Palliative Care Could Cut Health Care Costs by $103 Billion

Palliative care could reduce societal health care costs by $103 billion within the next 20 years, the nonprofit economic research group Florida TaxWatch said in a report. The group recommended that policymakers take action to expand palliative care utilization in the state.

Palliative care in general can reduce health care costs by more than $4,000 per patient, according to a July 2017 study in Health Affairs. It can also reduce the frequency of 911 calls, emergency department visits, and unnecessary hospitalizations.

Many hospice providers offer palliative care in addition to their other services. Payors often treat it as a precursor to hospice, allowing patients to receive similar services until they become eligible for the hospice benefit.


“More and more hospices are realizing that they have to diversify their portfolio and go beyond reliance entirely on the Medicare Hospice Benefit, because they recognize that there are a lot of patients out there who are not yet eligible for hospice or opt out of it, and their needs are not being met,” Diane Meier, M.D., director of the Center to Advance Palliative Care, told Hospice News.

Another impetus for diversification is the likelihood of an eventual carve-in for hospice in Medicare Advantage plans, which the U.S. Centers for Medicare & Medicaid Services will begin testing in 2021.

“Medicare Advantage currently covers about 30 percent of Medicare beneficiaries, and that will likely represent a big loss,” Meieir said. “There is a threat that length of stay will be shorter, and plans will want to negotiate for lower rates.These reasons are driving hospice leadership across the country to look into how they can take care of very sick patients who are not hospice eligible.”


Hospices that provide palliative care also have the advantage of reaching some patients earlier in the course of their illness, allowing for smoother, more seamless transitions to hospice when the time comes. It also provides an opportunity for providers to have earlier discussions with patients and families about hospice.

“The challenge we are facing is how to get the patient into hospice sooner, how to have that conversation sooner, whether we are working with a referral organization or the patients and families themselves,” Shelley Cartwright, administrator of Westmont, Ill-based Apex Hospice and Palliative Care, said.

The Florida TaxWatch report identified barriers to expanding palliative care in the state, including financial stability for providers and lack of service reimbursement systems, lack of public awareness, workforce shortages, professional education and training deficiencies, and regulatory barriers.

The group called on legislators and regulators to establish a regulatory framework that would include a standardized definition for palliative care, minimum standards of available services that are consistent with national standards, and a re-examination of payment models.

“The over-reliance on government funding limits the expansion of palliative care services … more sustainable financing is needed,” Florida TaxWatch Vice President of Research Bob Nave told Hospice News. “There is not a simple solution to that problem that can responsibly be recommended, but there is a role for state government to encourage and foster the expansion of palliative services.”

While the report was specific to Florida, its recommendations echo conversations occurring at the national level. Congress is considering legislation to boost the palliative care workforce, and to date 25 states have passed legislation to promote palliative care utilization. Kentucky passed such a bill last week.

If the Florida does take action to expand palliative care, the report indicated that hospice providers would play a vital role, and that hospice companies that provide palliative care could likely cover much if not most of the state’s patient population.

“Although inpatient palliative care programs have been proven effective,” Nave said. “Research suggests that expanding the availability of community and home-based palliative care programs would help meet the needs of the growing number of patients.”

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