What can independents do about vertical integration?
What can independents do about vertical integration?
Hospices seek solutions for the larger system
(The cover story in last month’s Hospice Management Advisor explored the implications for hospices of the larger health care system’s evolution toward vertical integration. In particular, it posed the question whether becoming functionally integrated into the end-of-life care delivery and re-engineering processes of emerging health systems requires that the hospice be owned by the larger system.)
Ownership by a health system should not be a goal in its own right but evaluated as a potential means to an end. And the end is preserving and extending the hospice philosophy and hospice expertise in end-of-life care for more dying patients in short, transforming the medical culture of dying in America. The stories of two hospices which are charting their own path to the future as (mostly) independent agencies, building ever closer working partnerships with health systems in their communities, are presented on pp. 115, 116. These stories remind hospices not to put the cart before the horse.
In the current highly volatile health care environment, several things seem certain. Hospices now serve only one in six dying Americans, a fact which has persuaded some in the larger end-of-life movement that hospice may have become outmoded or irrelevant to their efforts. At the same time, hospice’s clear association with dying and with an explicit terminal prognosis has led some potential referrers and clients to view it as "too depressing" or "not customer-friendly."
Hospices are also wrestling with ever-shrinking lengths of stay, which challenge their financial survival at the same time federal and state regulators question them about enrolling hospice patients who are not demonstrably terminally ill. The Medicare hospice benefit is being re-examined on a number of fronts, even by the National Hospice Organization (NHO) in Arlington, VA. (See related story, p. 117.) And some anticipated changes for the larger health care system seem not to have emerged as quickly as futurists once predicted.
"I’ve been thinking a lot lately: What does this all mean?" says Patricia Murphy, RN, hospice coordinator for VNA and Hospice of Northern California in Emeryville. "The first time we heard about vertical integration was at the first NHO Management Meeting in St. Paul, back in 1985. Well, it’s 1997, and there still are a lot of freestanding, unaffiliated hospices, and maybe some of them are thankful they didn’t jump on the [merger] bandwagon. Maybe some of the changes are slower than we expected," she observes.
"Is the answer as simple as doing good, slow, deliberate strategic planning and decision making?" she asks. "Maybe what we need is values-based analysis, instead of just basing our decisions on financial survival. Maybe it’s time to go back to our grass-roots," she says. "Are there other ways to preserve hospice’s mission by improving your agency’s value added, by improving your breadth of services, by improving your program’s access to knowledge and technology and dying patients’ access to your services?" she wonders.
"Do we need to be branching out into new product lines, taking a leadership role, for example, around development of programs for people with chronic disease?" There is a large population of chronically ill elders who don’t fit hospice’s six-month prognosis requirement, yet need specialized support, Murphy says. "What does it take for somebody to start a new product line? It takes brains, creativity, a good idea, time, money, and energy. It’s very hard for a hospice to do that with a census of only 50 to 100 patients."
Murphy’s agency has launched a new joint venture with a Bay Area medical group, aimed at applying hospice expertise to the larger chronically ill elderly population. VNA’s hospice medical director Brad Stuart, MD, reports that this new program has served its first group of 10 patients, using a geriatric nurse practitioner and a social worker/case manager and is now seeking research funding to document the results. The program also uses the VNA’s hospice, home care, and home IV services to help stabilize patients at home.
The genesis for this project lies in the discovery that many of the expensive episodes of acute care experienced by high-risk seniors on Medicare HMO plans served under capitation by the local medical group had non-medical, psycho-social causes, Stuart says. The pilot project is pursuing "the ideal of high-quality end-of-life care for high-risk seniors and stabilizing them on purpose," in contrast to Medicare home health and hospice models, which say patients need to be discharged when they are stabilized. "At the same time, we’re factoring them, at their own speed, into appropriate end-of-life care," including the Medicare hospice benefit.
The project is also exploring enhanced coordination with emergency departments and hospitals, perhaps using a patient identification bracelet, "to make sure they don’t get sucked into futile aggressive treatment," Stuart explains. "We also want to make sure we are determining their treatment wishes, such as advance directives, and the caregiver’s status will also be monitored and supported. All of the things we pay attention to in hospice, including the psycho-social aspects, we absolutely have to pay attention to in this program in order to keep these patients at home and stable. We’re discovering what is good medical care for high-risk seniors."
The project is funded through a combination of subcapitated payment for home care services, home health and hospice benefits (when appropriate), plus some additional money from the medical group. "My sense is that eventually, assuming this works, the medical group will increase our global cap by a small amount to cover these services. Everybody is looking for ways to stabilize these patients at home before they get caught up in acute hospital imperatives. I believe you can achieve better results at lower cost and with higher satisfaction if you can impact care farther upstream," Stuart adds.
Is this the future of hospice? "I’m not sure you can superimpose this template on hospice. This is one way, I think, of providing excellent medical/social care in the home like hospice. Everybody is asking for hospice-like care out from under hospice’s six-months-or-less noose. And I think this program fulfills a majority of those needs," Stuart adds, although it probably could only be done with a full-service home care agency and a partnering capitated medical group.
David Rehm, ACSW, CEO of Hospice Care of Rhode Island in Pawtucket, has been touted in the industry as one of the leaders of the vertical integration trend since his agency engineered a 1995 merger into the state’s Lifespan integrated health delivery system.
Today, Rehm says he remains upbeat about the opportunities this move has opened to reach a broader patient population, using hospice’s "core competencies." Although he remains an advocate for hospice taking its place within integrated systems, Rehm acknowledges that the ultimate challenge has more to do with redefining hospice to meet the needs of other partners and patients in other settings than with who owns what.
"We sat down recently with the system’s large oncology group to talk about how to bring hospice approaches to oncology patients. We decided to look at it simply as a service and not try to name it, but to really focus on how to bring the service to the patient." The partnership will start with some staffing a nurse and social worker and a research component, and will be based in the oncology practice’s clinic settings, "taking lessons learned from hospice delivery but doing it as palliative care consultation," Rehm explains.
"That is all stuff that a freestanding hospice can do as well. If you look at it as research and development, funded from whatever source, the process from outside the system ultimately is not any different than doing it from within, although the value for us is that we can get into doctors’ offices more easily," Rehm says. "It’s really about identifying your core competencies and taking them to a new setting. Your core competencies tell you what you bring to the table. But you shouldn’t try to tell them how to do it. Instead, listen to their problems. They have competencies, too."
Independent hospices sometimes complain that they can’t get in the door with health systems, Rehm says. "Ask yourself, Why is it we’re not getting the respect we think we’ve earned?’ I think they see us as doing good, competent clinical care within a narrowly defined niche. When we start to go outside of that niche, we don’t carry as much credibility. Part of it is because we have defined end-of-life care in terms of our niche. Offering hospice-lite really doesn’t go where we need to go. I’m talking about experimenting with new program development. Let’s look at end-of-life care afresh and then see what we can do. That’s one way to begin to establish credibility."
Hospices may also need to think in terms of research and development running an experimental laboratory of new product lines while continuing to offer their core service, which is the Medicare hospice benefit. "That’s not a unique problem any innovative service operates the same way. You try to build a new core competency for yourself and then try to market it. If you have an idea that you think will be cost-effective and improve quality of care, you ask who will benefit from it, and you go to them. Nowadays, you have to make the investment and demonstrate the value first," because nobody is going to pay for an unproven service, Rehm says.
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