Palliative Care Impact Calculator
Palliative care increases patient and family satisfaction, improves quality, and can help extend survival. The resulting cost savings are an unintended but welcome consequence of providing high quality care.
The Palliative Care Impact Calculator is designed to help you project overall cost savings for your inpatient palliative care consult service. The projected savings are reductions in direct costs to the hospital for Medicare Part A Services.
It uses a mix of data you provide, including annual admissions, annual new consults, and total interdisciplinary team (IDT) FTEs, and data reference points from the National Palliative Care Registry™ (summarized in the recent publication How We Work: Trends and Insights in Hospital Palliative Care), cost savings from national studies, and representative estimates for the average cost per IDT FTE and average billing revenue per episode of care.
Calculations assume that a team has adequate staffing of specialty-trained interdisciplinary staff to provide timely and appropriate care for complex patients, including sufficient follow-up visits.
Costs savings will vary by institution and are impacted by the service quality of your program and by the mix of patients served by your team. Best results come when palliative care needs are identified early in the hospital stay and when there is a significant presence in the ICU.
Input Values
1
Summary of Estimated Financial Impact: Direct Cost Savings
Cautions: This data is representative of likely results, but for illustration only. Your results will vary based on the characteristics of your health system, demographics of your patients, and effectiveness of your team. It assumes sufficient staffing and appropriate training.
- Some palliative care teams are achieving higher penetration rates than represented here; higher penetration is correlated with higher staffing.
- Staffing ratios at some sites will be higher than modeled here, often due to small hospital size (where it takes a minimum critical mass of team members to provide care access daily) or to large, academic hospital characteristics (extensive teaching duties, many learners, and complex systems).
Please use this to help estimate results, but not as a substitute for good accounting and data collection of your own.
2
Penetration Rate and Staffing: Your Program vs. National Palliative Care Registry™
Higher penetration rates are associated with higher staffing. For more information, see the National Palliative Care Registry™ and the recent publication: How We Work: Trends and Insights in Hospital Palliative Care.
Staffing has been increasing to accommodate higher volume. It is important to plan for the staffing you will need, and to recognize that the comparative data is from 2015 and includes many programs with open positions and capacity challenges. Therefore, we recommend focusing on and planning for staffing in the top quartile to optimally deliver timely and effective care. Timely and effective care is necessary to achieve the best cost savings and impact on other high-value goals.
| Penetration Quartile | Penetration Ranges | Median Penetration Rate (Consults/Admissions) | Median IDT FTEs per 10,000 Admissions |
|---|---|---|---|
| Quartile 1 | (0.1 - 2.8%) | 2.2% | 1.4 |
| Quartile 2 | (2.9 - 4.0%) | 3.5% | 2.0 |
| Quartile 3 | (4.1 - 5.6%) | 4.8% | 2.1 |
| Quartile 4 | (5.7 - 22.1%) | 8.2% | 3.6 |
| Overall Median | 4.1% | 2.1 | |
| Your Program | % | ||
Tables 3, 4, and 5 explain assumptions in Table 1 for billing, average FTE costs, and cost savings/case. They are for reference only and are not affected by the data entered in the calculator.
3
Average Cost per FTE Based on a Sample of IDT Staffing Mix
Staffing costs are a function of FTEs, mix of disciplines, and salary and benefit rates. Salary rates are placeholder estimates. FTE mix matches results from Registry for IDT; FTE weighting is based on programs reporting a complete interdisciplinary team.1
| Staffing Roles | Placeholder Full-Time Salary | Salary + Benefits | FTE* (Relative Ratios of FTEs Drives Average Cost) | Year 1 |
|---|---|---|---|---|
| Benefit Rate Assumption | 29% | |||
| Physician | $210,000 | $270,900 | 1.2 | $325,080 |
| Advanced Practice Registered Nurse/Registered Nurse | $105,000 | $135,450 | 1.9 | $257,355 |
| Social Worker | $65,000 | $83,850 | 0.9 | $75,465 |
| Chaplain | $65,000 | $83,850 | 0.5 | $41,925 |
| Total Staffing Cost | 4.5 | $699,825 | ||
| Average cost per FTE (this changes as IDT mix or salary changes) | $155,517 | |||
| Average cost per FTE used in model calculations | $160,000* | |||
*Above calculation rounded up.
4
Estimated Billing Revenue per Episode of Care
(New Patient Consult and Subsequent Visits)
Based on 2017 CMS Rates for the National Average.2
Billing revenue will vary based upon geographic region, billing practices, and provider mix. Coding mix below is a representative sample for modeling purposes only. Additional revenue from use of extended time codes and/or Advance Care Planning codes is not included.
Hospitals will need to evaluate average net revenue overall (blend of Medicare, Medicaid, Commercial, and self pay). For these estimates we have assumed collection of 100% of Medicare rates.
| HCPCS Code | Short Description | Facility Price | Coding Mix Per Episode of Care | Weighted Revenue | Expected Volume* | Expected Revenue at CMS Rates |
|---|---|---|---|---|---|---|
| 99221 | Initial Hospital Care | $103.00 | 10% | $10.30 | ||
| 99222 | Initial Hospital Care | $138.89 | 40% | $55.56 | ||
| 99223 | Initial Hospital Care | $205.64 | 50% | $102.82 | ||
| Weighted Average of New Patient Codes | $168.68 | 1 | $168.68 | |||
| 99231 | Subsequent Hospital Care | $39.84 | 20% | $7.97 | ||
| 99232 | Subsequent Hospital Care | $73.21 | 50% | $36.61 | ||
| 99233 | Subsequent Hospital Care | $105.87 | 30% | $31.76 | ||
| Weighted Average of Follow-up Visit Reimbursement | $76.33 | 2.2 | $167.93 | |||
| Weighted Average Per Episode of Care (New + 2.2 Follow-ups) | $336.61 | |||||
*The expected rate of subsequent visits of 2.2 is the rate for hospitals >500 beds from the National Palliative Care Registry™; The rate for small hospitals is 1.3.3
5
Calculations Used to Estimate Direct Cost Savings for Inpatient Palliative Care Consult Service
Examples of Per Case Savings, illustrating impact of different proportions of Live Discharges to in-hospital deaths, and With or Without Inflation Adjustment, as well as two scenarios at lower (more conservative) assumptions.
OVERVIEW:
Inpatient palliative care has been examined in numerous studies to assess the impact on hospital costs. The most comprehensive study was published in 2008, and was based on a multisite study of 43,000 live discharges and 4,700 deaths, reporting on impact on "direct costs."4 Many other studies have reinforced the findings of this study and drilled into specific impact areas, such as the reduction in the use of ICU beds5 and the importance of early engagement with patients.6
The table below is built upon the findings of this study.
The Palliative Care Impact Calculator assumes the lower mix of deaths to live discharges (20% deaths, 80% live) and adjusts the estimate for inflation. For the sake of illustration of other conservative assumptions, the examples at 80% or 60% of the estimate are provided. Best results are achieved by appropriately staffed teams, with interdisciplinary components and teams that achieve earliest appropriate engagement with patients.
| Description | Savings Based on 2002-2004 Direct Costs4 | Savings Adjusted for 2016 at Inflation Factor of 1.47 | At 80% of Estimate | At 60% of Estimate |
|---|---|---|---|---|
| Findings Unadjusted for Inflation | Adjusted for Inflation | Assumes "Less Impact Than Average" | Low Impact Estimate | |
| 1.4 | ||||
| Adjusted Net Direct Cost Savings per Case for Live Discharges | $1,696 | $2,374 | ||
| Adjusted Net Direct Cost Savings per Case for Deaths | $4,908 | $6,871 | ||
| Blended Rate at 30% Deaths, 70% Live | $2,660 | $3,723 | ||
| Blended Rate at 20% Deaths, 80% Live | $2,338 | $3,274 | $2,619 | $1,964 |
Savings are a conservative estimate as they do not incorporate the impact of the palliative care team on reducing LOS,8 readmissions,9,10 and mortality,11 and improving patient and family satisfaction.12,13
Assumptions used for the other scenarios for impact: The blended rate of 20% deaths/80% live discharges, adjusted with an inflation factor of 1.4, is used for the base scenario. This is appropriate for a mature program (earlier engagement, lower % of deaths) that has staff to be engaged early in the stay, having most impact on total case cost.
The adaption of Morrison et al. (2008)’s findings involved the adjustment of $1 (2004) to $1.40 (2014) using a standard calculator for medical inflation.
The additional scenarios for lower impact are provided as potential assumptions for less mature programs that are less fully staffed, particularly if staff is not able to cover weekends or after hours.
Citations
Frequently Asked Questions
What if I don't have any data for annual inpatient admissions or discharges?
You can estimate annual admissions using the following shortcut:
[(Staffed Beds x 365 days) * Average Occupancy Rate] / Average LOS = Estimate of Admissions
Or, look up discharges on a free website, the American Hospital Directory.
How is the 'Direct Cost Savings per Case' determined?
Inpatient palliative care has been examined in numerous studies to assess the impact on hospital costs. The most comprehensive study was published in 2008, and was based on a multisite study of 43,000 live discharges and 4,700 deaths, reporting on impact on "direct costs."
Many other studies have reinforced the findings of this study and drilled into specific impact areas, such as the reduction in the use of ICU beds and the importance of early engagement with patients.
These savings have been adjusted for 2016 at an inflation rate of 1.4 for use in the calculator.
Where can I review the data and terminology used by the financial impact calculator?
This calculator uses figures and definitions from the National Palliative Care Registry™ (summarized in the recent publication How We Work: Trends and Insights in Hospital Palliative Care). Please access the website and review for context and definitions.