From Tom's Desk
Don't Screw It Up.
According to insurer’s own internal studies, under managed care programs, such as Medicare Advantage and managed care Medicaid, patients who pass away after enrolling in a hospice program save insurers an average of $20,000 in care costs over their lifespans compared to those who did not enroll.
Based on my personal total-risk experience, twenty thousand dollars per patient significantly understates the savings generated by an excellent hospice program, despite the most recent reliable objective data,
Nevertheless, more and more insurers are constructing their managed care contracts to include hospice as a “carve-in.” That is, agreeing to retain the hospice patient and their risk-adjusted payments in their risk pool in exchange for agreeing to fund hospice services out of that pool, much as they would pay for any other healthcare expense. These end-of-life patients are at their peak capitation due to all their serious medical conditions, the thinking goes, and as the patient-imposed care limitations associated with hospice enrollment deeply cuts costs, significant additional net revenue can still be realized even after hospice costs themselves are deducted.
This is not necessarily a bad tactic—but beware.
The true value in hospice services is in the value that skilled end-of-life care provides to the patient, not in simple dollar savings. Begin seeing hospice as an expense and the next thing you know you’re reflexively looking for ways to cut it’s cost. At the end of this process lies a shell of service line, cut to the absolute regulatory limit—providing little value to the patient and less cost savings.
Next thing you know, hospice services are being even more underutilized and your end-of-life costs soar—far above any value realized by holding on to a few months of even the highest dollar capitation.
Hospice carve-outs work. Done well, they save the system money and nurture the patient and their family.
They are everything excellent healthcare is supposed to be about.
Regardless of whether you're an insurer, organization or clinician, if hospice "carve-ins" become part of the discussion, just say no.
The problem with hospice isn’t costs or lost revenue. It’s that they’re not nearly used enough.
Fix that problem and everybody wins.