Exemplar Late-Life Communities Five Years Later - The Role of the HPM Physician

In previous posts, we've featured interviews with physicians currently practicing Hospice and Palliative Medicine (HPM) in exemplar late-life communities, as identified by DAI Palliative Care Group in its study of end-of-life care data from the Dartmouth Medical Atlas. We're also followers of the Institute for Healthcare Improvement (IHI), and have followed closely IHI's identification of regions where high-value (low cost, high-quality) medical care is provided. One of our present studies is taking a closer look at the role of the HPM physician today in those communities identified both as exemplar late-life regions AND high-value medical care regions.

For more background on this issue, have a look at earlier posts for the regions of Grand Rapids,
Asheville, and Grand Junction. And for a look at exemplar late-life care hospitals, read here. More will follow in future posts. And, of course, your comments are invited.

What's the Right Amount of Practice Subsidy?

Why does a particular Hospice and Palliative Medicine (HPM) practice require more support than another? This is one of the most common questions I am asked. While there is no data to indicate what a "typical" subsidy may be, it is helpful to understand why the amounts vary so widely from one practice to another.

First, there isn't a uniform definition of subsidy. Some refer to subsidy as the difference between a practitioner's guaranteed salary (some will include benefits as well in this figure) and the amount of professional fee revenue generated. Others will carve out non-clinical time (such as administrative activities) from the subsidy calculation, and will treat that portion of practitioner compensation as an administrative expense. It's not unusual to see this difference in definition amount to $50,000 annually per practitioner.

Some other common reasons for the wide variance in subsidies:

Documentation, Coding, Billing, and Collecting

This is an area in which many, if not most, practices have room for improvement. One simple way to estimate how your practice is doing in these processes is to think about how you're performing on the following tasks:

Do all HPM practitioners understand the documentation requirements for each CPT code, and is their performance in selecting CPT codes audited regularly (we suggest at least yearly)?
Does the practice have a reliable method of charge capture that minimizes problems like lost charges?
Is there an established "chain of custody" of this information, from the HPM practitioner to the biller?
Is there a periodic review or audit of the biller's performance?
Does the practice monitor metrics, such as days in accounts receivable, collection rate. An audit could be as simple as reviewing ten billed encounters within the past three months for each practitioner, and identifying the status of each bill (e.g., paid, written off, or perhaps the bill has vanished or never made it into the billing system).

Payor Mix
The payor mix for most HPM practices is primarily Medicare, but in those areas with heavier penetration of Medicare Advantage plans, the contracted (negotiated) payment from the Medicare Advantage plan may be significantly different from the standard Medicare reimbursement.

Practitioner Productivity
Some hospices and hospitals have systems of care that interfere with HPM practitioner productivity. These could be such things as a poorly organized medical record, an IT system that requires logging into multiple programs to retrieve data on a single patient, or practitioners being expected to do clerical work. Every practice should think carefully about the systems and activities that might be getting in the way of efficiency.


The "right" amount of subsidy is a judgment call, and so will vary from practice to practice. A solid understanding of the factors behind the wide variances in subsidies, and an evaluation of those factors specific to your practice, will be valuable in determining your "right" amount.

Palliative Care Grand Rounds - May 2010

Have a look here for the May issue of Palliative Care Grand Rounds, hosted this month by Thaddeus Pope at his blog Medical Futility.

How Do They Do That? - Providing High-Value Late-Life Care

More than 10 years ago, the Robert Wood Johnson Foundation funded a study that analyzed Americans' values, opinions and attitudes concerning end-of-life care. Based on in-depth focus group discussions involving 385 Americans in thirty-two cities as well as two sets of follow-up interviews, The Quest to Die with Dignity identified how Americans then thought about death and dying, how they want to be treated, and how they viewed planning documents such as living wills.

Some suggest that those participating in the study share similar, clearly articulated concerns, hopes and beliefs about the process of dying in America today. Dying well, for most of these Americans, means dying pain-free, relieved from all suffering. For many, it means dying at home, surrounded by loved ones, and untethered to machines.

Are there communities that do a better job of complying with patient preferences? Communities that could be considered "bellwethers" or "exemplars", communities where high-value late-life care is provided? Using data drawn from the Dartmouth Medical Atlas, such communities can be identified.

Recently, the Institute for Health Care Improvement(IHI), an organization led by Don Berwick, MD, who will soon be leading CMS, identified ten communities where high-value care is being provided. We've taken a look at those communities, to analyze whether there's a connection between their success stories in providing high-value health care and their performance around late-life care. and we've found that some regions do provide high-value health care and patient-centered late-life care.

A previous post on this blog took a closer look at Asheville, North Carolina, one of 10 communities identifed by IHI in their How Did They Do That? study. Among the lessons from the IHI study:

Some patterns: a culture of collaboration to put patients first; considering finances as a constraint, not a goal; the importance of physician leadership; the real or virtual integration of delivery systems across the continuum of care; the importance of strong primary care; the value of electronic health records and the information-sharing it makes possible; and an emphasis on measuring and reporting data on quality and utilization.

We'll take a closer look at some of these communities, in an effort to better understand why some regions' late-life practices produce outcomes that match patient preferences better than other regions.

Compensation Conundrum

I'm asked from time to time what are the prevailing compensation rates for HPM physicians. The follow-up to that question is often, "what are the most common compensation models?"

The most common compensation model for HPM Practitioners is a guaranteed (straight) salary. Guaranteed base salary is straightforward, thus simple to implement. Its greatest value is in its simplicity. But one of the results of straight salary is that often role confusion emerges, because expectations are not clearly articulated, and often misaligned.

We are beginning to see variable (incentive) pay used more frequently than in the past. Base salary with incentive (or what we refer to as a hybrid model) is becoming more common -- where base salary is set, we've found, is critically important to how meaningful are the incentives. Conventional wisdom suggests that at least 20% of compensation should be at risk for the incentives to alter behavior.

Choosing metrics to be used for incentive pay, however, is a daunting process, and it is why straight salary remains the most common plan today. Yet, choosing metrics is a highly valuable process, and the mere exercise of that process yields substantial benefits. In a compensation plan with incentives, the key stakeholders will sit down and eventually come to an agreement on which metrics are most important, and then quantify those metrics. It is a process we refer to as "valuing physician activity".

Incentive pay is typically based upon a work effort metric (such as RVUs, collected revenue, patient visits/encounters). There are metrics in addition to work effort, although at present their use in HPM compensation plan design is uncommon. I'm familiar with a couple of hospices that require a quality gate be passed through before incentives kick in. I'm familiar with plans in which exceeding certain scores in family satisfaction surveys will trigger a bonus payment. And there are a small but growing number of compensation plans that reward what we refer to as group citizenship -- or activities such as committee participation, or mentorship.

The metrics that are used, in the end, are not as important as the process of valuing physician activity.

Different Paths, But Same Destination

I've learned that there are many paths to a full-time practice in Hospice and Palliative Medicine(HPM).

Two physicians (Drs. Cote and Martin) with thriving hospice and palliative medicine practices are profiled in the most recent issue of HPM Practitioner. Both started in private practice, one in internal medicine and the other in family medicine. One put down roots in his native Rhode Island after completing his residency, started working part-time for the local hospice and gradually increased his role until the hospice position became full-time 21 years later. The other has practiced in diverse hospice settings and moved his family cross-country several times in pursuit of opportunities for career development. But both are doing the work they love in hospice and palliative medicine full-time, seeing patients while building innovative end-of-life care programs.