Health care providers that are investing in palliative care need to have an effective business plan to support their efforts.
The content of these business plans can vary based on setting, such as inpatient hospitals or community-based programs, according to Brynn Bowman, CEO of the Center for Advance Palliative Care. But key elements in both settings are billing practices and demonstrations of value to referral partners, hospital leadership or other stakeholders.
“The math and the value proposition very much depends upon setting care, setting and payment model. There’s a strong business case for palliative care in each of those in each of those settings, or each of those scenarios, that is supported by the literature,” Bowman told Palliative Care News. “But palliative care program leaders really do need to be effective at articulating for each of those settings and each of those payment models — What is the value of my service and why does this make sense to you, my financial partner or my organizational leadership?”
Well-run inpatient programs can typically cover more than half of their operating costs — though full coverage is rare due to staffing and interdisciplinary team costs, according to Bowman. Hospitals have several options for billing, she said. They can bill based on time spent. They can bill based on the complexity of the patient’s needs. They can bill based for some specific services like advanced care planning as a dedicated billing code.
However, revenue shortfalls likely mean that palliative care leaders may need to convince hospital leadership to subsidize the program’s remaining expenses. They can do that by demonstrating their program’s value using metrics such as shortened length of stay for patients who receive palliative care, improved discharge planning and better symptom control, which can reduce readmissions, according to Bowman.
“One of the outcomes of specialty palliative care in the inpatient setting is reducing those very long lengths of stay,” Bowman said. “Those long lengths of stay are costly for the hospital, and so there’s a financial value to the hospital to support the palliative care team.”
Community-based programs can demonstrate their value using similar metrics, such as better symptom control, completion of advance care planning documents and prevention of avoidable hospitalizations and emergency department visits, Bowman said.
Data such as these can be beneficial when making a case for palliative care to potential value-based payers such as Accountable Care Organizations (ACOs) and Medicare Advantage plans, among others, as well as to referral partners.
An effective business plan should also take into account the payment models through which the program would be reimbursed, be it fee-for-service Medicare, ACOs or other value-based payment arrangements.
“A growing number of palliative care programs working outside of the hospital in community settings may be part of a value-based payment contract,” Bowman said. “There again, the basic value proposition is that palliative care involvement helps keep patients out of crises, out of the emergency department, avoid hospitalizations and avoid re-hospitalizations.”
