10/27/2014

#78 Medical Warranties (2003)

All Rights Reserved © 2003 Thomas W. Day

You might be of the delusion that companies offer warranties on products out of the goodness of their hearts. You might as well believe in tooth fairies or honest politicians. Product warranties are clinically determined based on product design, expected product use, and product and consumer life expectancies. Once the expected failure rate is calculated, the cost is added to the price of the product and that prediction is tracked to tighten up the process for the next generation of products. Really large and competently managed companies (of which few reside here in the United States) get so good at warranty calculations that they often spend exactly what they anticipated spending in warranty costs at the end of a product lifetime.

Doctors, especially American doctors, suffer the delusion that they are scientists and professionals. Very little about the medical profession reflects either science or professionalism, however. Doctors fling medicines and medical procedures at their customers with almost no honest justification and if a customer were crass enough to ask for a warranty on the success of a procedure, no one would be surprised at the negative reaction that would come from physicians.

Why is that? You’d think there would be some history of the success rate of medical practices. Using the corporate model for warranty generation, a hospital ought to be able to offer a patient a warranty on the effectiveness of a procedure. It’s not like doctors work cheap, for so little profit that they couldn’t put some of their own money at risk against a patient risking his life on the doctor’s competence and honesty. You’d also think that insurance companies would insist on procedure warranties. Supposedly, these companies are so close to the financial breakeven point that they are constantly lobbying politicians for protection from their customers and tax breaks for their hard-pressed and over-worked executives’ salaries. Rather than passing all of the expense of procedures that are fumbled, unnecessary, unreliable, and/or downright ineffective, why not make doctors put their money where their mouths are? Doctors aren’t famous for taking responsibility for their profession, so don’t count on anything useful coming from that pack of pampered PhDs and “specialists.”

In some hospitals, doctors are so arrogant that they force administrators to pay them more than 100% of a procedure’s total cost to perform a procedure. Yep, I mean that a doctor might receive, say, $60,000 for a $55,000 surgery. So, the hospital loses a few thousand on every operation but makes up for it in quantity and government subsidies.

Talk about arrogance!

Not only don’t doctors offer warranties on their work, they want to be paid more than they earn. If there was ever a system out of control, US medicine is it.  I propose a fix for this broken machine. To receive Medicare, Medicaid, or any other government financed funding, hospitals (and their over-priced employees, doctors) should be forced to offer warranties for their procedures.

Worst case, hospitals come up with ridiculously short warranties and patients have the information they need to decide if the pain and suffering caused by a procedure is worth the miniscule likelihood of a positive outcome. By a warranty, I mean a warranty: if the procedure fails to cure the symptom within the warranty period the hospital will either refund your costs or provide an alternative therapy at no cost.  For example, you discover you have lung cancer, after a lifetime of sucking on cancer sticks. Your doctor offers three possibilities; 1) surgery and chemotherapy, 2) radiation, or 3) you take the rest of your life off and party till you drop. The warranty on option #1 is three months. The warranty on option #2 is two months. The warranty on option #3 (your life expectancy with no medical intervention) is six months. Of course, the doc will tell you that if either #1 or #2 is successful, you could have years of life left to enjoy. However, the doc doesn’t have enough data, confidence, skill, or the guts to put his own money on the odds that either procedure will be successful. If he isn’t willing to risk a little cash, should you be willing to risk your life? That’s for you to decide, but at least you’re deciding with some information to work with.

Would you buy a car that came with no warranty? Would you spend $40,000 on a product that was presented as a “buyers beware” purchase? I doubt it. But patients give up everything they own, on a regular basis, for medicines and procedures that have the kind of performance records that would deserve the old “90 days or 90 feet, whichever comes first” used car warranty. I say we should stand up for our rights as consumers and say “we’re mad as hell and we’re not going to take it anymore.” People who spend their own money on perfectly useless medical treatments have that right, but if a doc wants to take the government’s money, he ought to have to prove that he knows what he’s doing by offering a normal amount of assurance to his customers. If it works for the government, and they are providing about 80% of the investment currently being mismanaged in medicine, insurance companies will follow. After a few years, only quacks would be warranty-free and medicine would have taken a big step toward becoming an honest profession.

November 2003

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