"The cost of healthcare in the country is bankrupting the country, and we've got to get our minds around the cost of care," says Chris Van Gorder, FACHE, president and CEO of the 1,323-bed Scripps Health in San Diego. "We need to manage costs much more effectively. The question we always have is, 'Is what we are doing at the end of life the most appropriate thing to do, and the most compassionate thing to do?'
"From an economic and clinical standpoint, the most money spent is in the first five years of life and the last five years of life," Van Gorder adds. Expenses also mount with overtreatment, readmission, and unusually extensive lengths of stay, he says.
End-of-life care also is widely variable in terms of cost. A Dartmouth Atlas study of nearly 3,000 hospitals found significant differences in spending on patients who died between 2001 and 2005 after receiving care. While the Mayo Clinic had the lowest cost at $53,432 per patient, UCLA and New York University had costs of between $90,000 and $100,000. High cost centers also had greater lengths of stay and more procedures, such as doctor visits and consultations.
Although palliative care is seen as cost-effective, the benefit derives not from how much a healthcare institution generates in revenues, but from how it avoids expenses, Van Gorder says. Reimbursements are lagging in palliative care, prompting hospitals to be innovative with their programs, such as taking steps to team up with hospice programs or nursing facilities to curtail costs and reduce 30-day readmissions.
To alleviate the most heart-wrenching and costly aspects of end-of-life care, healthcare executives are increasingly implementing palliative and hospice care programs for chronically ill patients or those nearing death. Palliative care has been shown to both extend life for patients and reduce healthcare expenses. Palliative care programs focus on the chronically—but not necessarily terminally—ill.
Such efforts are growing in popularity as hospitals form multidisciplinary teams who work to care for patients to relieve the suffering, pain, depression, and stress that often accompany chronic illness. Those teams include physicians, nurses, psychologists, spiritual counselors, and social workers. Unlike palliative care, hospice care is focused on improving quality of life for terminally ill patients with a prognosis of less than six months to live.
As many as 90% of major hospitals with more than 300 beds have palliative care programs, says R. Sean Morrison, MD, director of the Hertzberg Palliative Care Institute at the 1,171-bed Mount Sinai Hospital in New York City and director of the National Palliative Care Research Center.
Morrison is a longtime advocate of palliative care and has been one of the most prolific researchers into its impact on healthcare. He has focused on studies of the economic impact of patients facing serious illnesses that he says account for a disproportionately large share of Medicare spending.
In one of his most significant studies, Morrison examined four New York hospitals between 2004 and 2007 and found that the average patient who received palliative care incurred $6,900 less in hospital costs during a given admission than a matched group of patients who received usual care. The reduced costs included $4,098 less in hospital expenses per admission for patients discharged alive compared to non-palliative care, and $7,563 less for patients in palliative care who died in the hospital.
"Every study has shown people survive long or longer when they receive palliative care. It doesn't shorten life; it extends life," Morrison says. "By matching patient goals to treatment and essentially ensuring patient-centered care, we eliminate misutilization and waste."
The number of palliative care programs in American hospitals has grown substantially over the past decade, according to an analysis by the Center to Advance Palliative Care, which advocates more palliative care programs. Between 2000 and 2008, the number of palliative care programs in hospitals with 50 or more beds increased from 658 to 1,486, for a total increase of 125.8%, the center reports.
For hospitals, palliative care is relatively inexpensive, has a relatively low start-up investment, and has increasing ROI potential because of anticipation that more patients—the elderly and those with chronic conditions—may be suited to such care, the CAPC states. Such programs can have an immediate impact on overall resource usage, including ICU utilization, when patients in palliative care decide to steer away from expensive procedures, according to the center.
While the trend for such programs clearly is underway, there still is confusion among physicians, hospital leaders, and patients as they struggle to define exactly what palliative care and hospice care is. Some complain bluntly that there are physicians who don't know the difference and have made little attempt to understand the meaning behind the terms. Some healthcare leaders are describing their elevated care for the chronically ill and dying patients as "advance care planning," which is an emphasis on improved coordination including involvement of the patient and his or her family.