June 2013 MEDPAC report and hospice

Has been released today. Chapter 5 (pp. 117-42) focuses on hospice policy and lays out some information on the ‘shape’ of what a U shaped hospice payment revision might look like. Figure 5-1 shows average labor cost per day of hospice stay (roughly, the variable costs of being in the hospice business), for differing lengths of stay, and the shape and levels are remarkably similar (more intensive care provided at the beginning of an admission, and in the last few days of life).

ScreenHunter_01 Jun. 14 13.29

Moving away from the straight per diem approach that has been used to pay hospice by Medicare for 30 years in favor of one that is designed to flex/track with labor/marginal variable costs across a stay should be fairly straightforward (with the bump ups for last few days obviously retrospectively determined). However, achieving the two-part goal that is often attached to a “u shaped” hospice payment policy:

  • increasing the length of stay for short stays . Worry is patients are reaping full benefits, and cost saving opportunities are being missed.
  • decreasing the length of stays for long ones. Worry is that hospice is being either fraudulently or inappropriately used (it is morphing into a back door LTC benefit)

Neither goal, and certainly not both at the same time, is obviously achieved by a u shaped per diem payment. The two “problems” are really quite different, and policy options to address them need to carefully thought through and targeted.

update: fixed some typos

About Don Taylor
Professor of Public Policy (with appointments in Business, Nursing, Community and Family Medicine, and the Duke Clinical Research Institute), and Chair of the Academic Council at Duke University https://academiccouncil.duke.edu/ . I am one of the founding faculty of the Margolis Center for Health Policy. My research focuses on improving care for persons who are dying, and I am co-PI of a CMMI award in Community Based Palliative Care. I teach both undergrads and grad students at Duke. On twitter @donaldhtaylorjr

4 Responses to June 2013 MEDPAC report and hospice

  1. Brad F says:

    “increasing the length of stay for short stays . Worry is patients are reaping full benefits, and cost saving opportunities are being missed.”

    Can you give some examples? Lets say you extend a stay from 10 to 20 days. Utility gain, patient, provider, and family become grateful recipients of care, but how does the cost go down?


  2. Pingback: More on hospice reduce Medicare expenditures | freeforall

  3. Pingback: January 1, 2016: Huge Day for Medicare End of Life Policy Changes | freeforall

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