Hospice and its role in the health system

The WSJ has a piece focusing on the increasing use of hospice among Medicare beneficiaries with dementia that observes that the long stays of such patients has increased the cost to Medicare as compared to the shorter, more predictable stays by persons with cancer, for example.

Between 2005 and 2013, about 107,000 patients received hospice care for an average of nearly 1,000 days spread out over four or more calendar years, according to a Wall Street Journal analysis of Medicare billing records. They cost Medicare 14% of its overall hospice spending, even though they accounted for just 1.3% of its hospice patients.

Undoubtedly true, but what does that mean?

Here is a paper published 12 years ago noting the problem of the poor quality of life of patients dying with dementia, and suggesting that hospice could care for patients with more than just cancer. We addressed one problem (poor quality of life for those dying with dementia) and created another (longer stays in hospice for patients with dementia). And the cost issue that is the hook of the WSJ piece has always been paramount for hospice because it was sold in the early 1980s at least partly based on its ability to reduce costs as compared to normal care, which has been shown to be the case for more traditional hospice users (but not for very long users). Cost is a fair metric, but why should hospice be the only part of the Medicare program expected to improve quality of life and save costs? That is quite a standard.

The problem that is missed in the WSJ framing is that the United States does not have a coherent long term care financing approach (there are echoes of this in the story–but it is the most important thing to understand about this story in my opinion).

Families self finance LTC with their wealth and time, and when there is no more wealth, Medicaid pays for the elderly to live in a nursing home until they die. There are myriad problems with this approach, and Medicaid pays for about half of all nursing home days in the United States. The lack of a coherent LTC system in this U.S. shows up in all sorts of places–long hospice stays, readmission rates, persons in NHs when they could be cared for at home, etc. and we try to fashion fixes for these ‘canaries in the mine’ that miss the underlying problem.

Long periods of hospice use for home based patients with dementia (and other diseases) are more directly signals of the lack of a coherent LTC financing approach. The WSJ highlights such a patient:

Helen Blincoe, a 100-year-old from Loma Linda, Calif., bounced in and out of hospice care from 2009 until last year. Currently, her main health problem is dementia, and she is in relatively stable condition. On a recent day, she sat upright in an easy chair, her walker nearby.

During the nearly 850 days she spent in hospice care, her services consisted mostly of visits by home-health aides. Nurses and social workers also saw her, but less frequently.

Hospice was not envisioned for an 850 day stay. The country has most certainly not envisioned how 70 year old daughters care for their 100 year old Mother who is a widow. I will go out on a limb and say that the hospice care paid for this person is almost certainly the most valuable thing the Medicare program could pay for on her behalf. The fact that her care doesn’t fit into the Medicare hospice benefit and that there is not a ‘high touch, low tech’ LTC benefit shows that Medicare’s benefit package doesn’t cover what is most important for many of its beneficiaries.

What to do? A preferable approach would be flexibly provided support that enabled patients to stay in their home, likely reimbursed at a lower per diem rate than what hospice pays per day. Covering what I call “high touch, low tech” home based services are what many elderly persons need, and past work we have done at Duke suggests Medicare beneficiaries would be willing to forego some medical treatments to get such care.

Hospice isn’t perfect, but the most obvious warts are at least partly driven by having the health insurer of elderly persons in the U.S. not cover LTC. We need to address this problem head on.

 

 

 

January 1, 2016: Huge Day for Medicare End of Life Policy Changes

January 1, 2016 will be a huge day of changes for Medicare end of life policy. As noted earlier, Medicare will begin paying for advanced care planning and will begin a concurrent hospice care demonstration on New Year’s Day. We now know that on the same day the program will institute the most consequential change in Medicare hospice payment policy since the beginning of the benefit in 1982:

• Medicare will move from a straight per diem base payment for hospice, to a two-tiered base payment of $187.54/day for the first 60 days in hospice, with a lower payment of $145.15 for subsequent days (column 6 below from August 6, 2015 Federal Register).

Section 1814(i)(6)(D)(ii) of the ACA required the Secretary of HHS to consider a new payment methodology for hospice, and the primary discussion by MEDPAC and others had been the development of a so-called “U shaped” payment approach that better matched the differential intensity of care across different links of hospice use. The primary goal of the payment changes seems to be better alignment of the payment methodology with the actual resource use of hospice providers, with tremendous interest in reducing very long hospice stays that many view as fraudulent, or at least not in keeping with the best use of hospice. However, very short hospice stays are also a problem.

The actual payment change is simpler than a U shape payment would have been (higher in the first few days and the last few days and lower in the middle) approach suggested by MEDPAC, though they have publicly supported the change as a first step.

My guess is that it won’t be 3 decades before the next hospice payment approach change is announced by Medicare, and that we are likely entering a period when change is relatively common. I hope we are also going to be clear about policy goals, and collecting data to inform evaluations of same.

CMS Concurrent Hospice Demo

CMS has announced the hospice concurrent care demonstration that I blogged about in March 2014. The big idea in concurrent hospice care is that people can receive services from a hospice provider without having to “unelect” curative treatments, which has been required to receive hospice since 1983. Concurrent palliative care was one of three “non covered” benefits that around half of Medicare beneficiaries said they would fund via reductions of other care in some of my past work. This is not exactly that, however, because the demo announced yesterday requires that a patient be hospice-eligible, which means a physician certifies they are likely to die within 6 months.

A few thoughts on this.

• Cudos to Medicare for innovating. In hospice, Medicare has always led the way, and will do so again. Further, over 8 in 10 people who die annually in the U.S. are Medicare beneficiaries, so getting end of life care straight in Medicare is key.
• The biggest limitation to the demo is the fact that patients must be hospice eligible (a physician must say they are likely to die within 6 months). I would prefer to see a concurrent demo that attempted to push further up the disease course, say to the last 12-15 months of life.
• Because a patient is hospice eligible, the $400 payment that hospice providers receive per month, is less than what they would receive in roughly 3 days of providing full fledged hospice care (after unelection of curative). Since the patient is able to continue receiving curative care, the notion is the services provided by hospice providers will be less intensive. However, my read is that the hospice is on the hook for delivering all of the hospice benefit. One thing to watch in the evaluation: how many patients start this and later stop the hospice concurrent care demo because they want more care than perhaps the hospice planned to provide (I think most hospice providers will do phone based monitoring, but we will see what happens).
• In one sense it is surprising so many hospice providers applied. There was much grousing about the low payment and fact that providers have to be prepared to deliver the full hospice benefit. However, I think many thought they needed to be involved in such a demo, and the general concept of concurrent care is the way most who look closely think this end of life care should go.
• Another key metric for the demo will be conversion rate of patients who start this demo into full-fledged hospice. In one sense, why would they? However, hospice providers will have lots of incentive to get them to do so, both due to payment and their normative belief that what they do is best for dying patients.
• The evaluation design presents lots of interesting opportunities. Demo hospice providers, hospices who wanted to participate and weren’t selected, and other providers. Non experimental inference is key for policy research and this will be an interesting one from a methodological perspective.
• We have a CMMI demonstration of early palliative care (further up the disease course) with Four Seasons Hospice and we are attempting to evaluate the impact on quality and cost to Medicare of this model (CMMI billboard May 16). The announcement that Medicare will begin paying for advanced care planning in January introduced an intervention into our control group, and maybe even the demo. There there is another new intervention to be accounted for.

Impact of hospice on costs for patients in Nursing Homes

A new study by Pedro Gozalo and colleagues from Brown finds that Medicare beneficiaries who die in nursing homes have less intensive treatment in the last year of life, but the overall cost to Medicare of their care in the last year of their life, is higher.

Some key bullet points and issues:

• What did they find? Hospice was associated with less hospitalization and fewer ICU days during the last year of life, but higher overall costs incurred by the Medicare program (around $6,700 more).
• What didn’t they study? The impact of hospice on quality of life of the patients (at least directly; you could normatively infer benefit from less ICU use and hospital days; they discuss this), or families. However, they were using Medicare claims that don’t measure such variables.
• What is new about the study? They use a clever, three part counterfactual strategy to identify the impact of hospice on costs. A key issue in observational assessments of the impact of hospice on cost is that persons who choose hospice differ from those who do not. Past work (our study from 2007; Amy Kelley’s from 2013) has used cross-sectional matching using observed variables to identify the most relevant comparisons to hospice users in order to isolate the hospice impact. Gozalo et al. use traditional observed covariate matching as well (part 1) but within a difference-in-difference approach (part 2) that takes advantage of secular trends in hospice use from 2004 to 2009 (much more likely later) to isolate the impact of hospice on Medicare costs. In short, there are decedents in 2004 who did not use hospice who would have done so under 2009 rates, and vice versa. This allows for isolating the impact of hospice on costs in 2009 on persons who were “new” users due to increasing use rates as compared to those who would have used hospice even without an increase. The same comparison is done in 2004, and the difference in the difference provides the estimated impact of hospice on costs. Finally, because all the subjects lived in Nursing Homes (NH), some variables like DNR or do not hospitalize orders that are unobserved but important are available for matching (part 3).
• Who did they study? All subjects lived in Nursing Homes. This is a key contextual variable, and one that is missed if you say “this study shows hospice increases Medicare costs” because it is found to increase Medicare costs only among persons who died in NH. Most persons receive hospice in their homes, but the subgroup of those receiving it in NHs may be key from a cost standpoint.
• Around 6 in 10 subjects had dementia, the disease associated with the longest period of hospice use in this as well as past studies. This is largely due to the unpredictability of death (as compared to other primary diagnoses) and does not invalidate the study by any stretch, but it helps to highlight the study patients. The hospice benefit has had a per diem payment that was not modified by diagnosis since its inception in 1983. The general trend toward increasing use of hospice, which has meant an increase in dementia as a primary diagnosis, along with a related increase in hospice length of use for dementia that has been widely noted, really signals that a disease specific hospice benefit may be needed if cost is a concern.
• Last year of life costs are an easy concept to grasp, but may not be the best way to assess the impact on hospice on Medicare costs. The limitations of cross-sectional propensity score matching such as what I and colleagues used in a 2007 paper deserve to be noted (Amy Kelley et al added covariates, but has the same general problem), but the focus on measuring cost of cases (hospice) and controls (not hospice) from the point of hospice initiation until death strikes me as a more precise means of estimating the impact of hospice (regardless of how the counterfactual used to identify cases and controls is constructed). Further, the savings identified in past work accrues primarily in the last few weeks prior to death, and it seems conceptually suspect to infer that something used for 90 days should reduce cost over the last 365 days of life. It is a fair point to say that in our paper as well as Amy Kelley’s, all cases of hospice do not match to “statistically good” controls but Medicare has to pay for the care for all patients, but the same can be said for the new paper as well. Pedro and colleagues rightly note that the last year of life is a commonly used time frame, but that doesn’t do away with this conceptual issue. It is an interesting conceptual discussion about the appropriate dependent variable for such a study: full last year of life costs or costs from the date of hospice initiation until death. To push it ahead, I would just like to see more analysis. Pedro and colleagues could update their estimates using the approach that we used and that Amy Kelley etc followed–measuring savings (or not) from the onset of hospice to death and assess their cost findings.

This is an important paper with a very clever estimation strategy, that deserves to be discussed, technically and conceptually (especially my last point above), as well as for what it might mean in terms of policy adjustments. I will have some thoughts on this in a follow up post.

IOM report “Dying in America”

The Institute of Medicine yesterday released its report “Dying in America: Honoring Individual Preferences Near the End of Life.” It is a 500 page report with lots of interesting and relevant information, and it suggests many avenues for improvement. One key theme that comes through is the call for a focus on individual preferences near the end of life. The study that we recently published in the Journal of Clinical Oncology is directly relevant to this conversation.

This report is plainly, and comprehensively written, and I think its publication signals the end of our long, national stupid that began when a proposal in the ACA to pay for advanced care planning was termed “death panels.”

CMS Revises Part D/Hospice Guidance

CMS today revised its guidance on procedures related to determining who pays for pharmaceuticals used by Medicare beneficiaries who elect hospice care. A hospice is responsible for paying for all drugs related to the terminal illness under Medicare regulations, a fact that was never in disupute conceptually. However, the March 2014 guidance that was aimed at ensuring that Medicare was not “double paying” for drugs (which would occur if Part D plans were billed for drugs that should be financed via Medicare’s per diem payment to hospice providers), had lead to gaps in the prescription for pain and other medications as patients trasnitioned from normal care into hospice, leading some patients to disenroll form hospice, or to needlessly suffer.

Specifically, the new guidance reduces the classes of pharmaceuticals that Part D plans must require prior authorization prior to filling once patients elect the hospice benefit in Medicare. These drugs groups: pain, anti-nauseants, anti-anxiety and anti-consitpation medications are they are groups of drugs that are almost always  a part of a hospice patients care regimen due to the common end of life symptom of pain, and dealing with the side effects of addressing pain using pharmaceuticals.

This is a common sense tweak to of a rule to address an unintended consequence of a legtitmate effort to ensure that Medicare does not double pay for drugs.

CMS proposed hospice payment rule for FY 2015

CMS released their proposed hospice payment rule for fiscal year 2015, yesterday. Highlights:

• 1.3% increase of hospice per diem payments
• proposes clarifying the “terminal illness” requirement to elect hospice. The primary change would be to allow for consideration of patient functioning/co-morbidity in determining eligibility as opposed to a singular focus on prognosis
• proposes setting a 3-day time limit by which a patient must file notice of “hospice election” which means they are un-electing “curative” care that is covered by Medicare. The current standard requires “timely” notification, and in some cases that has taken up to 10 days. The point is that Medicare can be paying for both hospice and “curative” care during this interval which would now be formalized.
• files notice to clarify what physician is the primary medical provider for billing purposes (to be defined by the patient/decision maker). In the past, multiple physicians have billed as the primary medical provider.

The payment update is straightforward and is most notable for what it is not (a re-basing similar to home health, or a u shape payment with higher payments earlier and later in a stay, but lower in the middle). The other items are a series of policies that could be understood as pre-cursors to more fundamental reform (clarifying what physician is viewed by the patient as their primary doctor, and setting a clear period of time by which notice of hospice election must be filed). Further, the quality reporting requirements for hospice that were brought about by the ACA will be coming online this year, which is a key component for evaluating future payment policy changes; a baseline will be collected this coming year. The most interesting aspect of the rule for me is the clear statement of importance of palliative care, and noting hospice as a subset of palliative care. I am not sure I have seen CMS write about this relationship so clearly in the context of setting hospice policy, and there are many barriers to the financing of palliative care in the Medicare program when a beneficiary is not terminally ill based on Medicare regulations.

The payment update will likely get the focus on this proposed rule, but the other items and tenor of the document portend more consequential changes coming down the road, likely including facilitation of non-hospice palliative care.

More on hospice concurrent care

I spent a lot of last week in Washington DC, first at the Hospice Action Network event Tuesday on length of hospice use, and then being a part of the Friday research plenary at the National Hospice and Palliative Care Organization’s (NHPCO) Management and Leadership conference. There was a great deal of discussion of the recently announced CMMI Concurrent Hospice Demonstration program, and it is striking how little understanding there is in the field of exactly what the demonstration entails. A few quick thoughts:

• My understanding of the program as a essentially a test of the “Temel study” in which the $400/month would fund goals of care discussions and some phone monitoring, with hospices then able to bill the hospice per diem if they provided more care is wrong. The language about billing other parts of Medicare under Parts A, B and D seems to refer to, for example, the ability of a hospice to provide social worker care that could be billed separately to Part B. However, it is quite complicated to determine when that is allowable as a one-off, and many hospices are not set up to do this in the first place.
• One key issue in all this is inducement. We have generally spent lots of time worrying about providers inducing patients to receive further services provided by the same providers, but the goal of concurrent hospice seems to actually be inducement at some level (to get people to elect hospice who ohterwise would not have). Some new thinking on this general issue is needed with respect to hospice and palliative care.
• If it really is the case that you get $400/month and essentially are responsible for the entirety of the hospice benefit, then I don’t think anyone will apply for the demonstration.
• At the NHPCO meeting on Friday, an official from CMMI came and talked generally about the demonstration and the hospice benefit and industry. I heard him say fairly clearly that CMMI was open to more discussions about the shape of the concurrent care demonstration should take. Others seem to have heard differently. Some more refinement and discussion is needed.
• Keep in mind that patients have to be eligible for hospice to qualify for the demo, which means they can be certified as having less than 6 months of life. They are eligible to elect hospice at that point, but they have not chosen to do so. It is a good idea for CMMI to try out a new approach that allows for concurrent care for this group of patients to see if you can: (1) improve their quality of life; and (2) potentially increase their likelihood of electing hospice; and (3) potentially reduce costs even in the subset of patients who will not elect hospice. I know many are critical of the focus on hospice-eligible patients only because they believe concurrent hospice/palliative care should be pushed further up the disease course. I agree with them generally, however, but focusing a small intervention on patients who are hospice eligible but who have not elected it seems a reasonable place to start, if a plausible demo can be constructed.
• A key issue is what is it that participating hospice providers will be promising to patients, family members and the rest of the health care system for $400/month?
• Two options to push the conversation: First, hospice providers could describe what they could do for $400/month, and propose that to CMMI. Say clearly, here is what we could do for that. Is that what you want to try? And make clear that the constraint is what can be promised to patients, caregivers and the system. Second, propose a concurrent hospice model(s) for hospice-eligible patients, along with the financial resoruces that it would take to undertake a proposed demo. Simply say, we would love to try this; will you let us?
• I believe that a test of the Temel “early palliative” model that begins with a goals of care discussion, and proceeds with monitoring and information sharing, and integration of the hospice team into big decisions could be a fruitful approach, that is not risky in terms of the amount of money risked. The key is getting a realistic reimbursement level for the delivery of hospice/palliative services. There may be other models to test as well.

I give CMMI credit for rolling out this demonstration. However, I think it really needs to be the beginning of a more detailed discussion to identify the exact nature of what demos will actually be tried, and not the last word on the demo.

Is the SGR so dumb it warrants a gimmick ‘pay for’?

The only thing dumber than the annual SGR/doc fix charade where we lament huge Medicare Part B cuts that we know won’t happen is the debt limit. While I generally favor following paygo, I think the SGR is dumb enough to warrant getting rid of with a gimmick such as counting war savings draw downs.

Lets just start over.

Loren Adler has been consistently saying no, we need to pay for the SGR fix. I respect the position and generally am with him on such matters. However, he has gone even further and said that what I have now termed the second-dumbest thing in Washington (whatever the second dumbest thing is must be pretty dumb) has lead to fiscal restraint in federal health spending, because most of the pay-fors to push out the SGR cuts have come from health care spending. Even further, Loren implies that maybe only the dumbness of the SGR (huge cuts that are politically impossible) has enabled the other changes. If this is true, I just want to take a long nap.

In any event, I asked Loren for an analysis of the degree to which the changes to pay for pushing off the huge cuts that will never happen have been reasonable policy and he said he is working on such a post. I will link it when up.

One worry that I have is that any longer run SGR fix could bring about hospice payment changes that are scored as cost savings because they don’t project a change in behavior, but that might actually change hospice behavior in a manner that actually increases Medicare costs (reduce use in the cost saving range of hospice length of use). I was talking about worries around unintended consequences at yesterday’s Hospice Action Network event on hospice length of stay (I will link the vid when up).[here are my slides PPT_Deck_RCRT_dt3.20.14_shorter]

The difficulty in projecting what might happen to hospice length of use if we adopted a U Shape payment modification of the straight per diem, or perhaps a rebasing a la Home Health from a few years back is that there is no good evidence on changes in use after hospice payment changes. This is because Medicare insures over 8 in 10 decedents each year, and has had a straight per diem payment approach for the entire time. Further, since the hospice benefit is carved out of Medicare Advantage, there is not even proprietary evidence about different payment approaches and hospice. I can find no published study that shows any evaluation of a payment change in hospice in private insurance or in another country. If you know of one let me know.

I think the Medicare hospice benefit needs to be updated. I am worried about unintended consequences, in large part because there is not even clarity about the goals of hospice payment policy change. It needs to be gotten right. I am worried that hospice will get sucked up into a long term SGR pay for, and that the payment change will have behavioral impacts that we have no way to estimate.

Please note, Loren Adler is an excellent analyst. I am not saying he is dumb. His argument makes me reconsider my views of SGR, but as of yet I remain unconvinced.

Focus on Hospice length of use

I will be participating in a panel on Tuesday, March 25, 2014, 9:00-11:30am “The Right Care at the Right Time: An Open Conversation about Hospice Length of Stay” hosted by the Hospice Action Network, the advocacy arm of the National Hospice and Palliative Care Organization (NHPCO). The event will be held at the Columbus Club at Union Station in Washington D.C., but you can also watch via livestream.

Discussion on length of stay in hospice has largely been focused on worries about long periods of use (particularly those over 180 days)–that they may represent fraudulent or inappropriate care. Fraud is obviously a bad thing, but at least some of the long stays may essentially be the hospice benefit morphing into a back door long term care benefit of sorts. This is clearly not what is intended by the benefit, but such needs for patients and families are important, and the lack of a coherent long term care financing system in the U.S. is spilling over into Medicare policy in many places (hospice, readmissions, etc.).

Short stays in hospice represent potential quality problems, and the 25th percentile length of use has been ~5 days for a decade. Spells of use this short prior to death do not allow patients to reap the full benefits from hospice, but the call to increase length of use certainly has a normative tone; the persistence of such short lengths of use may also simply show the preferences of a subset of patients and families.

At the meeting I will present some preliminary work confirming that hospice saves Medicare ~$2,400 per patient after the point of initiation (in North Carolina, for 2009-10 deaths), as compared to matched controls for the same number of days of care/cost prior to death (this link is to many posts on hospice). These findings include the long stays, just as did my past work. Of course if you could get rid of long/inappropriate utilization, you would expand the cost saving potential of hospice. However, the behavioral response of any new change is unknown, and difficult to estimate a priori. The potential for unintended consequences abound, but there is a strong sense (that I share) that the hospice benefit in the Medicare program is in need of updating. Perhaps the most important question is this: What is(are) the goal(s) of hospice payment policy change(s)?