The Tale of the Vanishing Hospice Chaplain

I have been writing lately about the changes our industry is going to have to deal with in the future, and what needs to happen now. In this post, I want to deal with the scary future of hospice if these changes are not made.

Currently, hospice as a business is at a crossroads. Where it will end up is anybody's guess. My guess (or prayer) is that we end up being what hospice was created to be. We have become so much more than any of the original hospice pioneers ever dreamed we would become. It is not an overstatement to say that we are reaching the goal of changing the way our nation views and faces the end of life. Even more, we have become a driving force behind the national movements to increase awareness and access to pain management and grief counseling. What the hospice movement has become is nothing short of awesome. Unfortunately, as I've been saying in the last few posts, I believe the federal government is going to force us to downsize our ambitions. I won't rehash why I believe these changes are coming in this post. My great fear is that, when something drastic happens, the good hospices will become extinct and the only thing left is the hospice that has allowed the business side to "suck the life out of" hospice care.

This blog was created in response to those hospices out there who see hospice as nothing more than a business. There is something special and sacred about hospice, but not every hospice actually seems to understand that. Although hospice is special and sacred, hospice has become a business, but not every hospice actually seems to understand that. Some hospices are nothing but business and that results in care which is significantly lower than I believe is acceptable. Other hospices are nothing but care which results in business practices that are significantly lower than Medicare believes is acceptable. When my beliefs about minimum standards of care are forced to do battle with Medicare's beliefs about minimum standards of business practice, Medicare will win every time. They are Medicare. Thus, we, as an industry, can't put ourselves in a position to fight that losing battle. The battle we must choose is to find a way to provide excellent care within the guidelines of the financial reality of the future. As I have said, I believe that means that we must refocus our efforts on those things that are at the core of hospice care and leave behind some of our "added services".

Let me paint a small picture of what the future looks like if hospice is left to businesses with no heart. This picture will focus on only one area of care, because I believe it is the easiest example of where our industry is headed if the hospices with heart disappear. This tale is one of the Vanishing Hospice Chaplain.

The new hospice Condition's of Participation talk about spiritual care in many places, the biggest section says:
Spiritual counseling. The hospice must:

(i) Provide an assessment of the patient's and family's spiritual needs.

(ii) Provide spiritual counseling to meet these needs in accordance with

the patient's and family's acceptance of this service, and in a manner

consistent with patient and family beliefs and desires.

(iii) Make all reasonable efforts to facilitate visits by local clergy, pastoral

counselors, or other individuals who can support the patient's

spiritual needs to the best of its ability.

(iv) Advise the patient and family of this service.

There are two ways to interpret this:

1. The patient focused hospice reads this to say that we are required to send a well trained hospice chaplain with knowledge of spiritual issues and a background in grief and family counseling to do an assessment on every patient and their family. This chaplain will communicate with local pastors, rabbis, etc. and make regular visits to the family to ensure that, as the disease progresses, the patient and family's spiritual issues are cared for.
   
2. The business focused hospice reads this to say that we are required to have a member of the team inquire with the patient and their family about their spiritual background and any spiritual needs. If they say they have spiritual needs, then the hospice is required to find someone in the community who can help. If they don't say they have spiritual needs, then they should be informed that, if needs arise, they can call the hospice.
   

It is important to note that interpretation number two is an honest, logical, and acceptable interpretation of the regulations and that it does not include the word chaplain. This means that it is legal and acceptable for a hospice to completely "outsource" spiritual care. The RN or the Social Worker (which are both specifically required by Medicare) can do the "spiritual assessment" and then contact someone in the patient's chosen religious community and ask them to provide spiritual care. That approach is legal and, shall we say, "cost effective". Is it quality hospice care? I would say no. If patient focused hospices can't survive in the future financial climate, then the hospice chaplain will be a dying breed.

I tell the story of the Vanishing Hospice Chaplain because it shows that it is acceptable in the eyes of Medicare to provide care that most in the hospice community would deem below acceptable standards. This type of issue is not isolated to spiritual care, and should be a wake up call. Hospices have always done more than the Medicare standard, but now that some of those standards have changed, we are doing excessively more than the standard. Medicare wants to know what it costs to meet their standards and may soon stop paying us enough to provide much more than their standard. We must begin to focus our business practices on the core of hospice care or the entire industry could be turned over to those who see the Vanishing Hospice Chaplain as a fairy tale.

What is the main thing?

I have no clue who first said, "The main thing is keeping the main thing the main thing", but I owe them a debt of gratitude. That odd little line has helped keep me focused through the years, and it is very timely advice for the hospice industry. My last couple of posts have dealt with the necessity of hospices moving from the relaxed business practices of the past to the world of having very serious best practices in place to ensure operational efficiency. I'm sure it isn't the most popular stuff I've ever written, but I am also sure that it is something hospices must face.

Today I want to deal with what, exactly, the main thing is. Hospice, as defined by the Hospice Medicare Benefit, is the main thing.

Hospices today often do so much more than what they did twenty five years ago. Just because a hospice does something doesn't mean that it is hospice. Your hospice may provide community wide grief support, but that isn't hospice. You may do Palliative Care, but that isn't hospice. You may do parental hospice care, but Medicare wouldn't call that hospice. You may have a beautiful Zen garden, but that's not hospice. Children's grief camps are not hospice. All of these things are great; they are needed and important, but they are not hospice.

I am not saying that hospices should not be doing these things! I'm just saying that these things are not the main thing. If your hospice does things that are not part of what Medicare considers hospice care, then you need to make sure these "extras" don't become a financial drag that puts your company at risk. Every hospice needs to give serious thought to the expenses associated with these non-hospice activities and what activities may have to be cut if the hospice payment rates are significantly changed. We have all gotten comfortable with the idea that hospice does all of these wonderful things. We've adopted the attitude that a hospice that doesn't do all the things we do isn't a good hospice. Hospices that only do hospice are soooo yesterday.

I believe hospices that only do hospice may be the wave of the future. We get paid to do hospice, and that may be all we can afford to do in the future.

We don't have to close down the counseling center today, but it is time for us all to start to remember what the main thing really is. Hospice is an awesome sacred thing. Let's all, as an industry, take a step back and remember to keep the main thing the main thing. I would hate to see good hospices going out of business because they had lost sight of how awesome and meaningful their core task really is.

Financial Efficiency – it’s no longer an option

As I mentioned earlier, I believe there has been a real resistance within the hospice community to accept the fact that hospice is a business and that we need to adopt best business practices. In my mind, Andrew Reed of Multi View Incorporated has been the industry's John the Baptist as he has been carrying this message through the wilderness for years. He has been preaching financial accountability, visit tracking, and benchmarking for a dozen years now, and we have finally reached the time where listening to the message is no longer an option. In this post I want to explain why I think having less than solid business practices is no longer an option.

First, burying your head in the sand and wishing for the days when hospice was an all volunteer movement was never a good idea. Some have done this for a few years now, and survived. I believe the changes that have come in the last three months have proven that, not only are we never going back, we are going to be forced into more and more accountability in the coming years. Let's look at what has happened and the possible future impact:

1. CR 5567 has forced hospices to report the number of visits made to each patient each week by a specific discipline. Medicare has never asked hospices to actually report what they are doing for their patients. Now we are reporting exactly how many times we see them each week. A year before this visit reporting was mandated, they required hospices to begin reporting where each patient received services. They have told us that they have no real plans to use any of this data to change the reimbursement system, but any logical person knows that isn't true. If they collect and analyze this data, why in the world wouldn't they use the data? (Yes, you could argue that our government collecting data and doing nothing with it would be less than shocking, but I think we better assume that they may actually do something here.) What could come from the analysis of visit and location information? Ask home health! If the data shows that a dementia patient in the nursing home receives half as many nursing visit as a cancer patient at home, then wouldn't it follow that they may decide that we should get paid less for the dementia patient in the nursing home? If we are on the path to a payment system based on the diagnosis, location, and acuity of the patient, then we better be ready to operate our hospices in a way that we can deliver great care within that system. The only way to do that is to have in-depth knowledge of your staff's efficiency and ability. Too much staff doing too little work is not an option in a home health type payment system. It just will not work.
   
2. The new Medicare Hospice Conditions of Participation have set our industry on a quality centered path that will never stop. Each year we are going to be held accountable for finding those things that we don't do well and fixing them. When you get one problem solved, then you must find another one and solve it. Each year you will be required to find a new problem, solve it, and check to make sure that the problems you solved in previous years are still solved. It is a program that will grow. For the next couple of years most hospices will be able to pick the low hanging fruit from the quality improvement tree. They will "identify" the problems they already knew existed and implement solutions they already knew would work. The problems will probably not be of any real serious nature and the solutions won't take a whole lot of time or energy, but at some point, we'll actually have to start taking on some very hard projects that will take time and money to fix. That is the nature of the Quality Assessment/Performance Improvement process. (That is also why it is a great idea.) Thus, as time goes on, we will have more work.
   
3. The rate cuts should be the biggest wake up call. While it seems that NHPCO holds out hope that the rate cuts may still be defeated, I believe that is immaterial to this discussion. We must remember that when we started this round of possible cuts we were facing a cut in the actual rate (or the lack of rate increase for a few years) and a cut in the wage index. We dodged one of the bullets this time, but there is little doubt that the belief (valid or not) that hospice is an industry that could use a bit of belt tightening is somewhat widely accepted in Washington. We have avoided much of the significant pain to date. Even if we continue to avoid significant cuts, we must expect nominal pay increases at best in the future.
   

All of this adds up to an environment where we, as an industry, must deal with our financial reality. At best, our payment rates are going to remain even. Odds are, they are going to get worse. That means that any hospice that is having trouble making their financial ends meet today, is, at best, going to continue to struggle and odds are they are going to be in real financial trouble soon. Those hospices must make some changes to their business practices. Hospices that are doing fine today but couldn't withstand a negative change in the payment structure better start looking at what they will do if the other shoe drops. In reality, they should start making changes today so that when the other shoe drops they have some money in the bank to survive the crazy period.

Now that I have you in a really cheery mood, let me kick you while you are down, because I think there is one more downturn that is coming that nobody is talking about. I believe that hospices that live and die by the donations they receive are going to struggle, because I think fund raising for hospices is going to get much more difficult. I think the ongoing fight over the hospice cap has raised and will continue to raise awareness across the nation that hospice is in fact a business and that some in the industry are not quite the wonderful white hat wearing heroes the public has always associated with hospice. Those donors are going to start asking more questions and giving less money. As the battle over Medicare reimbursement and the reality of the hospice industry get more public attention it will increase public awareness of the reality of the hospice industry even more and donors will become more leery of donating to a hospice. I read an article recently that quoted a hospice that has to raise $20 for every patient day, because their expenses are that much higher than the reimbursement. Twenty bucks a day is a huge amount of money! If your donations drop and Medicare payments drop, you will not survive. One or both of those painful experiences are in your future and both could be. Are you going to bury your head in the sand or start preparing?

The commenter is right. Those who are not being responsible with their money and running their business like a business will not be reading this blog in a few years. They will be doing something else for a living. I'll talk about what preparations may need to be made in a later post.

Hospice is a business.?.

A commenter on the previous post about the Medicare Hospice Benefit rate cut asked if, "the 'average' profit margin for hospice has a lot of built in inefficient and wasteful hospices"? In his mind, if the average profit margin of hospices is being dragged down by a lot of hospices that are not being run well, then those inefficient hospices are the ones who will go away, and that's not such a big loss.

I agree 100%. There is no doubt in my mind that there are a lot of hospices that run their organization poorly. In fact, I believe there are some hospices who wear their inefficient (or poor) business practices like a badge of honor. Often, when I hear non-profit hospices talk about the evil practices of for-profit hospices, their examples of evil are the for-profit's focus on efficiency or tracking of minute financial details. In my mind, those are examples of good business practice, and we are far past the day when hospices can act like they are not a business. Every company in the nation tracks employee workload and works to improve efficiency, but some hospice professionals claim that this type of accountability "sucks the life" out of hospice care. They refuse to track things like the average number of visits each nurse makes, even though the visit is the core component of hospice care. If one nurse can make 20 visits a week and do the job well but another one can only do 15, then wouldn't it make sense that you would want to review the practices of the 15 visit nurse to find out where that extra time is going? Either help that nurse figure out how to make 20 quality visits or hire another nurse to pick up the slack. That's just common business sense, but I wonder how many hospices across the nation don't even track that type of information. How many don't even know that one of their nurses isn't working up to a minimum efficiency level? Is there really anything wrong with collecting that type of information to make sure your organization is running well?

I have three different things I want to look at on this subject.

1. Why inefficiency can no longer be tolerated.
   
2. The very hard changes that hospices are going to have to accept – or making sure the main thing is the main thing.
   
3. The scary cuts that I pray won't have to be made – or why the hospice chaplain may become extinct.
   

Those posts will come another day, but it is time for the hospice industry to understand that we are being treated as a business. If you don't accept that fact and start acting like a business you may not be providing care at all in a few years.

Medicare Cuts Hospice Payment Rates

Medicare has published the wage index and payment rates for FY 2009, and the announcement is the finalization of one part of the feared rate cuts. Of course, that isn't quite how CMS sees what it has done. They actually put out a press release that packages the whole thing as hospices getting a pay raise. Let me explain what's happening and then tell you why this is really bad timing.

First, to understand how hospices can claim their rates have been cut while the government claims they gave hospices a pay raise, you must understand that there are two parts to the formula used to figure hospice payment rates. This explanation is overly simple, but good enough for our purposes. The first part of the formula is the national hospice payment rate. It is the amount of money that Medicare pays for a day of hospice services. The second part of the formula is the wage index, which basically accounts for the fact that it costs more to provide care in some parts of the nation as opposed to other parts. Typically, it costs more money to provide care in metro areas than in rural areas. Thus, the wage index assigns a "multiplier" to every county in the nation. To make the math easy – if the payment rate for a day of service is $100, an area that has a multiplier of 1.1 will actually get paid $110 per day while a hospice with a multiplier of .8 will only get $80 a day. With that in mind, let me explain how hospices across the nation got a pay raise and a pay cut in the same day.

Medicare's press release focuses on the 3.6% increase in the hospice payment rate. Thus, that $100 per day of service will become $103.60 next year. The payment rate is increased every year, it is a raise that reflects the increase of the cost of living… Hospices know it is coming and know that it is usually around 3%. Thus, Medicare's press release focuses on the normal pay raise that hospices get.

The pay cut comes on the wage index side of the formula. I'm not going to talk here about why this was done, because it makes my head hurt and involves much technical Medicare mumbo-jumbo. Basically, the wage index is the somewhat stable side of the formula. Yes, it changes every year, but most of the time you are look at a tenth of a percent here or there. Every once in a while a few counties across the nation get a major increase or decrease when Medicare determines that they are now metro areas or are no longer considered metro areas, but overall not much changes on the wage index side. This year, Medicare decided to totally phase out the "hospice wage index" and move hospices to the "hospital wage index". Again, for reasons I don't care to explain and you probably don't care to understand, there were significant differences in the two wage indexes. In fact, the differences are so large, that they are going to allow this transition to be phased in over a three year period to ease the pain. According to Medicare, the average hospice's pain will be a 1.1% decrease this year. Some are in much more trouble than that.

Again, to do the simple math. Hospices got a 3.6% raise because the cost of living has increased. It is a much needed raise. Then they took away 1.1% of the raise. Instead of the $103.60 a day, hospices will only get $102.50. Is that better than the $100? Yes. Is it enough? No.

My employee's health insurance premiums rose 12% this year. The cost of gas, which is a huge expense for my employees at our rural hospice, has dang near doubled this year. Last but not least, those saints that show up every day and provide excellent care to dying people and their families deserve at least a nominal pay raise each year. Now, when you look at salaries, benefits, and mileage, you are looking at around 80% of a hospices expenses. Where do you propose I skimp next year?

According to the government the average hospice makes a profit of 3.4%. At the same time, the three year effect of this wage index change is 4.8% for the average hospice. (Both numbers are from NHPCO communications.) That math doesn't work in the best of times, and these are not the best of times. Medicare has already established new rules to govern hospice care, and those rules will not be cheap to implement. Those rules are going to cut out some of the 3.4% profit. This new wage index change will take all the wind out of many hospice's sails.

Make no mistake, some hospices are going to go out of business unless something changes. I just don't see any way around it. Those that survive will most likely have to change the way they provide care. Since hospice saves Medicare money and is the most popular benefit Medicare has going, why in the world are they going to force us to either change or die? I'll have to let you answer that question yourself. I can't write an answer without sounding like some guy who is going to show up at the capitol building with a torch and a pitchfork.