From Tom's Desk

Hospice Works.
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.

You Should Know...

Don't Let This Happen To You

After a year and a half in the wilderness, Cigna received the green light to market it’s Medicare Advantage plans again.  Unlike many other insurers facing regulatory scrutiny over fraudulent data submission, Cigna’s problem was attempting too much top-down cost control that fell outside  CMS regulations.

The resulting sanctions cost Cigna significant growth and acquisition opportunities.

I don’t have a sense that Cigna is any more or less likely to risk-share with its primary care clinicians—but it’s clear that when they did so, they didn’t trust the systems they put in place to generate cost savings for them or value for their patients

Imagine a different world.  

A world where Cigna decided to spend money nurturing and educating its primes rather than relying on dictating care eligibility and med utilization through prior authorizations and pre-certs.

Imagine that world—and compare it to where Cigna is now.  Deep in the hole, playing catch-up as they compete for market share and covered lives.

Perhaps the organization has learned its lesson. If so, it will be a formable competitor going forward.

If not—well at least you can learn from their mistakes.

High-Value Insight

A patient walks into your office with an obvious DVT (ICD-10 I82.4xx, HCC 108. RAF ~ 0.3).  You’ve got the Lovenox on hand. Your nurse is ready to educate and administer, the script is ready for the pharmacy who you know will have it in stock.  Your'e ready to deliver high quality care efficiently so you and your patient can reap the reward.

There’s one thing missing—the ultrasound.

Your supporting organization is still delivering healthcare using an industrial “just-in-time” model.  It costs money to keep a tech on call. The only way you can get a venous doppler is to send your patient to the emergency room, incurring all the (should-be) avoidable costs to you and your patient.

The answer?

Use this evidence-based algorithm based on this risk table, both of which are extracted from this article. That way, you can safely institute treatment (if indicated) while still waiting for imaging to be available at the time that’s the most cost effective for you, your organization and your patient.

If you work for an organization, bring this algorithm to them and have them endorse it. If you work on your own, begin a file of similar best practices for conditions that you determine are your most common cost centers.  Make “following” them the official “policy” of your practice.

Once you figure out that with shared-risk you’re not a slave to a “treat ‘em and street ‘em” productivity schedule, all manner of efficiencies will occur to you. You can take the time to address them while not worrying how you're being paid to do so.

And you’ll find yourself starting to think like a clinician again.

Q&A with Dr. Tom

Crowd-Sourced Innovation

What technology do you use most frequently to help you deliver care most efficiently?

You Tube.

And the patients love it.

From simple education to full blown physical therapy, the visual power and unbranded authenticity of social video effectively transmits information to your patients without the stress or distraction of visiting a therapist—and without the copay or the deduction from your pool.

Example. I used to send patients with certain types of chronic dizziness to see a physical therapist for vestibular rehabilitation—no longer.  Armed with the best videos,  which I personally curate, and the knowledge that I’m getting paid in cost savings, I can educate the patient more effectively, with more credibility and a higher chance of compliance—all at a lower social and financial cost to both the patient and myself.

I have an entire stable of videos that I use for a variety of educational issues.  I select them for specific patients based on ethnicity, culture background, educational level.  With new ones coming out by the minute, I continually improve my options by periodically culling the ones I am not quite satisfied with.

There is enormous true value to be had in the connected knowledge of social media--at very small effort.

Curate a video list and tailor it to your patient’s need

Your patients will respond to the authenticity of your efforts and the authenticity of videos free from corporate branding with increased compliance with your recommendations. 

There's a reason why more folks watch You Tube than TV.  Given the choice, people like to watch people like themselves. And we no longer trust large organizations the way we used.

Unleash the power of influence by similar other.

Your patients will love you for it.