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With Medicaid spending ballooning to $381 billion in 2009, states are considering a lot of different ways to decrease costs associated with this program. Some of these ways include reducing payments to providers, reducing or eliminating services not mandated by the federal law, and narrowing Medicaid eligibility criteria. A new study released by Health Affairs though suggests that maybe there is one program that increases services to medicaid beneficiaries while still reducing medicaid spending. That program – hospital based palliative care consultations.

The Health Affairs article, authored by Sean Morrison, Jessica Dietrich, Susan Ladwig, Timothy Quill, Joseph Sacco, John Tangeman, and Diane E. Meier, evaluated whether hospital palliative care consultation teams reduced hospital costs for Medicaid patients in New York State. The authors used hospital administrative data from four urban based NY state hospitals to compare hospital costs of Medicaid patients receiving palliative care consultations to propensity score matched patients who received usual care. The hospitals included a community hospital, two academic medical centers, and a safety-net hospital.

To be eligible for inclusion, patients had to have (1) Medicaid as their primary and sole insurer, (2) hospital stays ranging from six to forty-four days, and (3) at least one of the following advanced diseases:

“metastatic solid tumor malignancies; central nervous system malignancies; metastatic melanoma; locally advanced head and neck cancer; locally advanced pancreatic cancer; HIV/AIDS (with at least one of the following secondary diagnoses: hepatoma, cirrhosis, cachexia, lymphoma, or other cancer); congestive heart failure or chronic obstructive pulmonary disease, with either two or more hospitalizations in any six months of the study period or one or more intensive care unit admissions during the study period; and advanced liver disease with evidence of cirrhosis.” The study also included those who with ICU stays of more than five days, “regardless of diagnosis”

The initial sample included 1,717 patients discharged alive and 495 patients who died in the hospital. The authors were able to match all but ten palliative care patients, who were subsequently excluded from the analyses. Lengths-of-stay between patients who received usual care or palliative care discharged alive (16.9 versus 17.2 days, ) and those who died in the hospital (20.1 versus 19.3 days) were not statistically significant.

Results of the study revealed the following:

  • Patients receiving palliative care consultations had on average a $6,900 reduction in hospital costs per admission.
  • Patients who were discharged alive and received palliative care had an average decrease in hospital costs of $4,098 per admission
  • Patients who died in the hospital and received palliative care had an average decrease in hospital costs of $7,563.

Patients who received palliative care also had lower costs for intensive care and higher rates of referral to outpatient hospice programs. Patients who received palliative care and died in the hospital spent less time, and were less likely to die, in an intensive care unit.

This study is yet another excellent example to use when making the fiscal case for palliative care, however we should not forget that palliative care consultations do far more than save money.  Sean Morrison, the study’s lead author, does a nice job encapsulating this into the following statement:

“Palliative care teams can reduce Medicaid expenditures while ensuring that people get more high-quality care that is also consistent with their goals,” and that “Policy makers should strengthen access to palliative care for seriously ill Americans, and new payment models, such as accountable care organizations, would benefit from including palliative care.”

by: Eric Widera

This Post Has 6 Comments

  1. This is a really interesting and important article that suggests Palliative Care consultations can both improve care and save $.

    I do have some nervousness though not really related to this article, but to a concern about going too far pushing the business case for Palliative Care.

    It does seem true that the business case has been useful in terms of getting a foot in the door in many hospitals.

    But we need to ask if the save money argument is really a long term winning argument for the specialty. Are there unintended consequences?

    For example, what if certain Palliative Services are proven to not save money? Maybe an administrator will figure out that they can cut the chaplain and bereavement support from the Palliative Care team, and still get all the cost benefits with a lower investment. If the case is primarily economic, it is easy to see how a bottom line approach can view these as reasonable options.

    Also, the justification for the existence of most other specialties stems from clinical need and not economics. When a hospital leader is asked why they have a Palliative Care service, hopefully the answer will revolve around crucial patient needs. If the answer too often revolves around costs, it will do little in terms of establishing respect for the discipline.

    In terms of the fascinating GDP graph, it is interesting to speculate how much of that medical spending is doing harm to patients. It must be at least several of the percents.

    The nice thing about the Palliative Medicine approach is that it protects patients from medical services that are much more likely to harm them than benefit them. It is important to emphasize that Palliative Medicine does not exist to save money. It just happens to be the case that when patients are protected from the modern day equivalent of leech therapy, they both do better and cost less.

  2. Spoken like a true geriatrician Ken – focused on the importance of clinical need and not the economic incentives to key stakeholders like hospitals.

  3. I agree with Ken 110% regarding concerns about the business case for palliative care and I cringe a little every time I see this argument.

    However, I might argue that other specialties don't make a business case because they don't have to in a FFS environment that favors procedrues. Our hospital is buying robotic surgery toys instead of supporting primary care – not because robots increase quality and meet patients' needs but because they are shiny and make money.

    The arguement about protecting patients from harmful medical therapy is perhaps the best argument (albeit a little complicated).

    Thanks for posting this Eric.

  4. Sorry if I made people cringe. I really hope that people don't think that either I, or my co-authors, believe that the fundamental reason to develop palliative care teams is because they reduces costs. The reason to promote palliative care is that it dramatically improves quality and enhances patient and family satisfaction. That fact that it does this in a fiscally responsible manner is an added bonus. The message from this paper, and our other work, is that palliative care has a strong business case behind it in a fee for service environment despite not having a robotic procedure _and_ that in providing safe, effective, patient-centered care to our sickest and most vulnerable patient population, we reduce mis-utilization and unnecessary costs. I"m not sure that's a bad message.

  5. A few random thoughts:

    1) The data in this paper speak for themselves. Patients who get Palliative Medicine consultation cost less. As a scientific paper, this work is a very important advance.

    2) How to best make the case for models of care that better serve our patients is something we need to think a lot more about in Geriatrics and Palliative Medicine.

    Our communities tend to feel very strongly that we offer models that will improve the lives of our patients. But feeling good about what we do matters little if we don't succeed in getting our models implemented.

    3) Related to #2, after I wrote the above comment, one of my colleagues (To keep him anonymous, I 'll just refer to him as EW) said something like this to me:

    "Geriatricians have long focused their policy case on how much better our models of care are, and how much better older patients would do if comprehensive models of Geriatric Care were supported. How far has this gotten us? Why is that we only see acute Geriatric units in an extremely small number of hospitals? What multidisciplinary models of Geriatric care are supported by Medicare?"

    So, perhaps those of us who get "nervous" talking about $ savings from GeriPal interventions need to get out of our ivory tower. (BTW, in the history of the world, Sean Morrison has never made anyone cringe).

    4) The number of Palliative Medicine or Geriatric providers who would view cost savings as the primary indication for their services must be somewhere around zero.

    But there are many decision makers in medicine who are more concerned about $, profit, and the size of their bonus than patient welfare. I think most of us have been in settings where we have heard "bottom line" types talk about the cost of patients at the end of life or the elderly as if these patients have no need for care at all.

    So, as we make the case that our services might save $, we do need to keep in mind potential downstream consequences if policy makers ultimately view the $ savings as the primary rationale for our services.

    As Sean suggests, part 1 of the argument to the hospital administrator is the quality of care, clinical necessity, and patient satifaction point. Part 2 is, "and you can afford this service, because the added costs of the team will be likely be compensated by avoiding costly care that does not benefit but harms your patient."

    5) What should be our talking point for the finding that patients who get Palliative Care services cost $5000 less? Here is stab:

    "Palliative and Geriatric Medicine markedly improve quality of life and reduce suffering in persons with serious illness. However, the current reimbursement structures limits the ability of these services to help patients. We now know that patients who get Palliative Medicine in the hospital save the health system around $5000. We have a moral obligation to take these savings and reinvest them in services that improve health and quality of life for the seriously ill—such as better caregiver support, palliative management of disability, extension of hospice and palliative medicine beyond those meeting current prognostic criteria….."

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