Who Knew? Inpatient Palliative Care Also Saves Money

Roxanne Nelson, BSN, RN

September 12, 2016

San Francisco — Inpatient palliative care improves quality of care and patient and family satisfaction, and it can also cut costs.

Researchers from Johns Hopkins Health System in Baltimore, Maryland, found that in addition to improving quality of care and patient satisfaction, the combined inpatient and consultation palliative care programs contributed to substantially lower charges and costs per day.

According to their analysis, the fiscal impact of an inpatient palliative care program could save them almost $4 million a year.

Over a 5-year period, they would be looking at savings of more than $19 million.

"Our mantra is it's better care at a cost we can afford," said senior author, Thomas J. Smith, MD, a professor of palliative medicine and oncology at Johns Hopkins.

We never set out to save money Dr Thomas J. Smith

"We never set out to save money, but we thought if we discern people's wishes as to what they want and then put in place a team to manage those wishes, you might break even," Dr Smith told Medscape Medical News. "That was our initial hypothesis. But it turns out that we did more than break even."

The study was presented here at the Palliative Care in Oncology Symposium (PCOS) 2016.

Johns Hopkins Medicine is preparing to expand the palliative care unit from 6 to 11 beds and increase the inpatient palliative care consultation capacity across the health system.

"We set out to see what the financial impact would be on the institution, because the perception is that palliative care and hospice is at best a break-even situation or a financial loser," said Dr Smith. "But we showed that it saved the health system and society more than enough money to cover the cost of these services."

"It's one of those things — that the bigger you expand it the more it works," he added. "Patients are happier, they are more satisfied, they are less depressed, it helps control their symptoms and also helps their caregivers — and as a bonus, it saves money."

Millions in Savings

Dr Smith and his colleagues estimated the savings for an 11-bed palliative care unit based on the cost per day from fiscal year 2015 with a 6-bed unit ($444 lower costs per day compared with hospital inpatient stay before transfer to the palliative unit).

They then calculated the cost savings for an 11-bed unit operating at 80% occupancy and estimated the direct cost savings of consultations by using established methods.

"The estimates in this study are based on our prior experience, so when we open the 11 beds, this is what we believe it will be," Dr Smith said.

The savings are primarily attributed to avoiding hospital admissions during the last 30 to 45 days of life, he explained. "So patients may end up not being hospitalized, and will be at home, where most of them want to be."

The estimated savings from the 11-bed palliative care unit was calculated out to $1,336,000 per year or $6.7 million over 5 years.

For palliative care consultations, the total estimated savings in direct costs per case were $2,530,000/year, or $12,650,000 over 5 years.

Combined, the total annual savings was $3,866,000, and $19,330,00 for a 5-year period.

It is important to have conversations with the patient about 6 months before they are expected to die, Dr Smith pointed out, so that they can think about and clarify what they want.

"It really changes the whole tenor of the end of life," he said. "They only have weeks or months to live, so let's make the best of it. Let's make sure that we get them home, and that their caregivers also know how to take care of their loved one."

Commenting on the study, Andrew Epstein, MD, a medical oncologist from Memorial Sloan Kettering Cancer Center in New York, New York, noted that "it's a welcome downstream effect."

"We haven't done a cost analysis at Memorial Sloan Kettering," he explained, "But at my previous institution, Mt. Sinai, we did quite a bit of analyses and found that it was cost saving."

Studies like this one show that palliative care not only helps patients but also can save money, Dr Epstein said. "But the question is how to make it scalable, since there is such a workforce shortage of palliative care specialists."

The study was funded by the Canadian Institutes of Health Research, a National Cancer Institute grant to the Sidney Kimmel Comprehensive Cancer Center (at Johns Hopkins), Patient Centered Outcomes Research Institute. Dr Smith disclosed stock and other ownership interests with UnitedHealthcare. Dr Epstein has disclosed no relevant financial relationships.

Palliative Care in Oncology Symposium (PCOS) 2016. Abstract 173. Presented September 9, 2016.

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