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Does your hospital need an inpatient hospice unit? Here's what to consider before investing.

November 13, 2018

    Value-based care arrangements are increasingly putting hospitals on the hook for patient outcomes days, weeks, and even months after discharge, forcing planners to grapple with new questions about their post-acute care footprint. Our inbox has recently been full of questions from hospital planning teams about hospice and palliative care. In particular, one question keeps coming up: Should we invest in an inpatient hospice unit?

    In this post, we walk through the case for an inpatient hospice unit, discuss some of the alternatives to inpatient hospice, and outline some of the benefits and drawbacks to these alternatives.

    What is the case for an inpatient hospice unit?

    Though low reimbursement rates and substantial staffing costs make it challenging for an inpatient hospice unit to generate profits, there are still clinical and indirect financial benefits.

    Better patient experience. Patients receiving hospice care experience a variety of benefits over those who don't. A study published in 2018 found that hospice admissions were positively related to patient satisfaction and pain control, and reductions in hospital days and deaths in the hospital.

    Improved ICU throughput. Providing inpatient hospice care can speed up patient transfers. In a retrospective study of two academic medical centers, patient transfers from the ICU to an inpatient hospice unit saved 585 ICU bed days over the six-month study period.

    Lower patient care costs. Hospice care can also reduce costs. A 2014 study in the Journal of the American Medical Association found that costs for patients receiving hospice care due to poor-prognosis cancer were nearly $8,700 less than costs for a comparison group who didn't receive hospice.

    Alternatives to offering inpatient hospice

    Palliative care units and consult services are the primary alternatives to hospice. Like hospice, dedicated palliative care units and palliative care consult services focus on symptom relief and management rather than curative care. However, unlike hospice, patients do not have to be at end of life to receive palliative care. And while hospice facilities are a unique provider type certified and regulated by Medicare, palliative care is primarily a professional service billed under the physician fee schedule. In dedicated inpatient palliative care units, patients' attending physician is a palliative care specialist, while under the consult model, palliative care physicians support the patients' primary attending.

    Hospitals considering investing in an inpatient hospice unit should first define what goals they hope to achieve through a dedicated unit, and then evaluate whether they could achieve those goals at a lower cost through an alternative palliative care program.

    Potential benefits of a palliative care consult program or palliative care unit over a hospice unit

    When compared with a hospice unit:

    • A palliative consult program would not require a dedicated space and may have lower staffing requirements;
    • A palliative consult program or dedicated palliative care unit would not have to meet Medicare's requirement to offer the full continuum of inpatient and outpatient hospice services, making it far less resource-intensive to establish;
    • Palliative consult programs and dedicated palliative care units have also demonstrated significant cost savings and improvements in patient experience; and
    • Palliative care programs are not limited to patients at end-of-life, and can offer clinical and financial benefits for a broader patient population.

    Potential drawbacks of a palliative care consult program or palliative care unit over a hospice unit

    When compared with a hospice unit:

    • Inpatient palliative care services are not reimbursed beyond the standard DRG, although physicians and mid-level providers may bill E&M codes for their professional services;
    • Despite demonstrated cost savings and improvements in patient experience, there is some evidence that a palliative care consult program may not achieve the same level of savings and patient experience improvements as dedicated units; and
    • Palliative programs may not lead to as many patient referrals to hospice care, resulting in less downstream savings than a hospice unit.


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