How Value-Based Care Could Change a Hospice Organization’s Culture

A transition to value-based reimbursement would fundamentally change the traditional hospice business model. It could also wield a powerful influence on an organization’s culture.

Hospices are inching ever closer to the value-based arena. To date, much of this has centered around diversified programs like palliative care, PACE and other services.

However, the ongoing value-based insurance design model (VBID) demonstration and some Accountable Care Organization (ACO) relationships are giving providers a taste of how at-risk reimbursement may affect their core hospice business.


But the impact on culture will largely depend on the providers’ leadership, according to Dr. Sachin Jain, CEO of SCAN Group.

“There are some really positive changes that are attached to a value-based care organizational model,” Jain told Hospice News. “There are also some potential negative changes that can take place, and that’s where I think leadership ends up being really important because you can take the same set of facts and interpret it really differently.”

The SCAN Group is the parent company of SCAN Health Plan, a $4.3 billion nonprofit Medicare Advantage (MA) organization that covers more than 285,000 members across California, Arizona, Nevada and Texas.


‘Capitation is freedom’

To create a positive culture in a value-based environment, corporate leaders need to keep their eyes on the long-term, big picture while making “doing the right thing for patients” their top priority and guiding principle, Jain said.

If leaders maintain this kind of mindset, a capitated payment model can create opportunities to do more to preserve patients’ health or improve their quality of life, he indicated. For example, a provider or health plan could purchase a refrigerator for a patient to store their insulin, which would fall outside the scope of a traditional fee-for-service model.

 “Capitation is freedom. It’s the freedom to do the things to really keep patients healthy over the long haul. Without the right leadership, it can become an invitation to cut corners,” Jain said. “Value-based care is neither good nor bad. It is a way of paying for things, and then it is up to enlightened leaders to make it good — leaders who think long term and who choose as much as possible to be pro-patient and not necessarily pro-profit.” 

Value-based care is neither good nor bad. It is a way of paying for things, and then it is up to enlightened leaders to make it good.

-SCAN Group CEO Sachin Jain

A vast range of payment and care delivery systems can fall under the designation “value-based care.” For many hospices, the best pathways to those payment models are through additional upstream services.

Inroads to value-based reimbursement

Thus far, the biggest step into value-based care has come with VBID. Through a component of this model, the U.S. Center for Medicare & Medicaid Innovation is currently testing coverage of hospice care through Medicare Advantage. 

Often called the Medicare Advantage hospice carve-in, CMS recently extended the payment demonstration through 2030, with plans to allow some types of concurrent curative care during its later years. Participating providers must also offer palliative care to remain in the program.

Though it remains to be seen whether the VBID model will become permanent in the long run, hospices can expect value-based payment systems to become more prevalent as time goes on.

Beyond VBID, relationships with ACOs are also becoming more common among hospice operators.

ACOs have a great deal of flexibility when they contract with downstream providers, including hospices. The two parties can negotiate mutually beneficial terms that are customized to the needs and characteristics of their patient population.

A case in point is the ACO Realizing Equity, Access, and Community Health (ACO REACH) program, which launched at the start of this year. ACO REACH replaces the Global and Professional Direct Contracting (GPDC) models. According to CMS, the new program better reflects its redesigned strategy for payment system demonstrations, with advancing health equity as a key tenet.

Getting employees onboard and motivated

A key component of managing any transitions to a value-based environment is to ensure that employees are well taken care of, according to Brent Korte, CEO of the home health, hospice and palliative care provider Frontpoint Health.

As an operator’s culture evolves around shifting paradigms in health care, clinicians in particular need to understand the purpose behind the changes and their roles in executing on both new and longstanding goals, he explained.

This could help hospice clinicians become more comfortable working in the very data-driven landscape that comes with most value-based systems.

“At the heart of it is the move towards a metrics-driven environment when hospice as a movement was founded on compassion, not numbers,” Korte told Hospice News in an email. “Because of this, many hospice veterans and staff (who have left “high measurement” environments) may feel that the heart of the benefit is being stripped away. Hospice is far from right-angled. There could be as much art as science in leading patients to comfort near the end of life.”

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