FINANCIAL ADVANTAGES SET TO DRIVE HOSPICE USAGE?
Stan Massey - 04/11/2012
For more than three decades, hospices in the U.S. have been trying to convince healthcare referrers (and families) to choose hospice for the exceptional care it provides during end of life. The focus of non-profit hospices has been on the mission – with attention to financial margin as the means to continue that mission.
From 2002 to 2009, hospice usage doubled across the nation. From 2009 to present, the increase in hospice usage has become very flat. Now, we might be getting to the point where recognized financial advantages may be an important additional fuel to increase usage again.
This reality was driven home at NHPCO’s recent Management Leadership Conference. Two presentations I attended there addressed the issue from different but related angles.
In his excellent plenary session, Dr. Atul Gawande said, “If hospice and palliative care were a drug, the FDA would approve it.” His reasons? 1. Hospice care, on average, helps patients increase lifespan after a terminal diagnosis by about 25 percent; 2. Patients and families indicate that the patient’s quality of life improved significantly with hospice care; and 3. Hospice and palliative care cost the healthcare system LESS than care at hospitals and ICUs. Quite a winning combination!
A much deeper exploration was given by Rich Chesney, president and founder of Healthcare Market Resources, in his session “The New Buyers of Hospice Under Healthcare Reform.” Mr. Chesney pointed out that as Medicare readmission penalties increase over the next three years, new attention will be focused on ways to decrease hospital inpatient stays and readmissions, as well as post-discharge services. Under new rules of healthcare reform, the “new buyers” of hospice will increasingly include hospital administration, Accountable Care Organization (ACO) management, and Medicare Managed Care (MCO) management.
Mr. Chesney noted that this shift will mandate a decidedly different approach than marketing directly to physicians and other referrers. Instead, hospices also will need to present their partnership advantages to C-level executives – and the conversation with them must be framed heavily in terms of financial benefit.
I agree whole heartedly with Mr. Chesney’s observation that many hospices are not currently prepared or staffed to market effectively to this new model. Do you have a good understanding of the financial drivers that matter to the hospital C-suite, ACOs and MCOs? Do you have the data and the trained marketers to confidently make the case that your organization would be their best partner both clinically and financially? If not, now is the time to start thinking about how to balance the mission of care with the margin of financial advantages.
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