Impact of a New Palliative Care Program on Health System Finances: An Analysis of the Palliative Care Program Inpatient Unit and Consultations at Johns Hopkins Medical Institutions

Abstract

Purpose: Palliative care inpatient units (PCUs) can improve symptoms, family perception of care, and lower per-diem costs compared with usual care. In March 2013, Johns Hopkins Medical Institutions (JHMI) added a PCU to the palliative care (PC) program. We studied the financial impact of the PC program on JHMI from March 2013 to March 2014. Methods: This study considered three components of the PC program: PCU, PC consultations, and professional fees. Using 13 months of admissions data, the team calculated the per-day variable cost pre-PCU (ie, in another hospital unit) and after transfer to the PCU. These fees were multiplied by the number of patients transferred to the PCU and by the average length of stay in the PCU. Consultation savings were estimated using established methods. Professional fees assumed a collection rate of 50%. Results: The total positive financial impact of the PC program was $3,488,863.17. There were 153 transfers to the PCU, 60% with cancer, and an average length of stay of 5.11 days. The daily loss pretransfer to the PCU of $1,797.67 was reduced to $1,345.34 in the PCU (−25%). The PCU saved JHMI $353,645.17 in variable costs, or $452.33 per transfer. Cost savings for PC consultations in the hospital, 60% with cancer, were estimated at $2,765,218. $370,000 was collected in professional fees savings. Conclusion: The PCU and PC program had a favorable impact on JHMI while providing expert patient-centered care. As JHMI moves to an accountable care organization model, value-based patient-centered care and increased intensive care unit availability are desirable.