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Improving Value in Healthcare: Opportunities and Challenges for Palliative Care Professionals in the Age of Health Reform

Fletcher, Devon S. MD; Panke, Joan T. MA, RN, ACHPN

Journal of Hospice & Palliative Nursing: October 2012 - Volume 14 - Issue 7 - p 452–459
doi: 10.1097/NJH.0b013e3182604df2
Research and Practice: Partners in Care Series

Despite having the highest per capita spending on healthcare in the world, seriously ill patients in the United States often do not receive the highest quality care. Improving the value of healthcare by increasing quality while reducing escalating costs is at the heart of US health reform. With the passage of the Patient Protection and Affordable Care Act of 2010, new healthcare delivery and payment models are being implemented to achieve these goals. This article reviews areas of health reform that have specific relevance for hospice and palliative care, highlights palliative care’s positive outcomes, and reflects on current challenges within the healthcare system as well as within the field itself. Considerations regarding the language we use are explored, and recommendations are provided to ensure hospice and palliative care is represented in the planning and implementation of health reform initiatives.

Devon S. Fletcher, MD, is Assistant Professor, Department of Internal Medicine, Division of Hematology, Oncology and Palliative Care, Virginia Commonwealth University Health Systems, Richmond.

Joan T. Panke, MA, RN, ACHPN, is Palliative Care Nurse Practitioner and Palliative Consultant, Arlington, VA.

Address correspondence to Devon S. Fletcher, MD, Virginia Commonwealth University, 1300 E Marshall St, PO Box 985934, Richmond, VA 23298 (

The authors have no conflict of interest to disclose.

A fragmented system of healthcare delivery combined with payment models that emphasize volume-based fee for service (FFS) has left seriously ill patients and families scrambling for resources and information and overburdened with unreimbursed care. Healthcare costs have skyrocketed.1-3

At the heart of the health reform in the United States is the goal to improve the value of healthcare by increasing quality and reducing the escalating costs. To achieve these goals, the Patient Protection and Affordable Care Act of 2010 (ACA) includes provisions to test new healthcare delivery and payment models that refocus reimbursement structures to emphasize value of care rather than volume of care.2,4,5

Controversy is not new when attempting to incorporate care for the seriously ill and dying into legislation. In the 1970s and 1980s, the path toward the ratification of the Medicare Hospice Benefit was rife with uncertainty, and the definition of hospice saw numerous reiterations. In the first attempt to pass the legislation, the bill died in committee.6 Refining the definitions for hospice and palliative care continues today.

Despite tremendous growth in palliative and hospice programs and the field’s documented improvement in quality and reduced costs in the last decade, several provisions related to quality palliative care were removed from the original health reform bills.2 These provisions would have, in part, provided reimbursement for conversations regarding goals of care but instead were misconstrued as “death panels” and generated fears of rationing. Nonetheless, palliative care is positioned to play a critical role in efforts to redirect healthcare in order to establish effective and efficient patient-centered care.2,7

This article reviews areas of health reform that have specific relevance for hospice and palliative care, highlights palliative care’s positive outcomes, and reflects on current challenges within the healthcare system as well as within the field itself. Consideration regarding the language we use is explored, and recommendations to ensure hospice and palliative care is represented in the planning and implementation of health reform initiatives are provided.

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Escalating Costs Driving Health Reform

Approximately 5% to 10% of all patients living with serious illness, multiple chronic conditions, or functional dependency account for well over half of the nation’s healthcare costs.1-3 The costliest Medicare beneficiaries include individuals with multiple chronic conditions, those with functional impairments, those with dual eligibility for Medicare and Medicaid, those using hospital services, and those in the last year of life.1-3,8-11 This population is the target of quality palliative care and, when eligible, hospice services.2,7

Today, there are approximately 90 million Americans living with serious illness, and that number is anticipated to more than double in the next 25 years.12 Additionally, the population is aging. By 2030, it is estimated that the number of persons older than 65 years is expected to be more than twice the number in 2000.13 While aging baby boomers may experience unprecedented longevity, the extra years may carry a significant burden of chronic illness, with most living with multiple chronic medical conditions.13

What has become all too clear is that value is missing in our healthcare system, care is not optimal, and the rising costs are unsustainable.14 Despite having the highest per capita spending on healthcare in the world, multiple studies have demonstrated that seriously ill patients and their families receive poor-quality medical care characterized by unrelieved symptoms, unmet psychosocial needs, and increased family caregiver and financial burden.2,8,9,13,15

Improving the value in healthcare is at the heart of health reform in the United States and requires increased quality while reducing escalating costs. With the passage of the ACA, new healthcare delivery and payment models are being implemented to achieve these goals.2,4,15

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ACA: Brief Review

The ACA of 2010, which was signed into law in March 2010, is a combined piece of legislation that includes the ACA (HR 3590) and the Health Care and Education Reconciliation Act of 2010 (HR 4872).4,16

Several provisions in the ACA include demonstration projects aimed at changes to delivery and payment reform that will test and permit a gradual shift from volume-based FFS payment models to a pay-for-performance or “value-based” purchasing.17 A challenge for implementation will be to ensure that reforms do not impose so radical a system change that providers cannot comply or implement changes without imposing unsustainable risk. The demonstration projects are therefore geared toward exploring ways for providers, systems, and payers to gradually transition to new care delivery and payment models in order to build the capacity to adapt to the changes.17

Although provisions related to access to quality palliative care were removed from the original health reform bills due in part to concerns over perceptions of the care provided, several provisions related to payment and quality reform that impact palliative and hospices services remain.2 What does remain is a new provision (Section 2302 “concurrent care for children”), under which children are able to access hospice and curative care simultaneously. Demonstration projects for concurrent care in adult populations are also being evaluated.2,4

While not mandated in the ACA, the law offers other opportunities for palliative care and hospice programs to participate in the planning, development, and implementation of new delivery and payment models such as accountable care organizations (ACOs), patient-centered medical homes, and the bundling of payments for a single episode of healthcare.2 These models aim to improve the quality of care and control the costs for high-need, high-risk patient populations by focusing efforts on the very approaches to care and quality outcomes that palliative and hospice care has long demonstrated. In doing so, these models aim to shift provider incentives from volume-based FFS models to payment based on quality of care.2,5,17,18

The ACA lays out a plan for over $424 billion in net Medicare spending reductions that will be implemented over a 10-year period. This will reduce the annual payment updates to hospitals and other providers as well as payments to Medicare Advantage plans. In addition, the law establishes several new policies and programs that are intended to further reduce costs and improve quality of patient care.19

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Sample Healthcare Delivery and Payment Reform Models

Accountable Care Organizations. An accountable care organization consists of a group of providers (clinicians, hospitals, specialists, and other providers) that work together to provide and coordinate care for a specified patient population across settings. Together, the providers accept joint responsibility for quality and costs for the identified population.5,20,21 The Medicare Shared Savings Program was created to help Medicare FFS providers become an ACO.20

The Pioneer ACO Model, which is operated by the Centers for Medicare & Medicaid Services (CMS) Innovation Center, is designed for healthcare organizations and providers that have demonstrated excellence in integrated coordination of care. Thirty-two Pioneer ACOs will participate on a faster track to move toward transitioning from FFS payments to a population-based model, meaning there would be a single price assigned for the healthcare services needed by a specific group of patients, and a reduction in FFS payments.22,23

Primary Care Medical Home. The primary care medical home (PCMH) is not a “place.” The Agency for Healthcare Research and Quality defines a medical home as the model or organization of primary care that delivers core functions of primary health and includes five functions and attributes: comprehensive care, patient-centered, coordinated care, accessible services, and quality and safety.24

The PCMH is accountable for meeting the majority of a patient’s physical and mental health needs and recognizes that the delivery of comprehensive care requires a team approach. Attention to the patient’s and family’s unique needs, culture, values, and preferences is paramount, and measures are taken to ensure they are fully informed, and the plan of care is meaningful to them.24

The PCMH strives to coordinate care across a healthcare system, especially during transitions between sites of care. Clear communication between patient, family, and providers is stressed, and efforts are made to improve access and achieve shorter waiting times for healthcare needs. The PCMH measures quality and improvements, including responses to patient experiences and satisfaction, and data are shared with the public.24

Bundled Payment. Bundled payments involve reimbursement in a single, comprehensive payment for all services involved in the patient’s care for a specific medical condition. Distinct goods and services for a given condition and across settings are “bundled” into a payment package that shifts incentives from FFS models toward payment based on the quality of services and increased efficiency.2,17

The new bundled payment models ensure that both payer and provider share the financial risks and allow for significant flexibility regarding timeframes for an episode and services covered. If the costs of care are less than the bundled payment amount, the providers keep the difference. If costs exceed payment, providers absorb the loss. For some proposed models, such as ACOs, savings are shared by all entities involved.25,26 Proponents suggest that the bundled payment model will lead to more judicious use of health services and improved care quality.

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As one reads the descriptions of the highlighted models for delivery and payment reform, it becomes clear that palliative care is well positioned to play a critical role in care integration and participating in effective and efficient patient-centered care priorities. Many of the goals of each model represent areas where palliative care has demonstrated positive outcomes.

Hospice is still restricted to terminally ill patients who are expected to die within 6 months or less, although recertification allows for continuation beyond 6 months as long as the patient continues to meet criteria. The ACA provision for concurrent care for children and demonstration projects for concurrent hospice and curative care for adults may shift some patients earlier into hospice services.2,4 Terminally ill patients who choose not to elect hospice also fit the palliative care patient population targets.27 This is the same high-risk, high-cost population that is the focus of new healthcare delivery and payment models.

Improved quality of life and the provision of effective and efficient patient- and family-centered care are not foreign concepts to palliative and hospice providers. There is accumulating evidence that palliative and hospice programs deliver patient- and family-centered care that improves quality outcomes2,7,28-30 such as pain and symptom management, communication, emotional and spiritual support, improved quality of life, better patient and family satisfaction, and reduced healthcare costs.2,8,10,13,28,29,31-44

In addition to other quality outcomes, a recent randomized trial involving lung cancer patients showed extended survival time of an average of 2.7 months in those receiving concurrent palliative care services.44 Researchers posit that increased survival may be due in part to fewer hospitalizations, decreased rates of major depression (which is an independent predictor of mortality), prevention and treatment of distressing symptoms, and better family caregiver support.11,44

Palliative care teams have demonstrated reduced cost of care for hundreds of the most medically complex patients per hospital per year.28,39,41 In a study of eight hospitals with mature palliative care programs, the cost per day for palliative care patients was dramatically lower for decedents and patients who survived to hospital discharge.39 Another study that looked at Medicaid patients receiving palliative care services at four New York State hospitals found similar cost reduction associated with palliative care consultation.41 These findings have been replicated widely and are consistent across hospital types nationwide.

Hospice programs continue to demonstrate high patient satisfaction and quality of care for terminally ill patients.32 Health systems that integrate established, well-supported, and well-staffed and trained palliative care programs when implementing new delivery models will have a greater ability to achieve the quality and healthcare value objectives that are central to health reform.1,7,27,31

Palliative care programs have rapidly expanded since the first hospice was established in the United States in the early 1970s. The number of hospice programs increased by 47% with a 74% increase in the number of persons served over the last 10 years (Figure 1). According to 2009 statistics, hospital-based palliative care programs have increased by 138% since 2000 (Figure 2).2,13,45,46 Palliative care services are expanding to outpatient settings, cancer centers, and emergency departments.11 Some community home care and hospice organizations are providing nonhospice palliative care for patients with serious illness who do not meet hospice criteria or choose not to elect hospice care.





At the same time the field was witnessing the rise in demand for services and adding to its research base, palliative care was emerging as a recognized area of subspecialty for several disciplines. Several important documents were released and received high-level endorsements, and accreditation opportunities have become available.47

National Consensus Project: Clinical Practice Guidelines for Quality Palliative Care. The National Consensus Project (NCP) was formed in order to formalize standards and priorities identified by leaders in the field.27,47 The NCP Clinical Practice Guidelines for Quality Palliative Care (guidelines) provides a consensus definition of palliative care and outlines essential elements of the field delineated in eight specific domains. This document provides a framework for the structure and provision of palliative care services and outlines program resource requirements and performance measures for systematic evaluation of care.27 The guidelines help to reduce variation across programs. The second edition, published in 2009, reflects changes in the specialty.27 A third edition is expected in 2014 and will incorporate important advancements, including the Joint Commission’s (TJC’s) Advanced Palliative Care Certification and policy reform (C. M. Dahlin, oral communication, April 2012).

National Quality Forum (NQF): A National Framework and Preferred Practices for Palliative and Hospice Care Quality. In 2006, NQF endorsed a comprehensive framework for evaluating the quality of palliative and hospice care, along with a set of 38 preferred practices and nine research recommendations.48,49

NQF Quality Measures. In February 2012, the NQF endorsed 14 quality measures for palliative and hospice care. These measures help providers ensure patients receive the high-quality care they deserve. The measures are applicable to all clinical settings and provider types and will help improve quality and generate future research.50

TJC Advanced Palliative Care Certification. The NCP guidelines and the NQF framework and preferred practices shape TJC’s Advanced Palliative Care Certification, initiated in 2011 for hospital-based palliative services.51

These and other important developments and advances in the field help with implementation of new programs and building upon existing services.

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The advancement of the field of hospice care and the emergence and growth of nonhospice palliative care have at the same time unified the specialty and caused tensions. Tensions continue to exist within the field itself regarding how to define the specialty. The issues are complex and are based in part on historical events, barriers to needed palliative care for nonterminal patients and their families, and shifting priorities in healthcare.52,53 The challenge is for the field to unite to achieve the best possible outcomes. To do so will require reflection about our past and considerations for the future of the field in the current health reform environment.

Words influence perceptions. Perceptions influence responses. We have seen how perceptions have influenced responses in discussions with patients, families, and colleagues; attempts to educate referral sources and administrators regarding earlier access to needed services; and recently policymakers’ response to language put forth in legislative bills. The unfortunate death panel response to the portion of the legislation that included counseling on advanced directives, living wills, and end-of-life care resulted in removal of these provisions from the final bill.2 Misperceptions regarding the scope of palliative care services persist and remain a barrier to accessing needed services.

Part of the difficulty with misperceptions appears to be related to confusion of commonly used terminology. For example, what does “comfort care” really mean? In reality, it may mean different things to different people. If a family agrees to “comfort care,” have they agreed to a do-not-resuscitate status? A descriptive phrase may be more effective at describing what some of the commonly used terms are meant to imply. While these efforts could become cumbersome, it is important that we become more aware of how we are being perceived and seek ways to improve how we communicate hospice and palliative care more effectively. Our challenge is to be mindful of the language and phrases to which we have become accustomed.

We are closer than ever to the goal of having palliative care and hospice fully integrated into our healthcare system. As health reform unfolds, it is critically important that hospice and palliative care providers are able to articulate the field’s potential to impact key reform initiatives.

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Public Opinion

In an attempt to explore consumer awareness and understanding of palliative care, a recent public opinion poll tested language, terminology, definitions, and messaging with key audiences.54 Results revealed significant opportunities for improving consumer, policymaker, and provider perceptions regarding the scope and benefits of palliative care.

Poll results showed that the term “palliative care” is largely unknown by a majority of the public (Figure 3) and widely misunderstood by providers. Among physicians polled, the majority equated palliative care with terminal phases of illness, essentially assuming restrictions similar to hospice care. Providers also reported a hesitancy to use the term “palliative care” because it would be distressing to patients and their families.55 Interestingly, this finding was supported by another poll by the Regence Foundation56 that revealed that while 96% of the 500 board-certified physicians surveyed supported palliative care, 42% expressed concern that emphasizing palliative care could interfere with treatments aimed at extending patient lives as long as possible. About a quarter said they are reluctant to recommend palliative care because their patients may perceive they are not doing everything possible to extend their lives.



Several different iterations of language and messaging were tested. The following definition received the most positive responses:

Palliative care is specialized medical care for people with serious illnesses. This type of care is focused on providing patients with relief from the symptoms, pain, and stress of a serious illness—whatever the diagnosis. The goal is to improve quality of life for both the patient and the family. Palliative care is provided by a team of doctors, nurses, and other specialists who work with a patient’s other doctors to provide an extra layer of support. Palliative care is appropriate at any age and at any stage in a serious illness and can be provided together with curative treatment.54

Once consumers understood palliative care from this perspective, they were extremely positive about palliative care and want access to this type of care.

  • 95% agreed that it is important for patients with serious illness and their families to be educated about palliative care;
  • 92% say they would be likely to consider palliative care for a family member or loved one if they had a serious illness;
  • 92% say it is important that palliative care services are at all hospitals treating patients with serious illness and their families.54

What resonated with many of responders was the fact that the family as well as the patient was being cared for by a team and knowing the palliative team was working with the patient’s other doctors and providers. Responders also preferred the term “serious illness” rather than “advanced illness,” noting that “advanced” was perceived as more closely linked with end of life and terminal phases of disease. Also interesting was the fact that this definition elicited a favorable response to palliative care regardless of the consumer’s political party affiliation.54

Language is important. In order to improve access to needed services, it is critical that the messages are clear and consistent and that perceptions of the entire scope of palliative services are better understood by all.

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In the future, payment for healthcare will likely become linked to outcomes of quality and costs. In order to overcome the barriers preventing access to palliative services, we need to increase patient and provider education about the field, increase workforce availability, and increase research to support palliative and hospice quality outcomes.

The ACA requires hospice to report to CMS on quality measures by October 20134; CMS is field-testing hospice and palliative care measures, and in 2012, the NQF approved 14 measures that will assist programs in providing data on quality.2,4 Additional research is needed on how social media and other technology-based communication can improve access and system responsiveness for patients.

Access to hospice and palliative care services varies significantly across the United States. Smaller, for-profit, safety net, and Southern hospitals are less likely to offer palliative services.13 Hospital palliative care programs also show significant variation in team makeup and support. Studies have also revealed disparities in access to hospice and palliative services among minority populations.57,58 Therefore, priorities should include adherence to national guidelines and preferred practices in order to utilize available tools to help establish quality hospice and palliative care programs that reflect the field’s standards. Much progress has been made in identifying the core structure and processes for high-quality hospice and palliative care and development of standards to promote their use.11,27

Despite nearly a doubling in palliative care programs and increases in hospice programs and individuals served, today there is approximately one palliative trained physician for every 1200 patients with a serious illness.12,13 The workforce shortage is expected to increase in the coming years to meet the needs of anticipated shifts in demographics that estimate a doubling of the population older than 65 years and those coping with serious illness.11 In order to respond to the increasing need for care, there will also need to be an adequate number of trained, credentialed, and certified hospice and palliative care providers as well as increasing primary palliative care skills for all providers.

Funding for research in hospice and palliative care is one of the highest priorities.2,11 The National Institutes of Health (NIH) extramural funding for palliative care-related research is less than 0.01% despite Senate Appropriations Committee support for emphasis on palliative care research at NIH.11 Refining quality measures and messaging as well as continued contribution to the growing evidence base for the specialty is needed. Hospice and palliative provider and leadership organizations have outlined specific research priorities, and tools are available to utilize metrics that assist in data collection and analysis.59-63 The Table provides examples of selected policy priorities.



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Regardless of the status of the current health legislation and differing opinions on its ability to correct our health system’s current deficiencies, healthcare reform is an impending reality. Our current system is unable to provide quality care in many settings and is financially unsustainable. The field of hospice and palliative care is uniquely poised to be at the forefront of these inevitable changes, given the field’s demonstrated ability to increase quality care at lower costs across all settings.

As unpalatable as discussing financial incentives for changing healthcare practice is for some, this is the reality we face. Understanding how cost and quality are integrally intertwined will help to ensure that hospice and palliative care providers are at the table during discussions and in implementing key initiatives. Understanding the current health legislation and how hospice and palliative care can be effective in implementing these changes will only serve to increase awareness of our specialty’s philosophy and goals while reaching more of the population who needs our services. To do so, there needs to be a concerted effort to consider how the field is perceived and find ways to join together to deliver messaging that adequately reflects the scope and benefits of hospice and palliative care.

There is much that palliative and hospice care can do during this time. Increasing the availability and knowledge of our services and increasing research on the ability for palliative care to improve quality as well as cost reduction are critical. The future of palliative care is being written. As we continue to add to and disseminate the volume of evidence-based research and outcomes that improve the quality of life of both patients and families, future opportunities and challenges will no doubt emerge. The foundation is more secure today than it was a decade ago. Attention to palliative care policy priorities will help determine the path that lies ahead.

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costs; health reform; hospice; palliative care; quality

© 2012 The Hospice and Palliative Nurses Association