Medicare rules restrict good care for dying patients

Study suggests ways to revise payment system for end-of-life care

BOSTON, MA—A recent report by researchers at Harvard Medical School, the Harvard School of Public Health, and RAND found that many health care providers believe that Medicare regulations block them from providing good care to dying patients. The study, led by Haiden Huskamp, Harvard Medical School assistant professor of health economics, appears in the May/June Health Affairs.

In the first systematic interviews of health care providers on fee-for-service Medicare coverage and payment for end-of-life care, the providers said that patients with particularly high-cost needs at the end of life sometimes have problems gaining access to nursing homes, hospitals, and home health care services. The researchers collected their data through structured in-person interviews of clinical and administrative staff members at hospitals, hospice agencies, home health agencies, skilled nursing facilities, and physician practices in six study sites around the country.

"Most interviewees praised the comprehensiveness of the Medicare hospice benefit, but many said that the level of hospice per diem rates—$98.96 per routine day—don’t support the relatively expensive services that some patients need, such as costly pain medications or palliative radiation or chemotherapy," Huskamp says.

Patients who depend on a ventilator to breathe or have end-stage liver disease are sometimes denied access to local nursing homes, said one public hospital discharge planner. Patients needing particularly high-cost ancillary services including medications and lab tests also experience problems gaining access to nursing homes, according to some interviewees.

Providers expressed concern about the impact of the prospective payment system on home health agencies, one of the changes mandated by the Balanced Budget Act of 1997. Interviewees from one public hospital believed that local home health agencies were delivering lower-quality care and dismissing patients sooner than they should because of the change in payment systems. Several physicians reported that concern over straining a hospice’s budget had prevented them from referring patients who needed expensive care. The new system may result in an increased burden on the family and in the "dumping" of sicker home health patients into hospices. Under the prospective payment system, "there is an incentive to provide less," Huskamp says.

The research identifies specific barriers to care and suggests remedies that would not necessarily add costs to the system. The proposed solutions also are consistent with modifications made by the Balanced Budget Act. The study calls for further research in areas that pose particular problems to the millions of patients who need end-of-life care and who account for more than a quarter of the annual Medicare budget.

"The payment system was created almost 20 years ago and the types of services that were used for end-of-life patients in hospice were different back then," Huskamp explains. The researchers recommend a policy for increasing reimbursement in cases that require especially high-cost services. Since this revision might not be sufficient, they also recommend a study on the need for revising hospice rates.

Many of the providers interviewed said that the per diem hospice rates are out of date also because they do not factor in the steep decrease in the average hospice length of stay. In the past, higher costs associated with the first and last days of hospice care were divided over more days in between that cost less. With the national average length of stay having declined 27 percent from 1992 to 1998, the burden of the high cost first and last days has increased. In response, the researchers recommend a higher per diem for the first and last days of hospice, with a possible reduction in the middle-of-stay per diem if a counterbalancing decrease were needed.

For the study, patients at the end of life were defined as "patients who have a progressive, incurable illness that will end in death despite good treatment, and who are sick enough that you would not be surprised if they died within six months."

Other authors are Joseph Newhouse, the John D. MacArthur professor of health policy and management at the Harvard School of Public Health, professor of health care policy at Harvard Medical School, and vice chair of the Medicare Payment Advisory Commission; and Virginia Wang, research assistant in the Department of Health Care Policy at Harvard Medical School. The study was supported by the Robert Wood Johnson Foundation and the Commonwealth Fund.

Harvard Medical School has more than 5,000 full time faculty working in eight academic departments based at the School's Boston quadrangle or in one of 47 academic departments at 18 affiliated teaching hospitals and research institutes. Those HMS affiliated institutions include:

Beth Israel Deaconess Medical Center
Brigham and Women's Hospital
Cambridge Hospital
Center for Blood Research
Children's Hospital
Dana-Farber Cancer Institute
Harvard Pilgrim Health Care
Harvard Vanguard Medical Associates
Joslin Diabetes Center
Judge Baker Children's Center
McLean Hospital
Massachusetts Eye and Ear Infirmary
Massachusetts General Hospital
Massachusetts Mental Health Center
Mount Auburn Hospital
Schepens Eye Research Institute
Spaulding Rehabilitation Hospital
Veterans Administration Medical Center (Brockton/West Roxbury)