Value-Based Payment and Community-Based Palliative Care: Opportunity Knocks

The future of health care payment is here. Alternative payment models (APMs), methods of paying for health care which reward quality and cost-effectiveness over the volume of services, now account for more than 30% of Medicare payments, on their way to the majority share by the end of 2018. With major incentives and disincentives under the Medicare Access and CHIP Reauthorization Act (MACRA), there are now strong forces continuing this drive into APMs. Most commercial health plans and State Medicaid programs have also made the leap.

Value-based payments are an unprecedented opportunity to assure access to palliative care for our sickest and most vulnerable patients. Fee-for-service was never a good fit for home-based care or team-based care or time-consuming patient interactions, but under alternative payment models, the business case for investing in palliative care is a no-brainer.

Alternative payment models take many forms–you may have heard of shared savings, bundled payments, capitation and value-based purchasing–but they have one thing in common: they all increase provider responsibility for managing the quality of care and controlling unnecessary utilization. Under most models, providers can share in the savings if they meet quality and spending targets, but in the future will also be on the hook for losses if utilization is too high or quality is poor.

This is the opportunity for palliative care. Accountable providers are eager for those rare solutions that simultaneously improve quality and control utilization, and palliative care has a strong track record on both counts. By providing expert pain and symptom management, psychosocial support and skilled communication with patients and families, palliative care takes folks off that treadmill of emergency room visits, hospital admissions and unnecessary procedures. Not only does this reduce spending, but it vastly improves the patient and family experience.

So how can palliative care leaders make the most of this opportunity? CAPC has been collecting best practices and lessons learned from across the country, and will be sharing these findings over the coming months. To start, we’ll highlight a basic theme that we found, across both successes and failures: data.

Data are important for three reasons:

1. Data are central to making a compelling business case for supporting your program.
2. Data are needed to identify the right patients, as well as to “dose” your interventions according to their needs.
3. Data are the only cast-iron way to keep track of your impact.

(There is a fourth reason, data are needed to price your program, but pricing is quite complex, so we’ll leave that for another post.)

Using data can help to make the business case for your program. You can and should appeal to leadership’s obligation to provide quality patient care, but payer and ACO leadership are driven by their dashboards, those quality and cost indicators that impact their own financial viability. They are worried about the number of admissions per thousand in their patient population, the number of emergency room visits per thousand and lengthy hospital stays, all of which contribute to high health care costs. For example, the average number of annual Medicare admissions per thousand is close to 300, but in the high-risk population, that rate jumps closer to 3,000[1]: that is a whopping three admissions per member per year, and should already have someone’s attention! Use your data to show how investing in your palliative care program can meaningfully reduce spending, and improve quality, for those outliers whose excess utilization accounts for a disproportionate share of population spending.

And don’t forget your patient satisfaction data. Consumer Assessment of Healthcare Providers and Systems (CAHPS) surveys play into Medicare Star ratings for health plans, hospitals and home care agencies, which impacts not only their reputation and marketability, but for Medicare Advantage plans, also their actual revenue. Patient satisfaction is an important factor in value-based health care, and most palliative care programs should be able to demonstrate a positive contribution here[2].

Once your program has secured funding, data plays an important role in identifying the right patients for your program. There are several different ways go about this, but they can be divided into two broad categories: a “pull” system in which a clinical referral to palliative care comes first, followed by confirmatory data screen; and a “push” system in which patients are identified from claims and EHR data, with a confirmation by the program’s clinical team. There is immense variation in how programs identify their target patients, but the general consensus seems to be that a combination of claims and clinical data is best. For example, Diane Meier’s April blog post on Amy Kelley’s Health Services Review paper highlights that the combination of diagnosis, hospital/nursing home utilization and functional impairment holds promise as a simple and highly-effective means of identifying patients in need of palliative care.

Once you have identified your patients, you need to use data to risk-stratify and then manage them as a population. Across the patient population, there will be high, medium and low risk individuals, and your program should plan its services intensity for each patient category, to maximize efficiency and stay within budget. This population management approach is new for many palliative care programs, but doing it well is key to ensuring quality care within fixed budgets.

Finally, programs that work in alternative payment models need to consistently track and evaluate their performance, so that they have evidence of the program’s impact and assure sustainability. One grant-funded home-based palliative care program learned this the hard way: when the grant money ran out, there were no data to support their request for continuation under their health system’s ACO, and the program closed. Indeed, if your program does not yet have a relationship with an alternative payment model but would like one, this is the component to start with. Track every aspect of your performance over time, and use it to build your business case.

Collecting and using data may be a challenge, but there’s gold in data. APM success depends on high satisfaction, high quality (demonstrated through quality measures) and controlled utilization—all things that palliative care has been proven to deliver. Then, with palliative care experts caring for the high need members of a population, there is a win-win-win for everyone, especially our patients and their loved ones.

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