Do Financial Incentives Lead to More Medicare Interventions?
By Brenda L. Mooney
PALO ALTO, CA—VA patients dying of cancer are far less likely to receive excessive and unnecessary end-of-life interventions than those treated by Medicare.
In a report published in the journal Health Affairs, study authors warned that pushing for VA to become more of a purchaser than provider of medical services could mean lower quality care in situations such as this.1
“The findings are not just important for veterans and VA policy, but for anybody who needs medical care at the end of life, which is a majority of us,” said Risha Gidwani-Marszowski, DrPH, a health economist at the VA Health Economics Resource Center at the Palo Alto VAMC and a consulting assistant professor of medicine at Stanford University. “We as a society need to ensure we are setting up the organization of healthcare and its financial incentives to ensure that the services patients receive are the ones that are in their best interests at the end of life.”
Study authors also sounded a warning about changes in VA promoted by some congressional and VA leaders. “Fee-for-service Medicare provides an example of how purchased care differs from the VA’s directly provided care,” they noted. “Using established indicators of overly intensive end-of-life care, we compared the quality of care provided through the two systems to veterans dying of cancer in fiscal years 2010–14. The Medicare-reliant veterans were significantly more likely to receive high-intensity care, in the form of chemotherapy, hospital stays, admission to the intensive care unit, more days spent in the hospital and death in the hospital.”
On the other hand, researchers pointed out, the VA patients were more likely to have multiple emergency department visits.
Higher Intensity Care
Still, they emphasized, “Higher-intensity end-of-life care may be driven by financial incentives present in fee-for-service Medicare but not in the VA’s integrated system. To avoid putting VA-reliant veterans at risk of receiving lower-quality care, VA care-purchasing programs should develop coordination and quality monitoring programs to guard against overly intensive end-of-life care.”
The proposed Veterans Empowerment Act would change the VA so that it mostly funds medical services, along the lines of Medicare, rather than providing all the care itself. Ultimately, Gidwani-Marszowski cautioned, those types of changes could expose veterans to any effects a Medicare-like funding approach has on end-of-life care.
To determine whether the way care is organized affects the level of end-of-life services for veterans dying of cancer, researchers focused on 87,251 veterans older than 66 who had solid tumors and died between October 2009 and September 2014.
The definition of care quality was derived from guidelines issued by the American Society of Clinical Oncology and the National Quality Forum. The study team also took into account research on what services patients consider undesirable or burdensome at the end of life.
Specifically, the study looked at whether patients:
- received chemotherapy;
- had two or more emergency department visits;
- were admitted to the hospital and how many days they spent there; or
- died in the hospital and/or were admitted to intensive care.
For purposes of the study, the higher the numbers of veterans receiving these services, the lower the quality of care.
Veterans with cancer who used VA healthcare were then compared with veterans with cancer who received their care through Medicare. Background information in the study noted that more than 90% percent of older veterans are enrolled in Medicare, as well as the VA, so the population that is eligible for both programs. That makes the situation ideal for evaluating differences in care due to health care system factors, Gidwani-Marszowski pointed out.
Results indicated that Medicare patients were more likely to receive excessive intensive care at the end of life including chemotherapy, hospitalization, admission to the intensive care unit, longer stays in the hospital and death in the hospital, than those who received care through the VA.
Why did that occur? Gidwani-Marszowski suggested that the different financial incentives of the two systems explain the variation.
For example, she said, VA physicians are salaried, while Medicare-funded physicians bill according to the services provided (i.e., service). Additional services provided through Medicare generate funds for physicians and health care organizations.
Gidwani-Marszowski also offered an explanation as to why VA patients were more likely than Medicare patients to have two or more emergency department visits. She said extended hours or access to appointments are not available at all VA facilities, which might push veterans to the ED when they experience a medical problem. In addition, she said, Medicare patients with the same issue are more likely to already be in the hospital and receiving the care VA patients are seeking at an ED.
“The VA has long been a leader in providing patient-centered care at the end of life,” noted senior author Steven Asch, MD, professor of medicine at Stanford. Asch said. “Our study showed that veterans can expect appropriately lower-intensity care as they face late-stage cancer at VA facilities. If they choose instead to use their Medicare benefits outside the VA, they are at greater risk of getting chemotherapy, hospitalization and other services that will likely not help them in their last days.”
- Gidwani-Marszowski R, Needleman J, Mor V, Faricy-Anderson K, Boothroyd DB, Hsin G, Wagner TH, Lorenz KA, Patel MI, Joyce VR, Murrell SS, Ramchandran K, Asch Quality Of End-Of-Life Care Is Higher In The VA Compared To Care Paid For By Traditional Medicare. Health Aff (Millwood). 2018 Jan;37(1):95-103. doi: 10.1377/hlthaff.2017.0883. PubMed PMID: 29309227.