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Tuesday, August 2, 2011

More reasons why Medicare costs are too high: hospice care is grossly overpriced

Care of the dying is one of the most important jobs that a physician or nurse can have. Death, like birth, is a momentous and sacred transition, and good care can give peace and comfort to the patient as well as to his or her family and friends. The dying process is often painful and frightening and good, knowledgeable support can alleviate suffering for all involved.

Hospice care has evolved since its inception in the 1400s to embrace support of the dying both in designated facilities and in patients' own homes. Once a patient and his or her doctor have come to accept that a disease is terminal and that death is imminent (usually 6 months of expected life left) hospice care can usually be arranged to allow a patients last days or months to be as pain and anxiety free as possible, providing caregivers with the help and support they need. Hospice services usually include home visits by nurses and nurse's aids, medications for symptoms control, social worker visits, grief counseling, medical equipment needed for home care and coordination of treatment with the primary physician. Studies have shown that not only are patients in hospice care less expensive than ones with the same diagnosis who are treated with standard medical and curative care, but they often live longer.

Hospice providers are either non-profit organizations or, more commonly now, for profit agencies. Hospice care has gotten increasingly more accepted as physicians and patients have moved away from squeamishness about discussing and planning for death, and now costs Medicare over 12 billion dollars annually. That care, though, according to multiple studies, saves the American taxpayer lots of money compared to treating those patients with aggressive but ineffective treatment aimed at curing their disease.

It all sounds great. So what's the problem?

Hospice care is incredibly and unnecessarily expensive. How expensive? Really expensive.

A hospice patient of mine was alarmed when she saw a statement of what Medicare had paid for her hospice care and showed me her data. She had been placed on home hospice due to a chronic and progressive condition that appeared to be likely to result in her death. After several months of hospice, it became clear that she was, though very sick and incurable, stable and not yet dying. Hospice was discontinued, and she became a curious consumer. Hospice charges a monthly fee for their regular services plus hourly charges for visits by nurses, aids or therapists. Medicare paid her (for profit) agency between $7000 and $9000 monthly for this woman's hospice care. This consisted of a basal hospice fee of over $5000 plus visits by nurses charged at $191 per 15 minutes and nurses aides at $112 per 15 minutes. Nurse's aides usually make no more than $15/ hour in any job they can get, and nurses might make as much as $35/ hour if they are lucky.

This is just way too expensive. And it is positively ridiculous that Medicare pays this amount.

My patient also showed me an account of how much she spent on a private nurse after hospice was discontinued. For about the same amount of time that hospice had spent with her she had shelled out about $230 in a month.

The whole idea of hospice is that care aimed at symptom relief frees the doctor, patient and family of the need to engage in complex medical care that doesn't improve quality of life. This can be a creative and much less stressful type of medical care, with a very focused agenda. It involves very little expensive technology. It is, at its core, not very expensive. Where is all that money going? I'm not sure.

Cutting payments to hospice would lead to outraged wailing and tooth gnashing, and yet hospice astronomically overcharges for their services. We are very dependent on hospice availability at this point since the alternative (aggressive medical care at the end of life) is both more expensive and less effective.If threatened with a significant reduction in payments, many hospice providers would probably cease to do business, leaving us in a lurch.

This is yet another situation in which third party payment has resulted in costs far beyond what a reasonably prudent consumer would agree to pay. Awareness of the problem by physicians and patients can be powerful, but the very fact that such ridiculous excess is occurring so blatantly shows that something is very wrong with how Medicare and other insurance companies reimburse for services, undoubtedly resulting in many billions of dollars of true waste.

I am truly thankful for the kind and compassionate care that various hospice organizations have provided my patients over the years, and I would hate to see this service go away. The whole field of palliative medicine has made death just a little bit easier and has brought compassion and dignity to countless families. With costs as high as these, however, hospice may find that it prices itself right out of our nation's ability to pay.


WISPR said...

By their numbers alone, the boomers will severely tax the federal health care system, at a time when Washington is struggling to curb growing Medicare costs.

Janice said...

Yes, especially if there is such a glaring lack of oversight. There is a very real concern about national debt, and realization that health care costs, especially medicare, significantly impact that, yet we seem unable to use data like this, which is freely available, to cut costs without reducing services.

TW said...

While I appreciate this blog I take umbrage with this particular post. On average individuals are enrolled in hospice for 65 days. Medicare reimbursement for routine home care is about $140. For an individual receiving hospice care for 65 days at that rate costs Medicare $9100. Your description of hospice services is incomplete. Hospice provides people services, physician, nurse practitioner, nurse, social worker, chaplain, volunteer support and bereavement services to the family for 13 months after an individual dies. Moreover, it includes all medications related to the primary diagnosis and all the medical equipment a patient needs (hospital bed, wheelchair, walker, oxygen, etc.). Your calculation of the cost of a particular discipline per hour is very misleading. As you may be aware the hospice team meets regularly to discuss an individual's goals of care and there is much that goes on outside of being face to face with a patient that are aimed at maximizing a quality of life.
You are right to point out that the utilization of hospice care is a cost-savings for Medicare as it not only improves quality of life but also reduces hospitalizations, recurring trips to the ER and the pursuit of expensive treatment options aimed at a cure that are more of a burden that benefit. Those interested in reducing healthcare expenses should be advocating for the broader application and utilization of palliative care services generally and hospice care in particular. Hospice care is in a financial crisis due to rate cuts and required face-to-face (physician to patient) for re-certification if a patient lives past 6 months of admission. Indeed for many hospices sustainability and solvency are a concern. I hope you will reconsider your perspective on this issue. Thank you.

Anonymous said...

My father is receiving hospice care for terminal dementia in NYC and I also
am outraged by the charges being paid by Medicare. ($5485 base per month plus $210 per day for an aide and $262.50 for a nurse) This for an aide for 20 hours a week (the daily rate received by hospice is paid every day of the month) As to the extra services, with all due regard, the social worker hasn't been needed since the second visit and the clergy not at all (but he still comes) If we need an antibiotic or other new prescription, we have to contact my father's doctor because the hospice doctor is often unavailable. And charges are made for visits by all these people every 60 days to recertify eligibility for remaining on the program. I won't even go into what the Government pays for rental of medical equipment, which is so high that it alone should be the subject of an investigation. In short charges are now being made at the rate of $120,000 per year for my father and while we value the services of the aide and nurse, the "non-profit" is making a bundle and no one is watching the store.

Janice said...

I have thought about how I could actually find out where all of this money goes, but that's a hard thing to do. I'm sure the nurses don't get it, absolutely sure the aids don't get it, completely convinced that the managing physicians don't get it (because I am often a managing physician and I make nothing from supervision of hospice care.) A friend of mine was hired as a hospice director, a physician, and she wasn't making that much (before resigning because of mismanagement.) So that leaves administration, which includes documentation, billing and maintaining the business. And profits. Is there just a stupendous amount of waste, or are the company executives very well paid?

Anonymous said...

I just received the summary of charges for my mother's hospice and am outraged! Close to $7,000 for the month of March. The RN comes twice a week for blood pressure & pulse at $199 per 15 minute visit, a social worker comes once a month at $400 per 15 minute visit, a hospital bed is supplied and a "comfort kit" but that is the extent of services. The hospice "accountant" explained to me that everyone is charged the same per diem and that some have more expenses than others, but that it all balances out. I see now why Medicare is in such a pickle... $800 per hour for an RN... $1600 per hour for a social worker? I'm told by hospice that Medicare sets these charges and they are just following the guidelines. Health care is expensive but this is ridiculous! What can be done?

Anonymous said...

I am in agreement! Hospice billed Medicare over $4,000 for 8 nurse's visits (15 minutes or less each time) and 2 brief visits by the social worker for my mother. And Medicare pays it! It breaks down to over $400 per visit. How can this possibly be justified?

Anonymous said...

My brother just returned form the local Walgreens Drug store after pricing the cost of a wheel chair for our 93 year old Mother. He could purchase an inexpensive chair for about $150.00 but was informed that for Medicare to purchase one for her he would have to go to a medical supply company. He proceeded to two local medical supply and was shocked to learn that in order for him to obtain one through Medicare, he would have to lease one for a year and then it would be her's at no additional cost. The lease fees monthly (billed to Medicare) would be $150 +/- or about $1800 for a chair that he could have purchased at Walgreens for $150. I am 63 and worry that Medicare will not be available for me in 2 years and more so for my wife in 5 years.