Report Finds "Perverse Incentives" Add Costs to Dying When Patients and Families Want Less

Sweeping changes to the way America delivers care at the end of life would better serve patients and their families while bringing the healthcare savings that managed care has long sought, according to the Institute of Medicine report, “Dying in America,” which was released yesterday.

The 507-page report outlines how end-of-life care falls short at almost every point in the process, from “perverse incentives” that favor putting patients in hospitals when many would rather be at home, to restrictions that keep some of the sickest patients, such as those receiving chemotherapy, out of hospice when these patients would benefit the most. In sum, the report recommends:

• Compensation and reimbursement at all levels, but especially in government-funded care, must shift from rewarding care in hospitals to providing pain management or other palliative services, including care at home.
• Professional medical societies must set standards for better end-of-life care, and payers must support them in reimbursement schedules.
• Clinicians must get better education about end-of-life care, and accrediting bodies must put more focus on this area.

Managed care organizations have long called for these changes, and some commercial insurers have made them. However, the Medicare reimbursement system is at fault in many areas cited in report; notably, it does not allow compensation for doctors to have conversations with patients about advanced care planning. Medicare is considering such a change, more than 4 years after an effort to include such a provision in the Affordable Care Act brought accusations that the Obama Administration was promoting “death panels.”

A foreword to the report takes harsh aim at those who promoted such talk for political gain, saying it set back the nation’s ability to make dying less traumatic and expensive for patients and their families. “The controversy on this topic and the political desire to avoid it do not alter the fact that every person will face the end of life one day, and many have had hard experience with the final days of a parent, a spouse, a child, a sibling, another relative, or a dear friend,” the report states.

“At a time when public leaders hesitate to speak on a subject that is profoundly consequential for the health and well-being of all Americans, it is incumbent on others to examine the facts dispassionately, assess what can be done to make those final days better, and promote a reasoned and respectful public discourse on the subject.”

Meanwhile, data in the report show that a portion of patients at the end of life account for some of the highest medical spending. Of the estimated 18.2 million persons each year who are in the top 5% for healthcare costs, 11%, or 2 million, are in the final year of life. Of the 2.5 million deaths in the United States each year, 80% were among those who incurred health care costs that put them in the top 5% of healthcare spenders.

Some of the highest spending takes place in the realm of cancer care, where discussions about palliative care can be especially beneficial. In November 2013, The American Journal of Managed Care welcomed keynote speaker Amy Berman, RN, to its conference, Patient-Centered Oncology Care, where she discussed how a less invasive, palliative approach to treating her breast cancer has given her a good quality of life.

Unfortunately, she said, that’s not how things usually happen. “We have a system that is perfectly designed for someone to show up in the emergency department, where we don’t want them to show up,” Berman said.

Reinventing the way end-of-life care is designed holds the key to both better quality care and savings. “The bottom line is the health care system is poorly designed to meet the needs of patients near the end of life,” said David M. Walker, a former United States comptroller general, who was a chairman of the panel, told The New York Times. “The current system is geared towards doing more, more, more, and that system by definition is not necessarily consistent with what patients want, and is also more costly.”

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