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For health cost control with quality care, look to hospice model

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Richard E. Riselbach & Susan Phillips
August 19, 2009

The health care reform debate has focused on two seemingly opposing factors-cost and quality-in striving to achieve cost-effective delivery of high quality care. But are they really opposing factors?


A study by the Dartmouth Institute for Health Policy showed that $750 billion is spent each year on health-related services that donít necessarily help patients get better. Reduction of this unnecessary expense could free up money for comprehensive health insurance coverage for virtually all Americans. However, skeptics doubt whether such savings can be achieved without limiting quality of care.


Important in the debates are examples of care systems with documented cost savings that do not compromise quality. HospiceCare Inc. is a leading example. Rock County is served by this multidisciplinary, physician-led philosophy of team care that is most often provided in the patientís home. HospiceCare Inc. cares for more than 650 patients per day who have life expectancies of six months or less. More than 30 percent of all Rock County deaths are cared for by HospiceCare. Hospice patients are spared the pain and expense of spending their last days of life in an intensive care unit.


Staggering costs can result from attempts to extend life through unnecessary hospitalizations and emergency room visits. Average costs for nonsurgical intensive-care unit stays range from $3,000 to 4,000 per day. Hospice costs considerably less.


Instead of fee-for-service, hospices are reimbursed on a daily rate-about $130 per day for routine home care. Hospice saves Medicare more than $2,300 per patient, which results in more than $2 billion savings per year, according to the Duke study.


The cost savings are even more impressive considering the documented high quality of hospice care. In 2007, the Journal of Pain and Symptom Management reported that in patients with life-limiting conditions, hospice patients live 29 days longer than nonhospice patients. Locally, up to 13 percent of HospiceCare patients are discharged each year because quality care results in them no longer being expected to die within six months.


Hospice is available to all patients with life-limiting conditions and life-expectancies of six months or less. HospiceCare provides care to all, regardless of age, health or social status. Services are offered on a sliding scale for patients who do not qualify for Medicare, Medicaid or do not have insurance coverage.


If more patients document their wishes, they can avoid futile therapy and greater savings can be achieved as well as a higher quality of life. Thus, the potential exists for even greater savings through use of the HospiceCare model.


HospiceCare Inc. provides tangible evidence that cost and quality are not necessarily opposing factors in health care reform. Their model of multidisciplinary teams, led by physicians, with electronically facilitated coordination of care and innovative reimbursement, needs to be expanded and applied throughout our health care system to achieve cost-effective delivery of high quality care-an attainable goal of reform proposals.


Health and health policy Richard E. Rieselbach is a professor emeritus at the UW School of Medicine and Public consultant to the Wisconsin Medical Society. E-mail rer@medicine.wisc.edu. Susan Phillips is president and chief executive officer of HospiceCare Inc. E-mail Susan.Phillips@hospicecareinc.com.

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