a relatively small amount of dollars in relation to the system’s budget, and has added to the overall process of care improvement as problems in service delivery have been discovered and addressed. Geisinger remains committed to keeping its word to patients by staying focused on compassion and hospitality. Safety and quality are never to be compromised, but attention to the kindness extended to patients and families is a fundamental part of the overall mission of the system. I hope that other hospital systems learn from our experience with the refund promise and take steps to disrupt the “status quo” by offering the same to their patients.

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