MediCaring is an innovative program of comprehensive and coordinated health care which blends the best of palliative care with the best of medical and disease management, tailored to the needs of the seriously chronically ill. The program focuses on heart and lung disease (i.e., Congestive Heart Failure and Chronic Obstructive Pulmonary Disease) patients nearing the end of life (the last 2-3 years). The MediCaring eligible population will be identified using severity of illness threshold measures specific to major chronic diseases rather than a prognosis definition (as is now the case with hospice). MediCaring builds on the premise that good care of the dying calls for interdisciplinary approaches to care (e.g., primary care physician, advanced practice nurse, social worker, clergy, etc.), continuity and coordination of care, integration of diverse services delivered in a variety of settings, excellent symptom management, maintenance of function, patient/family counseling and support, attention to spiritual and personal growth issues, and a change in the orientation and culture of providers to provide care shaped by the patient’s values and personal situation.

MediCaring is not a duplication of the hospice or PACE programs. Comprehensive institutional and community-based care, managed by interdisciplinary teams of health care professionals, marshalling existing resources within the community for social services, and tailoring care to the individual’s needs are hall-marks of all three programs. MediCaring, however, would serve populations not now being served, would extend this care to hospital settings, and will test a financing mechanism (and other incentives) and range of prices that would allow a systematic program to be instituted in Medicare. Services would be financed by a special capitation rate, risk adjuster, and/or special payments to special providers by Medicare. The goals of MediCaring are to improve care at the end of life by developing appropriate, optimal, cost-effective services that blends the best of palliative care with the best of medical and disease management and to propose sustainable service, financing, and regulatory reform in Medicare through a national demonstration project involving healthcare provider organizations nationwide (including hospices, large group practices, Medicare managed care, and the Veterans’ Affairs Health Care System).

A series of projects are being implemented under the banner of the MediCaring, starting with a national quality improvement project to improve care for patients seriously ill with advanced stages of chronic obstructive pulmonary disease and congestive heart failure. Up to 60 health care organizations (20 DVA Medical Centers and 40 non-DVA health care provider organizations) will be selected to work intensively together to implement and test excellent comprehensive care for persons with advanced stages of CHF and COPD. Among the goals of this special Advanced CHF/COPD Collaborative are to learn: (1) to target patients for special services, (2) to tailor services to the needs of these populations, (3) to set up information systems and records to support excellent care and 4) to understand which innovations are broadly applicable and efficient in moving care systems toward the vision of optimal care. This Collaborative, sponsored by the Center to Improve Care of the Dying, the Department of Veterans Affairs, and the Institute for Healthcare Improvement, will run for 9 months, starting in January, 1999. By September, 1999, most sites participating in the Collaborative will have some program and patient data collected by chart review and interviews conducted by centrally trained and managed teams of data collectors (not on-site personnel) through visits to each Collaborative site. We are in the process of securing foundation funding for these data collection activities.

The IHI Collaborative on Improving Care for Patients with Advanced CHF/COPD will help organizations make changes that lead to improvements in the following areas:

1. Care Coordination for Persons with Advanced CHF/COPD
2. Continuity of Care Across Delivery Sites
3. Patient/Family Education in Self-Care and Support
4. Medical Services for Acutely Ill and "Stable" CHF/COPD Patients
5. Pain/Symptom Relief
6. Advanced Care Planning

The Collaborative on Improving Care for Patients with Advanced CHF/COPD is an important first step in the MediCaring Project’s long-term research and public policy reform goals. Two subsequent projects, slated to begin in January, 2000, constitute the formal research and program evaluation components of the MediCaring projects and include the VA Randomized Trial of the MediCaring Model. This project will rigorously evaluate programs and control sites, using 20 new VA Medical Centers (10 randomized to "MediCaring" and 10 randomized to "Usual Care"). None of the 20 can be sites that participated in the Advanced CHF/COPD Collaborative. The best practices identified in the CHF/COPD Collaborative will be implemented at each of the VA MediCaring sites. Rigorous, systematic data collection will be conducted on site and through centralized data collection to test the new model of care for patients within the VA system.

At the same time, 10 – 20 non-VA health provider organizations will be starting a program evaluation research project in which each organization (some who had participated in the Advanced COPD/CHF Collaborative and some new organizations) will implement the best practices identified in the Collaborative and elsewhere. Data collection will be conducted on-site through centralized data collection efforts managed by CICD. These sites will obtain a suitable comparison group who can be followed in usual care.

Funding for the MediCaring Program Evaluation projects implementation, program management, and clinical services will come from patient care reimbursements from the Health Care Financing Administration (HCFA) waivers, contributions from the collaborating healthcare organizations, and funding from private foundations. We will seek waivers from HCFA, on behalf of most clinical sites, to alter certain requirements affecting the regulation and financing of service providers and organizations under Medicare. The MediCaring Program Evaluation Project is essential because we now have so few models of excellent end-of-life care and so little data to benchmark good care. Only a few multi-organizational efforts are currently underway to identify best practices and none address appropriate funding mechanisms and incentives to induce improvement. Sustainable change in the Medicare system requires rigorous evidence-based research to inform policy debates and regulatory reform. This is the time for innovation, learning, and widespread quality improvement.

Advances in health care and improvements in public health have enabled Americans to live longer and to survive life-threatening events such as premature birth, heart disease, and traumatic injury. Americans can typically now expect to live well into their 8^th decade. Median life expectancy has reached 79 years of age for women and 73 years of age for men. One largely unanticipated result of the advent of larger and larger numbers of persons living into old age has been the emergence of long-term, chronic diseases as the major pathway to death. Over 70% of all deaths in the United States occur after people qualify for Medicare at age 65 (average age at death is now approximately 77 years of age).^, In an examination of 1993 Medicare claims data, Hogan found that over 80% of all decedents had one of five kinds of illnesses in the year before death: congestive heart failure, chronic obstructive pulmonary disease, cancer, stroke, or dementia. These are illnesses that occasion a prolonged course of increasing disability and illness prior to death. Thus, most of us will die slowly, of relentless but somewhat unpredictable chronic illnesses and disease.

Dying today all too often entails unnecessary pain and suffering, invasive and burdensome medical interventions, and financial ruin for many patients and families. The dying have different care needs than those who are sick but stable or likely to improve. Good care of the dying calls for interdisciplinary care teams, continuity and coordination of care, integration of diverse services delivered across a variety of settings, and changes in the orientation and culture of providers and public alike.

Clinical experience indicates that service needs change over a lifetime (See Figure 1).

prevention rescue, cure symptom relief

lifestyle issues rehabilitation spiritual issues

reproduction explanation, prediction, planning family issues

growth, maturation life-prolongation rehabilitation

explanation, prediction,

(almost all primary care) Þ (diverse medical and surgical (primary care, especially

specialty services) Þ nursing, counseling, etc.)

Needs tend to be similar and routine during growth and development and change and diversify as a person encounters serious acute illness. However, needs tend to converge again as chronic illness becomes more severe and the person nears dying. While it is true that people have somewhat different needs if dying of CHF when very old, rather than cirrhosis at sixty years of age, it is also true that most dying patients have a similar range of shared priorities and service needs. Data from the National Hospice Study suggests that the needs of terminally ill patients are different from those who can recover from their illness.

Medicare beneficiaries living with advanced and progressive chronic illness now face a disastrously fragmented and disorganized health care system. The U.S. health care system has historically focused on the treatment of acute diseases, accidents, and rescue care, with cure as the goal. This type of care system is sadly mismatched with the needs of persons who will steadily deteriorate with a chronic illness to death. Health care services are fragmented, both by payer and by provider, leading to inefficiencies in service delivery and cost-increasing incentives to over-treat and over-serve patients. For those facing the end of life, current fee-for-service reimbursement (including hospital DRG reimbursement) favors the continued utilization of high technology procedures over relatively simple palliative measures (e.g., Foley catheters or gastrostomy feeding tubes versus labor -intensive personal care services). The integration of delivery and financing of healthcare in managed care settings creates incentives for prevention and to the reduction of service use when possible. These arrangements can allow the flexibility of funding, personnel, physical plant, location, and ability to track patients necessary for more systematic planning and delivery of services. Nevertheless, the principles of "gatekeeping," the potential for the reduction of beneficial, as well as unnecessary tests and procedures, and the pressures for cost containment (i.e., short lengths of stay, etc.) raise concerns about the quality of care that enrollees may receive.

No matter what the financing scheme, most of health care is organized by site of care (hospital, nursing home, home, etc.), by disease (renal failure, heart attack, etc.), or by intervention (cardio-thoracic surgery, diagnostic radiology, etc.). However, this is not how dying patients experience illness. They travel among provider sites, having intermittent interventions, often with multiple medical specialists attending to diagnoses that cannot be cured. Records created in one setting are rarely available in another (e.g., ambulatory care clinic to hospital, or hospital to nursing home). Pain management is routinely ignored and providers are rarely continuous across time or sites. End-of-life care often falls to physician specialists focused on rescue (e.g., oncologists, cardiologists) when multi-disciplinary teams attentive to nursing and social issues could provide more effective and more reliable supportive care. All the evidence suggests that patients and their families have little ability to reshape care to better meet their needs compared with the influence of provider supply and established care patterns.

For persons with less serious or more curable illnesses, these shortcomings of patient care might be considered to be minor annoyances (e.g., the inconvenient location of care services) or merely amenities (e.g., spiritual counseling, dignity of the person, respect for patient’s wishes). In the context of a fatal illness, however, these issues acquire paramount importance. However, in the current system of care, we do not hold anyone accountable for these shortcomings nor are they measured or compared. Virtually all current efforts to improve care for those with chronic illness focus on the early diagnosis and management of the disease (i.e., disease management programs) and tend to ignore the fact that care needs are shaped by the eventual outcome of the illness.

Dying from chronic illnesses is very costly. Most beneficiaries in any one year have very small expenses, and a few have very large ones. In fact, most of Medicare dollars in any one year are spent on less than one-fifth of the beneficiaries. About 27% of Medicare expenditures are used for the 5% to 6% of beneficiaries who die each year and about 40% of the those funds go for care given in the last month of life .^,,,,, Although Medicare costs overall increased nearly fourfold from 1976 to 1988, Lubitz and Riley (1993) showed that dying patients utilized the same relative share of Medicare expenses and patterns of expenses. Using data from 1979, Riley, Lubitz, and colleagues (1987) found substantial variation among diseases in costs at the end of life. In a later study, Riley and Lubitz (1993) examined the pattern of expenditures over time for the same causes of death. These studies provide evidence that dying from certain chronic illnesses is disproportionately expensive over a long period.

Much of the care now provided at the end-of-life may be inappropriate. SUPPORT, the Study to Understand Prognosis and Preferences for Outcomes and Risks of Treatments, collected data on 9,105 very sick hospitalized patients, identified problems in their care, and tried and failed to correct these problems.. . Data collected in the SUPPORT study, showed that half of those conscious near death were reported by family members to be in moderate to severe pain most of the time. The median death in this study followed more than a week in an ICU. Patients and their physicians did not routinely make plans for end-of-life care or even converse about the overall course of the disease or how to manage predictable problems along the way. An order to forgo resuscitation was written, on average, only two days prior to death.

Our cultural conception of dying, and the one we know most about, is built upon a cancer model that does not fit the course of most chronic illnesses. For example, most patients with solid tissue cancers (e.g., lung, gastrointestinal, renal) have a long period of functional stability despite progressive illness and a relatively predictable, brief final course of decline, or "terminal phase," usually lasting less than 6 weeks. The referral to hospice, when it occurs, happens after the start of a "failing" phase that is clearly "marked." This failing phase, usually one month ahead of death, is found in all countries with hospice services. Thus, in the cancer paradigm, the disease prompts the "transition from cure to comfort care," at a time when the patient is clearly "failing."

In contrast, chronic diseases like CHF produce trajectories that usually have no identifiable "failing" phase and there are no clear physiological events which lead doctors to label such a patient as "dying," even when he or she is extremely disabled (See Figure 2).

Chronic illness has a gradual onset of symptoms, unfolds over a long period of time, has multiple and shifting causes and responses to treatments, and produces trajectories of illness that resist prediction. Patients often have multiple diagnoses, prognosis is obscure, medical interventions are frequently indecisive, therapies often have adverse consequences, and the costs of care are high. When CHF patients are not experiencing an exacerbation of their disease, they seem to be doing fine and feel well. They have adapted to activity and diet restrictions and do not perceive their limitations as active illness. Death from CHF occurs mostly from heart attacks, strokes, arrhythmias, or infections, which are quite unpredictable. Thus, death will almost always seem to be "sudden." Following social conventions, doctors and patients alike avoid describing these patients as "dying" until they are unambiguously close to death. Consequently, most people with chronic illnesses never have a defined time in which to ‘wrap up’ their lives. There is no planning for death and no consideration of hospice care.

The inherent unpredictability of this more common course of the end of life is illuminated by a "prognoses on the days before death" analysis from the SUPPORT study (See Figure 3). This analysis used data from the SUPPORT study to generate multivariate estimates of survival prognosis. The relationship of median estimates to time of death were examined for difference diseases and for ICU settings of care. All patients, and especially CHF patients, had a substantial chance to live much longer, right up to the day before death. Overall, SUPPORT patients were found to have a median 51% chance of survival for two months just one week ahead of death. Median prognoses varied substantially among diseases: lung cancer patients had

a median prognosis of 17% to live two months on the day before death and 50% chance just one week before death. Those with CHF had a median prognosis of over 60% to live two months and over 40% to live for six months on the day before death. It is unlikely that physicians, patients, or their loved ones would recognize that death is near with prognoses that so strongly suggest hope. The fact that a condition will worsen and cause death may be more important than the specific etiology. This makes patients with advance chronic illness an appropriate population for tailored services and special policies because they and their families needs a different kind of care system, often for many months or years before death.

The only program for specialized end-of-life care is hospice. Hospice has shown that care can effectively and efficiently focus on just the final phase of life. Hospice utilizes less costly sites of care and providers from multiple disciplines working in close teams; attends to specific personal, spiritual, and clinical needs; and delivers appropriate medical, nursing, and social supports. Hospice acts both as an insurer and as a provider in that it delivers all most all needed care for a global payment (mostly a set rate per day at home, with other rates for in-patient or continuous nursing attendance). Hospice has set the standard for good end-of-life care through the use of interdisciplinary teams that coordinate care and manage costs, a focus on the patient and family as the unit of care, and reliable and effective service delivery (e.g., 24 hour on-call availability of providers and state of the art pain and symptom management). The benefit is quite flexible compared to traditional fee-for-service benefits. The average per diem of $96 per day in routine home care in 1996, accounts for nearly 90% of all days of care. The program has enjoyed wide approval.^,,,

By electing hospice (either through Medicare or private insurance), patients agree to forgo "life prolonging" interventions and, instead, receive comprehensive medical and support services not otherwise available under Medicare or their insurance. Approximately 80% of patients receiving hospice care in the United States do so under the Medicare hospice benefit. A study examining the effects of hospice on Medicare Part A expenditures during the first three years of the program compared treatment costs between hospice beneficiaries and non-benefit patients with diagnosis of malignant cancer during their last seven months of life. Findings indicated that Medicare saved $1.26 for every dollar spent on Part A expenditures. A national evaluation of hospice found that hospice users, compared to weakly matched non-users, were less costly. For patients in home-based hospice, costs were $2221 lower than for "usual care patients." Hospital-based hospice patients were less costly only in their last month of life, yet the final savings in the last year of life was $484. A follow-up study found that cancer patients who used hospice cost Medicare, on average, $2,737 less than unmatched non-hospice users.

Despite its advantages for patients, Medicare’s various restrictions shape and define hospice. The hospice benefit is limited to people who have a "terminal illness with a life expectancy of six months or less." The relatively predictable, brief final course of cancer is well suited to the prognostic limit and hospice model of care. However, individuals dying with diseases other than cancer generally do not have access to hospice care, mostly because their illnesses do not have clinically evident phases of overt decline at the end-of-life (See Figure 3). In addition, the requirement 80% of care days be at home often makes hospice care unavailable for those without family or others who can assist them with medications, hygiene, nutrition, and other services. Thus, hospice ends up serving a very small portion of the dying population. In 1994, hospice provided services to 340,000 dying patients (about 15% of 2,294,000 deaths).^,

Moreover, hospice only serves its patients for a short period of time. Large hospice providers report that they now have median lengths of stay of less than two weeks. Christakis and Escarce (1996) found the median survival time after enrollment for Medicare patients in 1990 was only 36 days. Almost 16% of patients died within 7 days and over 28% died within 14 days of enrollment. Only 15% of Medicare patients enrolled in hospice were alive for six months or more. The authors concluded that the majority of hospice patients enter too late to benefit from hospice and indicated that the optimal length of stay for hospice patients is three months.

Increased utilization of hospice has been retarded by recent audits conducted by DHHS' Office of the Inspector General (OIG) under "Operation Restore Trust," which has alleged improprieties in hospices which enrolled persons who live beyond six months. In November 1997, the OIG released a report based on inspection of the files of 2,109 Medicare beneficiaries in 12 hospices in four states. Each patient had received hospice care for more than 210 days. The OIG review indicated that 65% had not had life expectancies of six months or less when initially enrolled in hospice (and would thus be fraudulently generating hospice payments).

While this complicated situation cannot be fully explained here, two important implications emerge. First, neither the OIG nor anyone else has given an explicit definition for the statutory requirement of a "prognosis of less than six months." Is the "just barely qualified person" the person whose median expected life-span is five months and 29 days? Or is it a person for whom it would be a surprise to survive six months? There just is no clear statute or regulation to enforce. The OIG’s inspections and demands for repayment of reimbursements are alarming to hospice management and are helping to restrict referral to and acceptance for hospice only to those patients with very clear, and very short, prognoses.

The second implication of the OIG’s campaign is that the current Medicare hospice benefit does not support a longer length of stay for those dying of cancer and cannot be made to match the course of those dying of CHF and other more unpredictable diseases. In a recent analysis, the authors applied a number of current expert measures of disease severity of CHF to persons enrolled in the SUPPORT study. Of the 1300 patients with severe CHF who survived the first hospitalization, three-quarters lived more than six months. Of the approximately 250 patients who probably met criteria for hospice enrollment for severe heart failure, three-quarters were still alive at six. Thus, the current enrollment criteria can serve to greatly limit hospice access but will do so inequitably, since they are unable to separate the "dying soon" from others with similar needs for services.

Furthermore, according to the Institute of Medicine (IOM), "at the same time that they encourage efficiency, the aggregate caps on payments for hospital care and total payments and the per diem rates [for hospice] could discourage appropriate care for some patients.³² Its June 4, 1997 report notes that

Another worthy model of care is the Program of All-inclusive Care for the Elderly, or PACE. PACE is a community-based delivery and financing program that integrates acute and long-term care services which go beyond the usual Medicare and Medicaid benefits. PACE serves nursing home certified frail elderly (55+) in hospitals, physician offices, adult day clinic and home settings from enrollment to death. Comprehensive acute and long-term care services are provided by a single organization through an interdisciplinary team of providers. PACE is financed through a monthly capitation payment from Medicare and Medicaid. A few patients ineligible for Medicaid pay privately for the Medicaid component (about 8% of enrollees). The range of Medicare monthly capitation was $689 to $1,562 across PACE sites in 1994. The Medicaid reimbursement rates ranged from $1,486 to $4,465, with an average of $2,361 (a range of 74% to 95% of each state’s nursing home reimbursement rate.

Despite its success in integrating care and controlling the cost of care for frail older people, each PACE program takes 3 to 5 years, and about $1.5 million, for initial development. The program does not appeal to middle-income elderly not eligible for Medicaid because the monthly co-payment averages $2,361 per month. PACE sites have had difficulty in enrolling patients (often because eligible persons are reluctant to change physicians) and have had difficulty in recruiting physician and other health professionals. Additionally, the target group for PACE is small: nursing home certifiable persons. The typical PACE enrollee is 80 years old, female, with an average of 3 limitations in activities of daily living and an average of eight medical conditions. For example, 55% of enrollees suffer from hypertension, 54% with arthritis, 42% have dementia, 34% have cerebrovascular disease and 32% have coronary artery disease. PACE appears to have set the standard for excellent, integrated services for the very frail and poor. However, even more than hospice, its scope of access seems likely to remain quite small for the foreseeable future, despite having been made a permanent part of Medicare in 1998.

How well one can live through disease and treatment is not just a tangential question; for the dying, it is all that there is to life. Reliable and effective care for the dying cannot be targeted just at the "actively dying," as in the hospice paradigm, nor just on the extremely frail, long-term care population. Rather, programs must include all people who are affected by serious chronic illness which will cause death, but over a longer, less predictable, period of time. Indeed, the problems of those nearing the end of life with an array of chronic illnesses cannot be addressed by the Medicare hospice benefit as it is now structured nor by the mere expansion of the PACE program. Even managed care, which has great potential to serve this population, has incentives to avoid high cost populations. We need to build a sustainable, accountable system of "usual" care that appropriately serves most seriously ill patients and their families, irrespective of health care delivery setting (e.g., home, nursing home, hospital). We need to learn how to build a sustainable, accountable system of care that appropriately serves the chronically ill, dying person and his or her family.

Building upon the knowledge and successes of both hospice and PACE, MediCaring is an innovative program of comprehensive and coordinated supportive, preventive, palliative, and life-prolonging treatment and services tailored to the needs of chronically ill (e.g., Congestive Heart Failure and Chronic Obstructive Pulmonary Disease) patients nearing the end of life. MediCaring builds on the premise that good care of the dying calls for interdisciplinary teams (e.g., primary care physician, advanced practice nurse, social worker, clergy, etc.), continuity and coordination of care, integration of diverse services delivered in a variety of settings, excellent symptom management, maintenance of function, patient/family counseling and support, attention to spiritual and personal growth issues, and a change in the orientation and culture of providers to provide care shaped by patient preferences.

MediCaring is not a duplication of the hospice or PACE programs. While comprehensive institutional and community-based care, managed by interdisciplinary teams of health care professionals, marshalling existing resources within the community for social services, and care tailored to the individual’s needs are hall-marks of all three programs, MediCaring would serve populations not now being served, would extend this care to hospital settings, and would test a financing mechanism (incentives) and range of prices that would allow a systematic program to be instituted in Medicare. For example, PACE membership turns on nursing home certification; that is, only those people with complex medical needs, who require intensive, ongoing care and with substantial functional disability are eligible. This is a very different population than that envisioned to be served by MediCaring, which would focus on those individuals suffering from advanced CHF or COPD. Moreover, MediCaring is primarily a program financed by existing Medicare funds and cannot go forward without a restructuring of the payment structure. MediCaring is also very different from hospice in that MediCaring would use disease severity as the main enrollment criteria and thus, would be able to enroll CHF, COPD, and other diseases, which have inherently unpredictable survival times.

MediCaring Services. Except for hospice services for cancer, there is little data as to how to characterize optimal care pathways. End-of-life care has mostly been a by-product of the dominant health care system, arising with no particular attention to disease at death and often with quite variable services. MediCaring builds on the premise that good care of the dying calls for interdisciplinary teams, continuity and coordination of care, integration of diverse services delivered in a variety of settings, excellent symptom management, maintenance of function, patient/family counseling and support, and a change in the orientation and culture of providers to provide care shaped by patient preferences.

MediCaring would prioritize services quite differently than conventional care: each patient will have a constant primary care provider (advanced practice nurse and/or physician), regardless of setting (e.g., hospital, nursing home, hospice, home). Services would include, but not be limited to: comprehensive care management coordination, home and personal care, appropriate emergency medical care, access to 24 hour "urgent" care advice nurse with authority to manage care over the telephone, medical equipment and supplies, personal care, rehabilitation, environmental adaptations, and inpatient respite care. In addition, creative combinations of "aggressive" and "supportive care" services would be available (either at home or in an institutional setting) to replace traditional "rescue" care that may no longer serve the patient or reflect responsible stewardship of resources within the care system. Unlike usual hospice practice, however, no treatment (e.g., intensive care, cardiopulmonary resuscitation) will be barred, and thus patients will not have to explicitly give up access to life-sustaining measures. While services could become as extensive as hospice, if needed, most MediCaring patients will be less dependent, less symptomatic, and less rapidly changing, so services will usually be less intensive. MediCaring would make it easy to get supportive care, which is now hard to get, and would make it harder to get ventilators and/or surgery, which now are easy.

Comprehensive care management coordination will also incorporate earlier and more open discussion of advance care planning and DNR orders for chronically ill patients in the last phase of life, leading to more appropriate treatment choices and decision-making. Decision-making and management of the patient would rest with the patient and families and where needed, the MediCaring program would coordinate and arrange supportive housing, paid by private funds or Medicaid. Effectively, MediCaring creates a discernibly different care program for the seriously chronically ill at the end of life much in the same way that we have created systematic obstetrical care as a distinct care program.

MediCaring Eligibility. Chronically ill patients in the last phase of life might best be considered a "special" population," distinguished by clinical severity (e.g., functional status or cardiac performance status) and their distinct care needs. The fact that a condition will worsen and cause death may be more important than the specific etiology. While some of these patients will have unpredictable illnesses, most will have serious, established, long-term illnesses such as heart failure, dementia, emphysema, and stroke. These patients have traditionally been selected against in managed care marketing and retention and their common needs are not now priorities in routine medical care.

In contrast to hospice, MediCaring eligibility criteria would be based on severity and utilization measures specific to major disease categories, with administratively practical and culturally appropriate thresholds of disease. For example, people would qualify when an illness becomes severe enough to shape much of the person’s life and is expected to be fatal. Defining the thresholds requires more practical experience, but examples might be people who have:

1. 2 hospitalizations within the last year for CHF/COPD;
2. COPD with continuous oxygen (p 02 < 55 at rest) or CHF with ejection fraction of <30%, and
3. NYHA class III or IV function on a usual day for CHF

These guidelines will enable the MediCaring population to be much broader than that covered under the traditional hospice program. In addition, the program will not bar access to any particular treatment and therefore should not take on the "toxicity" of the hospice label, which many people resist, in part, because it is perceived to be such a harsh turning away from treatment and such a strong marker for imminent death. The major disabling conditions which would not make a patient eligible for MediCaring are musculoskeletal (e.g., osteoarthritis) and sensory conditions (e.g., macular degeneration). Programs that examine a policy of reallocating resources from traditional hospital-based "rescue" care to improved home and community supportive care that more appropriately meets the needs of those facing "life-defining, eventually fatal illnesses" would be of great value and would significantly improve quality.

MediCaring Financing. MediCaring aims to provide improved home and community-based palliative and supportive care without increasing average costs. The potential cost reductions from MediCaring will arise mainly from the diminishing use of acute-care interventions that can be prevented, either with aggressive preemptive community-based care or by honoring the decisions regarding treatment choices of patients and families. Patients with advanced chronic illness are an appropriate population for tailored services and special policies for two reasons. On the one hand, the chronically ill population has much less variance than the overall Medicare population and can therefore be identified and priced at a special rate. On the other hand, the non-chronically ill population has much less variation. High-cost users in any one year are much more likely to be unpredictable (and, therefore, providers cannot "game" the reimbursement by selection bias—they will have to compete on value and quality). These chronic conditions do not generally pose risks of very high costs and, thus, could be folded into a general population risk pool. As opposed to "conventional" disease management, all MediCaring patients would unambiguously have these established diagnoses (which would ensure a low risk of "gaming" the system) and the threshold of severity could be set so as to accommodate administrative considerations (e.g., the price and services can be set to match the populations which prove to be enrolled over time). Schematically, in any one year, the population expenditures in Medicare look like this (See Figure 4). If MediCaring patients were "taken out" of the general insurance pool, two very interesting things happen. The MediCaring population can have a fair rate of capitation or other payments because they have largely

predictably high expenses, while the non-MediCaring population would become a more tractable insurance pool with unpredictable risks of high cost. For example, variance in costs is likely to be lower among all persons dying with chronic organ system failure than among those with any stage of one disease, such as CHF. About 28% of Medicare funds are now spent on care in the last year of life, which is geared toward expensive, high technology interventions and "rescue" care. Of the funds Medicare spends on patients in their last year, about 40% are spent on care given in the last 30 days of life and 50% for care in the last 60 days.

Most financing schemes could support a MediCaring program; for example, hospice-like payments to a team (with the MD fee-for-service under Medicare Part B); a risk-bearing capitation rate (like Medicare managed care or PACE); payments to special providers (like carve-out contracts); or salaried budget (such as the Veterans’ Affairs). Straightforward fee-for-service payments to physicians and hospitals for their services virtually precludes sustained or widespread excellence in end-of-life care (i.e., routinely establishing multidisciplinary teams, ensuring continuity of care, making promises between patients and providers, and sustaining a care focus upon symptoms, function, and meaningfulness).

The hospice model of financing (team capitation and physician fee-for-service) could be established for a MediCaring program. It, along with the risk-bearing capitation structure of Medicare managed care or PACE, or the salaried budget of the Department of Veterans Affairs offer opportunities for successful MediCaring payment and service delivery. Each of these reimbursement modes could enable organizations to plan and deliver comprehensive services to a defined patient populations, to be accountable for quality and value, and to use centralized resources and flexibility in choice and delivery of services within a capitated or global budget. Within these relationships with Medicare, various incentives to providers can be implemented in order to hold down costs (within the demonstration, periodic reports on how other sites are doing may well be a strong motivation).

Hospice is financed mainly by a daily capitation. In addition, direct physician payment through Medicare Part B, as in traditional fee-for-service medicine, makes hospice reimbursement a very interesting amalgamated payment mechanism. The payment to a team of providers at risk for most patient care, while maintaining separate utilization of physician services, promotes multidisciplinary team management, control of care, and creates the possibility of an independent patient/family advocate as a "whistle-blower" when needed. It also may make passage of a MediCaring statute more politically possible in the long run since physicians would have less reason to object to such a program because they are still "included" in the patient’s care and patients would be reassured by being able to remain with a long-standing physician.

Several authors have discussed the promise that managed care holds for improving care for the chronically ill and elderly.^,,,,,,, The characteristics of managed care that could enhance care for the chronically ill and elderly include: their ability to provide more systematic, better planned, population-based care, their greater flexibility in service delivery and setting, and their centralized resources and comprehensive data systems that allow the organization to manage resources without "micro-managing" care. The major limitation on managed care organizations as the provider of a MediCaring program is the public’s perception of under-service. However, the capitated reimbursement mechanism of Medicare managed care offers important opportunities for improvement in care for those nearing the end of life.

In addition, the Balanced Budget Amendments of 1997 mandated innovation and variety in HMO contracting arrangements under Medicare. The new "Part C" of Medicare, called the Medicare+Choice program, allows a wider range of providers to contract with HCFA. While these types of managed care providers are, as yet, untried, this new mechanism opens the possibility that MediCaring teams could contract directly with HCFA or through private physician groups as yet another financing model.

Salaried systems, such as the DVA, offer the advantage of fewer reasons to find the care provider in ethical conflicts of interest with very sick patients. While fee-for-service physicians might risk over-use of interventions and managed care physicians might risk denying services, salaried physicians have much less incentive in either direction.

The long-term goal of MediCaring would be to offset the costs of additional services by the reduction in unnecessary acute care services and by the effectiveness of coordination and continuity. Since the MediCaring program will serve only "sicker" patients, payment levels to service providers must end up being appropriately adjusted. The proposed demonstration program would include the development of risk-adjusted payments to assure that plans receive sufficient revenues to provide the comprehensive package of services to the average terminally ill person. This is essential in order to encourage improved quality and to attract increased numbers of high-cost beneficiaries. Participating plans might develop partial financial risk sharing requests for the beginning years of the demonstration program. In addition, plans might be allowed to negotiate beneficiary premiums for certain services such as custodial care. The demonstration program would provide small investments of start-up funds and funds for evaluation, but no additional funds for treatment. The MediCaring National Demonstration Project provider sites will represent many, if not all, of the models of service provider organization, service delivery, and reimbursement discussed above.

What is needed is a care system that will serve the vast majority of dying persons; one that will pay for appropriate services that can be flexibly delivered, and one with suitable salaried or capitated pricing. There are intriguing and attractive attributes in a conceptual model of health care which includes a recognition of special services and financing for the last phase of life. MediCaring would establish an appropriate pathway for most dying individuals; it would create a risk-bearing entity (e.g., the multidisciplinary team) with responsibility and accountability for quality and as well as value, and it would provide a mechanism to eliminate the intense pressures on the current system to "stretch" hospice eligibility or to overuse home health care.

MediCaring offers unique possibilities for efficiencies in service delivery and efficacy in service composition to its clients. With its multidisciplinary approach, MediCaring can more effectively allocate community-based services to clients based on "need," allowing for a better "fit" between client and family needs and services provided. Senator Rockefeller, along with others, has introduced a bill to require the Health Care Financing Administration (HCFA) to undertake an evaluation of demonstration projects for innovative and new approaches to end-of-life care for Medicare beneficiaries, and for AHCPR to collaborate with HCFA in developing quality end-of-life measures, called the "Compassionate Care Act of 1997."

A MediCaring National Demonstration Project offers health care providers an opportunity to develop special expertise in palliative and supportive care services and to develop innovative programs for an identifiable population. For example, under a MediCaring structure, allied health professionals, specialists, and supportive services can all be brought together under one management structure to create quality standards and accountability systems. Thus, the organizational resources needed (e.g., provider feed-back processes, data reporting systems, integrated care delivery and financing, etc.) to ensure the systematic pre-planning of services, effective management of care, continuity across service settings, and measurement of outcomes for quality and accountability could easily be established.

Moreover, a MediCaring National Demonstration Project provides an opportunity for health care providers to learn how to compete on the basis of quality. Because they can be held accountable for measurement and improvement, methods for comparing providers could be implemented. Consumers would benefit by being able to intelligently select a provider based on clear, objective indicators of quality (e.g., percent of patients in moderate to severe pain in the last weeks of life, psychological support provided to family after the death, etc.). There is now no equivalent opportunity for accountability to be "built into" conventional medical care.

Finally, a MediCaring National Demonstration Project has the intriguing opportunity of testing the important question of fair risk adjustment in Medicare managed care. It is largely the MediCaring patients who, on the first of any year, can readily be predicted to have high costs that year. It is all too easy now to bias recruitment and retention so as to minimize an organization’s exposure to these risks. Risk-bearing organizations could not readily succeed financially by exploiting advantageous selection of a population. Instead, care provider organizations would have to compete on quality and value. The participating provider organizations would be responsible for measuring and reporting specific outcomes, including physical and emotional symptoms, advance care planning, aggressive care near death, and patient and family satisfaction. This is essential in setting accountability for quality in the program.

Controlling the costs of medical care at the end-of-life will require policymakers, politicians, physicians, and elderly patients themselves to evaluate the costs and benefits of high technology interventions. Demonstrations examining a policy of reallocating resources from traditional hospital-based "rescue" care to improved home and community supportive care that more appropriately meets the needs of those facing "life-defining, eventually fatal illnesses" will be of great value. Therefore, the Health Care Financing Administration should conduct demonstration projects to learn how to implement a good care system for dying Medicare patients. The MediCaring National Demonstration Project and Evaluation is planned as a 3-year demonstration program. The evaluation component will specifically assess the cost-effectiveness of the program, the clinical thresholds used to define "terminal" illnesses, the desirability of the services to beneficiaries, and the extent to which quality of care has been improved including changes in advance care planning, aggressive care near death, and patient and family satisfaction.

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