Bending the Cost Curve for Palliative Care

Mark Lewandowski’s recent podcast, which he shared with us, addresses problem issues and potential solutions related to funding for palliative care in hospice care. In the second portion of the podcast, (2:00 - 2:59), he addresses how financial success can be found by “Bending the Cost Curve” for palliative care.

He notes that success can be found with utilizing commercial, at-risk, third party carriers like a NACo (National Association of Counties), MCO (Managed Care Organizations), or MSO (Management Services Organization) to take the high cost, co-morbidity, chronic patients out of the acute care system and transition them to a lower cost care structure. This could be a hospice organization or some other form of non-acute care for patients who are not acutely ill, but still need to have care provided for their - sometimes multiple - chronic condition(s). The idea being to properly care for and treat the patient in a way that reduces the need for multiple readmissions of these “frequent flyer” patients.

He further notes that we in the healthcare community must accept, adopt and adapt to a different model of care and reimbursement. Instead of the “fee-for-service”, volume-based reimbursement model, which pays based on the number of visits; the newer model is a value-based model designed to pay on the quality of care, not the quantity of procedures performed. He calls it “cap and sub-cap” which refers to capitation and sub-capitation.

Capitation is a payment model in which a healthcare organization contracts to care for the health needs of a population group and is paid based on the number of persons (or “heads” - capita in Latin) in the group. The larger the group the more the risk is spread out. Sub-capitation refers to subbing out the care for a segment of that group to another organization. For example, subbing out the mental healthcare of a population to a behavioral health organization.

The Affordable Care Act included a value-based purchasing program which was the beginning of reimbursement based on the outcome of care rather than the number of care units provided. The Quality Payment Program (QPP) of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) takes this approach to a whole new level with physicians (and other eligible providers) being reimbursed based on one of two pathways; either the Advanced Alternate Payment Model (APM) or the Merit-based Incentive Payment System (MIPS).

Concordance Healthcare Solutions recognizes the need to keep supply costs down as low as possible in these non-acute settings. We seek to do our part in bending the cost curve for palliative care to these chronic care patients.

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