Villa Marie Claire, a residential hospice, opened in 2010 in Saddle River, N.J. Previously an orphanage and later an assisted-living facility, the property was turned over to Holy Name Medical Center after the Sisters of St. Joseph of Peace found they could no longer afford to keep it open. Holy Name's goal was to raise the state's ranking from last in the country when it came to dealing with end-of-life care. Hospital officials put together a business plan, and consultants were skeptical. But the officials pitched it to the sisters, who ultimately donated the property. Now, the 20-bed facility is widely lauded by patients' families but struggling to make ends meet. In September, Villa Marie garnered $5 million in funding from the state to re-imagine how end-of-life care is delivered. Michael Maron is CEO of Holy Name and Villa Marie Claire. He recently talked with Modern Healthcare Managing Editor Matthew Weinstock about some of the challenges he faces. The following is an edited transcript.
Modern Healthcare: Hospice is historically underpaid. So what was the conversation like within the leadership team, to say, "Let's go after something with no margin in it?"
Michael Maron: That is part of the culture of Holy Name. We've never shied away from what we thought were compelling services, even if the reimbursement mechanism was not existent at the time. We have a long history of getting out ahead of the curve, sometimes painfully so, to try to push awareness. I'll give you an example. Holy Name opened a dialysis center in the '60s at the behest of physicians in the community, because too many people were dying from end-stage kidney disease two years before there was any reimbursement formula, or even any hearings in Washington, to talk about the need to reimburse for dialysis.
MH: How are you measuring success with hospice care?
Maron: In all my 40 years in healthcare, this is by far the most successful clinical program I've ever seen launched. The impact it has on the people is greater than anything I've seen. The feedback is almost universally 101% outstanding, gratitude. So the positive impact on people's lives is just off the charts.
Financially, it's a train wreck. I came up the ranks as a chief financial officer, so it's always hard for me and a little humbling for me to say, "This is clinically a home run; but financially, it's just a train wreck."
MH: What are you losing?
Maron: We lose a little over $1 million a year.
MH: And how are you making that up?
Maron: Like everything else in healthcare, right? It's cross-subsidized, if you will. We make a conscious decision: is the overall system's operating margin at the end of the year going to be $1 million lighter because we keep this service? And the overwhelming decision by executive management and the board is yes. We're not abandoning it. But the commitment now is to become an advocate for changing how it's paid for and to create the awareness in what we're doing.
MH: That's obviously been successful because you were able to get $5 million in state funding.
Maron: We requested over the last five years to have some appropriation considered in the state budget to help pay for this. New Jersey has a long track record of propping up charity care, propping up graduate medical education, propping up behavioral health and other certain programs, but that funding comes out of the state's general revenue budget. We're always able to get something because it's kind of hard for people to say, "No, I'm not going to support end-of-life care," especially anybody who has ever gone through it with a relative. But it's also easier then to turn around and say, "We tried, but the political process got in the way. Unfortunately we didn't make it."
This year, we took a much different approach. We made sure that all of the leadership in the Senate and the governor's office, the commissioner of health, visited Villa Marie, because until you actually walk through the doors you just don't understand what's happening there. And it just so happened that a few of those leaders were, at the time, struggling with parents who were at end of life and understood wholeheartedly the challenges. Just to give you an idea, one of the biggest problems is that hospice care is paid on a per diem basis. And one-third of the people who get referred to us die before they even get here. I pay my staff to go out to the hospitals, nursing homes, wherever the patient is at the time. My staff does the assessment, but if the patient doesn't get into my facility, I'm not allowed to bill. I get zero.
MH: And they've died before they get there because the referral came too late?
Maron: Yes, too late. If I were to title the book, it would be It's Going to be Too Late. The providers are so uncomfortable with the topic. One, because every day that you're in their ICU they can churn and bill you, but there's also a professional incentive. They don't want to quit and they see death as defeat and a loss. And the patients and their families often can't accept it either. That's why I say it's a societal thing. They push and push until the very, very end, and then they finally say, "You know, this is horrible. I can't even talk to mom or dad because they have so many tubes in them." And wouldn't it have been nice to hold their hand and have somewhat of a conversation before it was too late.
All those things swell up and cause rage. And we try to console, right? So one of the things that we do that is different, and again, not reimbursable, is for those families who don't even make it there, that one-third, if those families want to continue bereavement counseling support, we provide it to them. We don't turn them away, because our philosophy is this is generational. And if I don't move the needle on those people who just went through it, if we don't help them become aware, then we're going to be dealing with this in perpetuity. It'll just be a never-ending cycle.
MH: What about the rest of the patients? The other two-thirds?
Maron: The second third of people who get referred to us are there less than 24 hours. So say I get to bill one day and the problem is, in Medicare's and Medicaid's math, the per diem is actually based on an average length of stay of about six weeks. And yet, one-third of the business is zero. Then the next third die within 24 hours, and the last third, on average, are with us for about six days.
MH: The $5 million appropriation is supposed to help the state create a new model for palliative care and hospice. What's that going to look like?
Maron: First and foremost, is to free up the losses so the constant daily pressure on my staff is off and I can release them to do some creative initiatives. One of those initiatives is to enhance education by capturing the stories of family members.
Also, we have a very big simulation lab, so we're creating modern simulation education scenarios—immersive scenarios that we're then going to encourage the medical society, the board of medical examiners and, if we can get the different colleges to accept this as part of re-credentialing, to have physicians go through this process in order to maintain their licenses. So first is to admit it's a problem. Second is admit I'm part of the problem. Third, start to move forward to that solution.
Part of our own re-credentialing on the Holy Name staff, regardless of the discipline, you have to go through and have documented Holy Name continuing medical education, that you've understood and participated in this. We also insist that all of our physicians record their own living will.
MH: What are your benchmarks for the next two to five years?
Maron: One of them is to change that one-third, one-third, one-third dynamic and to actually see our census grow.
When I opened a 20-bed facility, the people in the hospice world came to me, and said, "You're crazy, you can never support 20 beds." And I said, "No, you've got it all wrong. There should be a waiting list at 20 beds."You're talking about close to 10 million people who could take advantage of this thing. And so our goal is to get those beds filled, and to actually have the waiting list, and to have the appropriate length of stay in the interaction. And then, ultimately, if I can get the CMS and other payers to agree on a different formula, that would also be a home run.
For example, if I had a 95-year-old patient come to Villa, he's the last surviving member of his family, never married, had no children, basically is alone. We care for that individual and guide him through the transition to the end of life. On the other hand, a 38-year-old married mother of four whose parents are still alive, has siblings, has all sorts of friends and community support. If that mother shows up, we're not just comforting her, we've got to comfort all the people rallying to support her. We get paid the same for both patients. We are caring for that circle of family and friends and supporters, too.
That's what makes those last weeks, days, months, hours, so meaningful. And that's the value in it; but the system doesn't acknowledge that value at all.