People living with serious illness have a range of interconnected medical and social services needs, and the way their care is paid for has a large impact on the care they receive. Medicare is the predominant payer, but Medicaid and private payers also play significant roles in financing care for serious illness. To address the complex needs of people with serious illness, public and private health care payers are testing innovative financing strategies and alternative payment models. This topic was the focus of a recent public workshop hosted by the National Academies of Sciences, Engineering and Medicine’s Roundtable on Quality of Care for People with Serious Illness.

The foundation’s Patient Care Program is supporting efforts to ensure high-need patients – those with serious illnesses and limited ability to perform everyday tasks such as dressing, bathing or walking – have access to care that meets their needs and in the location they want it most: their home. Part of our efforts include supporting the National Academy of Medicine’s roundtable.

Through its public workshops, the roundtable aims for participants to learn from other stakeholders interested in a shared vision of high-quality, community-based care for people with serious illness. The roundtable’s first workshop, “Integrating the Patient and Caregiver Voice into Serious Illness Care,” examined opportunities to meaningfully involve people living with serious illness, and those who care for them, in creating and delivering high-quality care. The second workshop, “Models and Strategies to Integrate Palliative Care Principles into Care for People with Serious Illness,” discussed innovative, community-based models of care for people of all ages facing serious illness.

The third workshop in the series focused on how serious illness care is paid for within the U.S. health care system. A summary report was published in May, 2018. The workshop – "Financing and Payment Strategies to Support High-Quality Care for People with Serious Illness" – explored the evolving financing and payment landscape for serious illness care within public- and private-sector programs. Discussions centered around innovative payment approaches that signal a transition from the traditional fee-for-service system that pays providers based on the quantity of services to a system based on the value of care provided and a heightened focus on improved quality of care at lower cost.

What serious illness care looks like

The workshop opened with a powerful personal story from Ralph, a 66-year-old New Yorker and two-time cancer survivor who was the sole caregiver of his recently deceased wife, Patricia. She had multiple serious illnesses including chronic obstructive pulmonary disease, asthma, emphysema and cancer. Ralph said that caring for his wife was difficult. He prepared all meals and took care of the grocery shopping, banking, laundry, ironing and yard work – all responsibilities that his wife had managed during their 45 years of marriage but could no longer.

Their home of 25 years had three stories and climbing all those stairs was difficult due to their health conditions. Ralph himself has peripheral neuropathy, damage to peripheral nerves that often causes weakness, numbness and pain, usually in hands and feet. As Patricia’s illness progressed she became less able to perform everyday activities like bathing and dressing. “She would just sit there and cry,” Ralph said.

In addition to the emotional and physical toll this took, it also came at a financial cost. Ralph – who previously received private health insurance through his long-time employer, Merrill Lynch – said he has about half his retirement funds remaining and owes approximately $150,000 on a home equity loan he took out to pay for his and his wife’s medical expenses.

Paying for care that people need and where they want it

With Ralph and Patricia’s story front of mind, participants at the roundtable discussed how serious illness is paid for currently and what needs to change to help people like them.

Caring for people in their homes is increasingly difficult under the traditional payment structure, which focuses on hospitalizations and medications. David Stevenson, associate professor of health policy at Vanderbilt University School of Medicine, highlighted the gaps in the payment system that make it hard for patients to get the care they need and want, such as transportation or a home health aide. (Ralph said that one-way taxi fare from his house to the doctor’s office was more than $100; he also noted that hiring a private health aide would have been prohibitively expensive.) One of the payment challenges is Medicare’s hospice benefit – the primary mechanism for financing end-of-life care. The benefit covers a broad array of palliative and support services but is limited to individuals with a terminal diagnosis who are willing to forgo curative therapies, which is often at odds with patient wishes to continue treatment.

“If you are thinking about outpatient [not in a hospital] palliative care, meeting people where they are in the community, there is very limited coverage of that in the Medicare program."

- David Stevenson, associate professor of health policy at Vanderbilt University School of Medicine

Supporting this point, workshop speaker Senator Ron Wyden, a Democrat from Oregon, highlighted the Senate’s unanimous vote to transform Medicare with a focus on chronic illness, one of the three areas that drive much of Medicare spending, with long-term and end-of-life care being the other two. The legislation, known as the CHRONIC Care Act, was also passed by the House of Representatives and signed into law in February of this year.

Representative Phil Roe, a Republican from Tennessee and a self-proclaimed country doctor who practiced medicine for 31 years before being elected to Congress, agreed with Senator Wyden, adding that there is enough money in the health care system today to deliver quality care to every American if done properly. Roe also remarked that the one conversation America must have is on planning for the end of life. “Nobody wants to think about dying or having a chronic illness that incapacitates them in some way, but it is a conversation that we as a country need to have. This is not about left or right. This is about people. This is about doing the right thing for patients.”

As the foundation learns more about serious illness care, both through our work and the work of the National Academy of Medicine and others, we will continue to share insights. Future roundtable-led workshops include:

  • “Integrating Health Care and Social Services for People with Serious Illness” (July 19, 2018) and; 
  • “Pain and Symptom Management for People with Serious Illness in the Context of the Opioid Epidemic” (November 29, 2018).
Learn more about foundation-supported efforts in serious illness care

Help us spread the word.

If you know someone who is interested in this field or what we are doing at the foundation, pass it along.

Get Involved


National Academy of Medicine looks at integrating palliative care principles for serious illness


Related Stories