A Value-Based Payment Model for Palliative Care: An Analysis of Savings and Return on Investment

Five percent of the US population accounts for 50% of total health expenditures. This "5%" problem requires moderating Medicare cost trends. SPARK, a community-based palliative care program, focused on its costliest Medicare Advantage patients. This cohort's projected costs were 280% higher than average beneficiaries, based on Medicare's risk model. Despite significant losses during enrollees' first year, a positive 5.1% ROI was found over the program's 4 years when stop-loss insurance payments were included. SPARK demonstrates that a high-quality, community-based palliative care program can be financially self-sustaining using a value-based payment model with premium plus stop-loss income exceeding actual costs.