Within the past few weeks, the Obama administration issued a final rule which allows Medicare to reimburse physicians for engaging in consultations with patients on end-of-life care. Receiving widespread support from both the American Hospital Association and American Medical Association, the final rule will be effective starting in January 2016, nearly six years after the enactment of the Affordable Care Act (ACA).

End-of-life care is a difficult subject for discussion between physicians and patients, but it provides the opportunity for advance planning that reflects the patients’ best interests. This final rulemaking action by the Centers for Medicare and Medicaid (CMS) illustrates a firm step in the direction of a more patient-centered approach to end-of-life care, showing the benefits of hospice and other palliative care measures for patients nearing the end of their life. Pursuing these alternatives has the potential to better direct Medicare savings and reflect the patients’ best wishes.

A Paradigm Shift

Incentivizing doctors to have these pertinent discussions reflects a larger shift in the approach to healthcare, where a more patient-centered approach is stressing the quality of care over the number of treatments given. Through the ACA, alternative payment and reimbursement models have been pursued by CMS to improve the delivery of care. Some of these models like accountable care organizations (ACOs) and patient-centered medical homes (PCMHs) emphasize communication among different care providers, the coordination of care to the patients, and as a result a more efficient cost structure. The paradigm shift away from “more treatment” to “better quality” is an important distinction to make in the delivery of care, especially at the final stages of life.

This approach has been difficult to communicate, and during the early stages of the ACA, there was plenty of backlash against the government-sponsored “death panels,” the misconception that a patient’s care or lack thereof would be determined by CMS bureaucrats. Instead, as the new rule clarifies, advance care planning is a step that can be taken at the discretion of the patient to determine their best options.

Cost of Care

The 2014 total expenditures for Medicare were $613.3 billion, which included funding for Medicare Parts A (hospital stays, skilled nursing, and hospice care), B (physician, outpatient, and other services for the aged and disabled), and D (prescription drug insurance coverage). According to the Kaiser Family Foundation, seniors who passed away in 2011 while receiving traditional Medicare coverage (Parts A, B, and D) averaged about $33,486 per beneficiary, nearly four times more than beneficiaries who did not die that year. The Foundation also reported that on average about half of the total Medicare expenses for people who passed away in a given year went toward hospital inpatient care. The Kaiser Foundation’s report also highlighted that only 10 percent of the Medicare expenses within a beneficiaries’ final year were spent on hospice and other non-invasive care options. Focusing on patient comfort, hospice care is a less costly alternative because it does not involve surgical procedures, hospital stays, and medication costs that typically accompany aggressive treatment. Pursuing this care option would help beneficiaries, insurance companies, and Medicare avoid excessive medical costs.

Focus on Quality

More affordable care is a major benefit of alternative and less-invasive treatments, but perhaps the best advantage of these options is the focus on quality. Palliative care, which focuses on managing care for patients who are experiencing chronic illness, is an alternative to the more aggressive and painful options that patients may not want to pursue. Hospice care is usually performed within the patients’ own home, where nursing services, palliative medications, and counseling is provided. Medicare can cover hospice care for patients with a life expectancy of six months, and if patients live longer than this timeframe a hospice doctor can re-certify the patients’ terminal illness and extend treatment.

In 2004, Aetna performed a study on their policyholders with less than a year of life expectancy by giving them access to hospice care without foregoing other care options to combat their life-threatening symptoms. Over two years, the study found that despite having access to both options, patients were more likely to rely solely on hospice care, with many making fewer trips to the emergency room and I.C.U. The study reflected the comfort that patients felt when receiving counseling and in-home care as opposed to within a hospital, and it further reflects cost savings on behalf of Medicare, private insurance companies, and patients as well.

Atul Gawande, surgeon and acclaimed writer on the topic of end-of-life care points out that nowadays, “death comes only after long medical struggle with an incurable condition…or the multiple debilities of very old age.” Life expectancy in the United States has grown significantly, a trend that should cause us to think about what advance planning patients should be talking with their doctors and what course of action they would like to pursue. Options like hospice and palliative care remain vital paths for patients with short life expectancy to manage symptoms and live somewhat peacefully within the comfort of their own homes while saving out-of-pocket expenses and Medicare expenditures.

Image source: Delta In-Home Care.