An alternative health-care reimbursement system--application of arthroscopy and financial warranty: results of a 2-year pilot study.

The results of a 2-year pilot study on an alternative health-care reimbursement system are presented. This innovative system includes a 2-year warranty by the providers to protect the insured and insurer from additional expenses. It is based on the advantages of arthroscopy. This system provided access, choice, and affordability for 111 patients from a managed care environment who were predetermined to be orthopedic surgical candidates. The unique features included unlimited free consultations and office radiographs. Payment was made only if a patient had surgery. This single fee included all related physician and hospital charges for surgery and any subsequent service for the next 2 years under the warranty. The profit margin for the providers was based on the application of arthroscopy, which anticipated reduction in the customary hospitalization. Accountability was provided by reporting of surgical indications and incidence. The surgical incidence of 42% was less than what was projected. The health maintenance organization insurer saved in excess of $125,000.00. Both the hospital and the surgeon earned more than under existing reimbursement systems.