By PK Hattis, Santa Cruz Sentinel, Calif. The Tribune Content Agency
SCOTTS VALLEY - The health care landscape has changed a lot in the past 42 years, but for hospice care providers, some things have remained remarkably consistent.
The end-of-life-care program became a Medicare benefit in 1982 and the terms of that relationship have remained relatively untouched ever since then. This includes the reimbursement model, which has made the financial logistics relatively straightforward and allowed hospices all over the country to focus on delivering other aspects of their service.
But that reimbursement process is about to be upended in only a few years and it has caused a handful of hospice providers, including a branch in Santa Cruz County, to form a regional partnership in hopes of ensuring the unique health care service endures for decades to come.
Hospice of Santa Cruz County, founded in 1978 when the hospice movement was in its infancy, announced it has locked arms with four other nonprofit hospices and health care organizations to form Chapters Health West - a coalition that will allow the organizations to pool resources ahead of an era of reimbursement model upheaval.
"We've been here for 47 years; we want to be here for another 47 years," Hospice of Santa Cruz County CEO Cathy Conway told the Sentinel in recent interview from her office in Scotts Valley. "What got us here for the last 47 won't get us to the next 47 because these changes are happening."
Conway explained that hospice has a partitioned payment model with Medicare, which is the provider for the vast majority of the insurance patients it serves. Right now, Medicare and hospice operate within a fee-for-service framework, where payment is tied to the number of services provided. A key benefit of the current relationship, she said, is that Medicare essentially operates as the group's sole insurance provider, making reimbursement totals predictable and timely - a rarity in many other sectors of the health care industry.
However, after being faced with increased financial struggles, Medicare is now planning to include hospice within a value-based program model that concentrates on measuring and incentivizing quality and efficiency of care, as well as positive patient outcomes as opposed to volume of services delivered. This isn't such a bad thing, mused Conway. She believes it will give the hospice branch she leads an opportunity to demonstrate how its services have played a key role in reducing hospitalizations, improving symptom management and enhancing the overall patient and family - or chosen family - experience.
Where this does pose an issue is how it impacts the reimbursement structure. Under the value-based model, Medicare will spin off some of its services through other insurance providers such as UnitedHealthcare or Blue Shield of California that will then bill hospice directly.
"All of them can say, 'We'll pay you something different,'" said Conway. "That's where it's going to get tricky for us."
Medicare has already launched a few projects to demonstrate this concept, through programs such as Medicare Advantage, but Conway said those reimbursements have come in 12% lower compared to what hospice is used to getting when it works directly with Medicare. In a county where the cost of living is higher than ever and continues to grow, that reduction makes all the difference.
"How do we prepare for this? If that's actually going to be the reimbursement in the future, what are we going to do about it?" said Conway. "Because we can't have a 12% reduction and still pay our staff to do the jobs that they do."
That's where this new partnership comes into play. The forward-thinking collaboration includes the Santa Cruz location, Hospice East Bay, Nathan Adelson Hospice in Las Vegas, Willamette Vital Health in Oregon and Chapters Health System, a Florida-based nonprofit focused on home health services including hospice and palliative care. The groups will now be able to pool their knowledge and resources, in part, to leverage as one group when it comes time to negotiate reimbursements.
"We are building a future where we can do more, innovate more and serve more," Andrew Molosky, president and CEO of Chapters Health, said in a release. "By aligning our strengths, we will continue to deliver exceptional care while expanding our capacity to meet the growing needs of those navigating serious illness and grief in our communities."
Hospice of Santa Cruz County serves about 157 of the 245 Medicare beneficiaries receiving hospice in the county - a large share of the local population, but a relatively minor total to a private insurer negotiating rates. Through this partnership, all five nonprofit groups will be representing about 6,500 daily hospice patients and can negotiate together - something that Conway says the insurers even indicated a preference for.
Marine Corps veteran Michael Leahy is thanked for his service by Hospice of Santa Cruz County's Rafael Garibay during a Veteran's Day pining ceremony at Aegis Living in Aptos this week. The hospice's mission is to provide end-of-life care to patients with a life expectancy of six months or less. (Shmuel Thaler - Santa Cruz Sentinel)
Still, despite the new partnership and coming era of reimbursement changes, Chief Mission Officer at Hospice of Santa Cruz County Diane Syrcle made a point to assure patients that these moves are all meant to shore up the business end of things, specifically so that the care can remain the same.
"What is wonderful with this affiliation is we're still 501(c)3 nonprofit, our Medicare number doesn't change, our business model doesn't change; we have a local board," said Syrcle. "It's local philanthropy, local leadership, local decision making as part of a structure that is larger."
Hospice is made available to people with a life expectancy of six months or less, with a focus on management of symptoms and relief of suffering. Services, many of which extend beyond what is covered by Medicare, are overseen by a hospice physician/medical director and may include regular nurse visits, administration of medications, palliative care, use of medical equipment and supplies, spiritual counseling and grief support for patients, as well as those they choose to be a part of their health care journey.
News of the collaboration comes at key inflection points both for the elderly population in Santa Cruz County and the broader hospice landscape. The county's population of residents aged 65 to 84 is growing faster than any other county in the state and has increased by more than 80% since 2010. At the same time, a massive proliferation of for-profit hospices has popped up across California, causing state officials to pause issuance of new licenses in 2022 in the face of market saturation and rampant fraud.
Hospice of Santa Cruz County is one of eight providers of hospice care in the county, according to Syrcle, but is the only one that holds a nonprofit status.
"We're in this for our community," said Syrcle. "We want our community to have the same care that we one day will receive."