Estimating the cost-savings of a comprehensive hospital-based palliative care program.

Abstract

2 Background: In FY 2012, Johns Hopkins Medicine (JHM) established a palliative care inpatient unit (PCU). The PCU received patients as transfers and direct admissions. PCUs can improve care (Roza K, et al. JPM 2015) and lower per diem costs compared to usual care (Smith TJ, et al. JPM 2003; Goldstein J, et al. JPSM 2015). This project studied the financial impact of the PCU and PC program on JHM. Methods: Using one fiscal year of admissions, the team calculated the per day variable cost of pre-transfer in to palliative care (from ED) and palliative care transfer. These fees were multiplied by the number of patients transferred to the PCU (153) and by the average length of stay in the PCU (5.11 days). These variable costs were added together to reach the combined savings. Consultation savings were estimated using established methods (Morrison RS, et al. Arch Int Med 2008; adjusted to 2014 dollars). Results: The PCU operated at 54% occupancy in the first year. The daily loss pre-transfer of $1,672 was reduced 59% to $785 post-transer. Over 60% of transfers came from the ICU, freeing beds. The PCU saved JHM $367,751 in direct costs; additional cost savings for PC consultation were estimated at $4.3M (1,335 live discharges × $2,374, 165 decedent discharges × $6,872) and $370,000 was collected in professional fees, for a total contribution of approximately $5M. Conclusions: The PCU and PC program had a favorable impact on the health system. As JH moves to an acountable care organization model being both provider and insurer, such improved quality, cost savings, and increased ICU availability are desirable.