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Editor: Katharine Van Tassel
Akron Univ. School of Law

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Tuesday, November 27, 2007

Charming Hospice Story in the NY Times

The New York Times reports on hospice providers losing money - the attention grabbing and rather depressing headline reads:  "In Hospice Care, Longer Lives Mean Money Lost."  The article states,

Hundreds of hospice providers across the country are facing the catastrophic financial consequence of what would otherwise seem a positive development: their patients are living longer than expected.

Over the last eight years, the refusal of patients to die according to actuarial schedules has led the federal government to demand that hospices exceeding reimbursement limits repay hundreds of millions of dollars to Medicare.

The charges are assessed retrospectively, so in most cases the money has long since been spent on salaries, medicine and supplies. After absorbing huge assessments for several years, often by borrowing at high rates, a number of hospice providers are bracing for a new round that they fear may shut their doors.

One is Hometown Hospice, which has been providing care here since 2003 to some of the most destitute residents of Wilcox County, the poorest place in Alabama.  The locally owned, for-profit agency, which serves about 60 patients, mostly in their homes, had to repay the government $900,000, or 27 percent of its revenues, from its first two years of operation, said Tanya O. Walker-Butts, a co-owner. Its profits were wiped out in the time it took to open the demand letters, Ms. Walker-Butts said. . . .

In the early days of the Medicare hospice benefit, which was designed for those with less than six months to live, nearly all patients were cancer victims, who tended to die relatively quickly and predictably once curative efforts were abandoned.  But in the last five years, hospice use has skyrocketed among patients with less predictable trajectories, like those with Alzheimer’s disease and dementia. Those patients now form a majority of hospice consumers, and their average stays are far longer — 86 days for Alzheimer’s patients, for instance, compared with 44 for those with lung cancer, according to the Medicare Payment Advisory Commission.. . . .

Studies have reached various conclusions about whether hospice care actually saves money, especially for long-term patients. But a new study by Duke University researchers concluded that it saved Medicare an average of $2,300 per beneficiary, calling hospice “a rare situation whereby something that improves quality of life also appears to reduce costs.”

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