Sick To Death > Chapter 4 > The Business Case for Change

Sick To Death book cover This extract from the online edition of Sick to Death and Not Going to Take It Anymore! is used with permission.

The Business Case for Change

In the current system, federal policy shapes care for the last phase of life, because federal dollars pay for most of the health-care costs incurred at that time. Yet there is no coherent agenda, and no federal agency monitors and addresses the needs and priorities of this part of life. Although payment and coverage policies generally ensure ready access to surgery, diagnostic tests, and physician-directed treatments, they do not cover continuity of care over the long term, home health care, symptom control, and family and caregiver support. Many of the most successful programs for people living with eventually fatal chronic diseases are directed by nurses or social workers, serve patients in classrooms and at home, ensure that medications are available, and are dedicated to good advance care planning. But Medicare does not generally cover these services and strategies. Indeed, Medicare's payment policies yield no workable business plan for physicians and hospitals that aim to provide coordinated and comprehensive care to those who face serious chronic illnesses (Lynn, Wilkinson, and Etheredge 2001).

Medicare has certainly been one of the valued legacies of the idealism and social reform of mid-twentieth-century America (Stevens 1996). For nearly forty years, the United States has ensured that its elderly can count on medical care. The population's needs have changed over time, and, as the aging population grows, so will its needs for care. Since Medicare's passage, pressures for change have mostly come from providers interested in defending their opportunities (for example, pursuing improved payment rates), from groups advocating coverage of those with particular diseases, or in reaction to rising aggregate costs. These agendas do not address the reliability and quality of service. Reformers will face challenges in finding politically powerful ways to bring quality and reliability to center stage.

In our present situation, a major risk to the well-being of those coming to the end of life is that the generally unreliable care for those who are old and sick will become so costly and so broadly mistrusted that this society will renege on its commitment to their care. Some experts insist that the commitment has actually been fairly fragile throughout Medicare's history (Marmor 2000). If the care is not trustworthy and the body politic decides that the costs are unbearable, it may well retreat from the current broad commitment to health care for the elderly to a political solution that effectively makes each person responsible for finding and funding his or her own services. Not only would that be inequitable, it would ensure ongoing failure in the delivery of services. No one person can generate a good disease management program for advanced heart failure - such programs are feasible only if they enroll almost every heart failure patient in a region. Thinking that each sick and dying person can shop for services is like expecting individuals to shop around and pay only for the roads they want. Some services simply are not likely to be broadly available and of high quality unless leaders organize them to serve a population. Yet vouchers and other forms of limiting both the commitment to the elderly and the moral responsibility of providers have a real political seductiveness and an existing constituency (Cook 1999).

Building a reliable care array that people value and trust and that engenders only a sustainable cost is the best available pathway toward sustaining the historic community commitment to health care for the elderly. The main financing mechanism for medical services in the last phase of life is Medicare, which covers 83 percent of all who die in the United States (Hogan et al. 2000). Medicare mostly pays fee-for-service, with 92 percent of beneficiaries having this "traditional Medicare" at the time of death. In this coverage arrangement, doctors, hospitals, and other providers of service are paid for each billed service, though hospitalization itself is mostly paid with one fee for the entire hospitalization. Fee- for-service payment encourages billable services, but not continuity. (A particularly striking example of the distortions this payment mechanism generates is described in the next section of this chapter.) No coverage is ordinarily available for caregiver training, classroom education of patients, on-call advice, bereavement, or spiritual counseling, so they are effectively discouraged.

The Medicare+Choice part of Medicare (now renamed Medicare Advantage) is "managed care," which pays on a per-month capitated rate. This per-patient, per-month payment allows the program to be more flexible in tailoring services, but adverse incentives remain. In Medicare managed care, the rates do not reflect the severity of illness. Adjustments in rate for diagnoses that caused hospitalization now apply, but those adjustments do not reflect the differences in costs between caring for persons with early illness and caring for those with advanced illness. Capitated programs, therefore, do better financially if they sign up and keep only relatively healthy patients; they cannot afford a good reputation for care of the very sick. Thus, while advertisements on buses tout health-care plans' successes with injuries and immunizations, no advertising placard lures those who are already very sick with progressive chronic conditions.

Payments in the Veterans Health Care System are budgeted and salaried, and that may be part of the reason that the veterans system has been a leader in improving care for serious chronic illness and the end of life. Serving patients correctly does not financially disadvantage any veterans' provider. But the Veterans Health Care System as a whole is thinly funded, a situation that may limit the sustainability of its gains.

Payments in hospice and PACE are capitated, usually at a rate that more closely matches service needs. Some of the good reputation of hospice and PACE may well have its origin in their more adequate and more flexible funding, as well as their targeted services and selected population.

Overall, though, the payment for medical services to most who live out the end of life covered by Medicare does not match service needs closely. Services for long-term care at home or in a nursing home are fragmented, highly regulated, inadequately paid, and often undesirable in quality. Even worse, about half of the costs of care for those in their last year or two arises from long-term care or prescription drugs. Medicare has not generally covered these (Maxwell, Moon, and Segal 2001). The financing arrangements are regularly impoverishing to patients who need long-term care, whether at home or in a facility. Medicare covers only a small proportion of long-term care, since most comes from personal assets or, when the person is seriously impoverished, Medicaid. The rates Medicaid pays approximate the lowest that the community can pay without creating scandalous conditions. For supportive services such as nursing-home care, Medicaid routinely sets the rate below actual care needs, and substantial improvements often come only with evidence of widespread inadequate care. In contrast, the health care that generates substantial financial returns tends to be drugs, devices, and technology-dependent procedures; and the costs in development, delivery, and profit for these are built into the price. Sadly, neither kind of rate setting establishes incentives for quality and efficiency.

In Washington, D.C., many Medicaid-dependent nursing-home residents need 4.0 hours a day of in-person direct care; Medicaid rates support, at best, about 2.5 hours. Fairly predictably, our city council holds hearings about the scandalous conditions of care in nursing homes. How the financing runs, how much moneyaides make, and how much care residents need are not prominent topics. This political drama is commonplace in most states. State budgets cannot readily accommodate escalating payments, so the focus is often just on regulations and penalties. While this complex interaction has heroes and villains on all sides, my point here is only that the communitydoes have a stake in having reliable and efficient nursing-home care, and perhaps this, too, can become a positive political agenda, pushed by a self- interested populace.

Clearly, the incentives and coverage throughout the last phase of life are adverse to patients' interests in counting on good care. What would be better?

Since each of these strategies still has substantial adverse incentives, a blend of strategies might well work best.

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