Good afternoon, ProviderNation. “Nowadays,” Oscar Wilde famously put it, “people know the price of everything and the value of nothing.” Providers who are pushing back against an inspector general’s report recommending across-the-board cuts to Medicare therapy must certainly feel Wilde’s pain.
So, to cheer up poor Dan Ciolek, here comes a peer-reviewed study on end-of-life care by two professors at Mt. Sinai’s Icahn School of Medicine who argue that value and price don’t have to be in conflict.
Challenging what they call “the myth” that end-of-life care is a drain on the health care economy, Melissa Aldridge and Amy Kelley are publishing a study Thursday in the American Journal of Public Health. Aldridge and Kelley find that the dying account for a scant 11 percent of the populations with the highest health care costs.
‘Misses A Lot Of Costs’
“The perception is that end-of-life care is expensive relative to care at other periods of time, and there are a number of reasons why. Primarily, it’s because of the data that’s available,” Aldridge tells me. “Many previous studies have only looked at Medicare costs. And that misses substantial costs paid by Medicaid, private insurers and the families themselves.”
She adds: “It also tends to look at an individual over time and says, look, on an individual scale, it’s expensive period. But if you look at it at the level of population, you see that the aggregate costs of end-of-life care are small by comparison.”
Aldridge and Kelley looked at 2011 Medicare, Medicaid, private-pay, and out-of-pocket costs exhaustively—essentially, creating their own, massive data sets ex nihilo. They found that the 18.2 million people in “the tail” of American health care’s cost curve incurred $17,500 or more in health expenses per year, for a total of $976 billion. That’s the top 5 percent of American health expenditures.
‘Discrete Event’ Drives Costs
But, of those high-cost drivers, only 2 million people were in the last year of their lives, Aldridge and Kelley report. Nearly half of high-cost medicine’s spending was on people who had “a discrete event”—a heart attack, a broken hip, etc.—that drove up health care costs. They were, in essence, one-offs in the cost curve, and within a year, their individual spending had fallen dramatically, the study says.
But another 40 percent of high-cost patients consisted of those with “chronic conditions and functional limitations and tend to be older.” (That is, the people providers are helping every day.)
Aldridge and Kelley expected to find that end-of-life care wasn’t as expensive as the Big Public tends to think. But even they were surprised by how small its percentage was, Aldridge says.
Early Palliative Care Integration
“I think if you were thinking about interventions and where do we really need to improve quality and reduce costs, we need to be looking further upstream [to] the group that needs more interventions to manage complex illnesses and stay out of the hospital year after year after year,” she says.
Aldridge acknowledges, though, that end-of-life care is essential whether or not it’s expensive. And that brings us to the question of value. Because as Aldridge and Kelley see it, the best way to reduce costs is to improve value.
“Certainly one of the interventions that can improve value is early access to palliative care,” she says. “We have the Medicare hospice benefit, which is extremely valuable—it’s a fantastic benefit for those at the end of life. We can expand it and fund it better for that population. But what we need is earlier integration of the palliative care model, particularly for those who have multiple ailments.”
Bringing palliative care in earlier will, of course, increase individual costs. But, as Aldridge and Kelley have demonstrated again (and Dear Old Oscar knew from the start), it’s a small price to pay for real value.