As medicine evolves, we have always looked to develop treatments and cures to extend both the quality & longevity of life.  More recently, we have seen an aggressive shift to control an astounding $350 billion in End-of-life care spending.  Hospice has been around for the end for quite some time.  However palliative care has been progressively developing and now is a specialty of its own bridging treatment from aggressive lifesaving care to care focused to allow the natural dying process.  We do know that we have wasteful non-beneficial spending in healthcare.  We have seen healthcare increase steadily over time and have also see costs steadily shifting to the patients.   There have been monumental efforts and awareness to control the cost of medical spending.  What we don’t know is how these efforts impact the financial health of other sectors impacted by the end-of-life efforts.  For example, does the effort improve the financial health of the health insurance industry impact negatively the life and disability insurance sectors.

Actuaries associated with the life and disability insurance sectors, by nature, are keenly aware of how fast our world is changing. In many cases, actuaries are charged with modeling and shaping that change for a better tomorrow. While actuaries are rightly focused on developments for wearable technologies and Big Data, other developments are worth the attention of actuarial and financial professionals—namely, advance health care directives and the POLST Paradigm in the medical field.

The health insurance area has seen improvements in the costs of care when patients have a living will or POLST.  However, as these orders become more widely used, they will have an impact on accelerating younger age mortality on healthy lives (unfavorable to life insurers) as well as potentially decelerating mortality on less healthy lives for older age population (unfavorable to health insurers)—to say nothing of the negative impacts on the lives of those affected by the misapplication of these documents. The magnitude and impact of the misuse of these orders is not currently understood and more research is sorely needed—but we offer several hypothetical but likely conclusions. The impact on the individuals affected by misuse of advance health care directives is beyond the scope of this article; rather, we will lay out the history of these orders, the medical considerations thereof, and the potential implications for life and health insurers.

Medical Impacts and Concern

California was the first state to create living wills, passing a law in 1977 known as the Natural Death Act.¹ Its purpose was to protect patient autonomy in the case of terminal illness. The Patient Self-Determination Act in 1990 required patients be provided information on their rights to execute an advance health care directive at institutions receiving Medicare or Medicaid funding.² However, this requirement was never evidence-based in evaluating patient safety. With 60 million living wills in place in the United States, according to U.S. Census data and projections,³ incorrect interpretation could have deleterious impacts on safety and care of patients who summon 911 for an emergency or present for emergency treatment.

Advance health care directives have become a complex, global issue. In some European and Asian countries, they are not legally recognized, while in others, it is a requirement for euthanasia to be enacted.^{4, 5} As such, it is critical that we recognize the implications of living wills, Do-Not-Resuscitate orders (DNRs), and Physician Orders for Life-Sustaining Treatment (POLSTs)—and to clarify documents and medical orders to ensure patient care and safety.

Case example:

Joe is a 59-year-old healthy male who carries a $2 million term life policy. He presents to a local emergency room with chest pain. He is pale and sweaty. The emergency medicine physician reviews his EKG, which shows Joe is actively having a heart attack. Joe’s heart becomes irritable and erratic, and suddenly he goes into full-blown cardiac arrest. Joe now needs to be treated in seconds and saving him will require shocking his heart.

Joe has a living will, which the nurse gives to the physician. What should occur next? Does Joe get shocked and live, or does Joe not get shocked and die? What treatment is right for Joe? What happens if Joe has neurological problems associated with the delay in treatment? What are the implications for his health insurer (if he lives)? What are the implications for his life insurer (if he lives or dies)?

To address these questions, research known as TRIAD (The Realistic Interpretation of Advance Directives)⁶ has revealed widespread misunderstanding among clinicians about advance health care directives. We now know that interpretation and adherence to these directives represents a nationwide patient safety issue.

The Physicians Order for Life-Sustaining Treatment approach is a national paradigm that is proposed to clarify this confusion and risk, but a pair of TRIAD studies (VI and VII) published in the Journal of Patient Safety shows that patient safety risk and confusion still exists nationwide with medical professional understanding of the POLST in the setting of critical illness and end-of–life situations.^7,8 The effect of misunderstanding can be dire; the Boston Herald  published an article that pointed out a case in which a patient had a Medical Orders for Life-Sustaining Treatment (MOLST) form in place that requested all aggressive measures be taken to sustain his life. The form was allegedly not followed, and the man died of complications from infections—a cause of death that may have been mitigated had the hospital adhered to the MOLST.⁹

Advance health care directives, or advance care planning documents—most commonly living wills, DNR orders, and documents like POLST—are tools utilized for care planning.  These documents are well-meaning and generally favorable steps forward for society at large, but they have also led to unintended consequences. These documents are often created in legal jargon and then interpreted by health care professionals who have often had little or no training in what they are, how they should be interpreted, and when they are to be followed.

This issue affects all populations—especially the elderly, those with disabilities, and those who have a critical illness—and has the potential to impact the entire care continuum from pre-hospital and inpatient to the various post-discharge settings. The health insurer, medical and law professions have nationally promoted and made these documents and orders available to travel with patients or be retrieved when needed but have not adequately researched their impact on safety or the industry sectors.

The TRIAD Research Series of studies is unfunded and unbiased. It has found that this new patient safety risk exists on a nationwide scale. The risk stems from variable understanding and misinterpretation of living wills, DNR orders, and POLST-like documents, which then translate into overtreatment or under-treatment, both of which are medical errors. Yet the Institute of Medicine has not classified these in their compilation of medical errors which has now become the #3 cause of death in the United States. More recently, the Pennsylvania Patient Safety Authority has described and begun to track these types of medical errors. Regardless of calling these medical errors, both outcomes represent a lack of adherence to a patient’s predetermined wishes, and both represent risk of harm to patients.

When patients present to an emergency room or are in a hospital and are critically ill, they may undergo what is called “resuscitation.” Resuscitation is a very important term to clarify, as it once related only to reviving someone when in cardiac arrest. It now pertains to many aspects of patient care. Resuscitation is a process whereby we implement care measures quickly to aggressively treat a medical condition. Examples of resuscitation are when patients experience a heart attack, trauma, stroke, or virtually any medical condition that causes an abrupt decompensation.

Emergency departments, in particular, are settings where the patient is under the care of a physician who is often unaware of any predetermined documents or discussions regarding critical illness or end-of-life care.  In other words this is a medical stranger to this patient.  Additionally, emergency department physicians must decide quickly how to treat patients who are critically ill. This situation creates a significant safety risk for the patient. If medical staff treats and over-resuscitates the patient, then they have ignored the patient’s predetermined wishes and committed a medical error, and they have overutilized expensive resources in the process. Further, they may be at risk for criminal battery, civil litigation, and punitive damages. If medical staff members don’t treat and under-resuscitate, they have also committed a medical error and the patient may die as a result. In this scenario, the medical providers are provided immunity from prosecutions so long as they did not act with negligent intentions.

Living wills are legal documents and are often part of an estate plan to begin the advance care planning process. Living wills are created to accept or refuse life-saving medical care in the event that the patient is no longer competent and has a terminal condition or has entered a state of permanent unconsciousness (also known as a persistent vegetative state). The documents are effective once they are signed and have been determined to be valid and legal. A living will should not be followed, however, unless it has been enacted by the triggers in the document, which include loss of competency and having a terminal condition or being in a state of permanent unconsciousness. Living wills should not affect patient care just because they are present with the patient. And they do not imply, “Don’t treat me if I am critically ill.”

A DNR order is different from a living will. A DNR is an actual physician’s order that directs medical providers not to intervene with cardiopulmonary resuscitation if a patient is found with no pulse and is not breathing. Otherwise, this order is to have no impact on the care and management of the patient.

POLST is a national paradigm that has been adopted in various forms and under various names in just about all the states.  The adoption of POLST programs has grown faster than the capacity to appropriately educate health care professionals before they encounter it. POLSTs are not intended to limit care, but to guide it. Unlike living wills, a POLST is an activated medical order set, meaning clinicians should follow its instructions when they encounter the document. It is transferrable among the many health care settings (pre-hospital, hospital, nursing home).

POLSTs generally require a physician’s signature, though some states allow the form to be signed by a nurse practitioner or a physician assistant. But POLST forms are most commonly completed by nonmedical personnel when a patient is admitted to the hospital or visits the outpatient setting. Physicians are best equipped to understand diseases and treatments and are best able to communicate the risks and benefits of different treatment options. Allowing nonmedical personnel to complete POLST forms raises questions about whether the patient was able to actually give informed consent or not. Additionally, the POLST form is not standardized, and this lack of consistency diminishes understanding and exacerbates the patient safety risk. To add additional safety concerns, the POLST completion has now been stimulated through various health insurance payers to be completed on certain patient populations through the payment of financial “quality” incentives back to the health care institution. ⁽¹⁰⁾ What originated as a voluntary process of form completion has been twisted into a mandatory initiative on the part of the hospital to ensure financial viability and compliance. Additionally, and with an impact that is not yet clear, as of January 1, 2016, Medicare now has two approved codes for physicians to counsel on end-of-life planning.

In emergency departments across the nation, aging, disabled, and critically ill populations are at greatest risk to experience medical errors related to both over-resuscitation and under-resuscitation. These are real life-or-death situations in which health care professionals have seconds or minutes to act to save a life or allow someone to die, according to their wishes.

Potential Impacts to Insurers

According to the Institute of Medicine, end-of-life care is a broken process that at presentaccounts for $170 billion in spending and is projected to reach $350 billion in the very near future.¹¹ To control these rising costs, many have looked to advance health care directives, DNRs, and now POLSTs to help contain and decrease these expenditures to the Medicare and private insurance sectors. The POLST has proved to be a very powerful tool to limit unwanted resuscitations, predict place of death, and now even predict time and rate of death from the time of POLST completion.^12,13. But what effect do these orders have on life and health insurers?

There is a great deal of research on the medical side and impacts to Medicare. However, the authors of this article could not find much research on the impact to life or health insurers. At this stage, the impact to insurers are more conceptual, and we strongly urge more resources be devoted to researching the effects of these orders and their possible misapplication. The magnitude of this issue is not currently known.

In situations of under-resuscitation, the patient dies, so the life insurance impacts would likely be most noticeable:

1. For healthy individuals with a term life policy who would have otherwise outlived their term life period, the insurance company loses premium revenue from the insurance policy and pays a death claim that would have otherwise not been paid.
2. For somewhat healthy individuals with a term life policy who would have otherwise passed away a few years later, the insurance company loses some premium revenue and time value of money in paying the same death claim sooner.
3. For individuals with premium-paying permanent products, the insurance company loses premium revenue and the time value of money in paying the claim sooner.
4. Lastly, for individuals with paid-up policies, the insurance company only loses the time value of money in paying the claim sooner.

For over-resuscitation, the patient lives longer than the outcome if the medical professionals followed the patient’s instructions. We can imagine several reasons insurers should take notice:

1. Companies that offer living benefit riders will pay more claims or pay the same claims sooner in an over-resuscitation situation, resulting in more losses to the insurer.
2. Health insurance companies will be required to pay more in benefits because the patient lived longer, and because these patients tend to be less healthy, requiring even more health care at this stage in their lives.
3. Offsetting the above losses is a slight benefit to the life insurance industry for any life insurance that gets paid later. This is basically the inverse of the arguments made for under-resuscitation. However, the amounts are expected to be smaller because the presumption for an over-resuscitation patient is that the patient is older and less healthy relative to the healthy under-resuscitation patient.

The impacts for delayed resuscitation are similar to over-resuscitation, resulting in losses for living benefit riders and health insurance, with an offset for life insurance. The costs may be much greater for delayed resuscitation because the delayed resuscitation may trigger a series of neurological and other medical conditions that did not exist prior to the delayed resuscitation.

There is an important subtlety regarding delayed resuscitation when looking at the desired outcome of better practices in the ER and hospital as well as other health care settings, such as Skilled Nursing Facilities, to follow DNR and end-of-life instructions properly. If the ERs, hospitals, and nursing facilities were to follow the instructions properly, and to incorporate safeguards such as the Resuscitation Safety Checklist (Figure 1), or patient to clinician video (Trade name MIDEO®) as shown in TRIAD VIII ¹⁴, we could also eliminate some of the confusion in the ER and intensive care units—especially when moments can mean so much. Eliminating the confusion would help eliminate some of the delays. Consequently, a focus on “appropriately following DNR and end-of-life instructions properly” should result in net favorable impacts, across the board.

With health care insurers incentivized for completing POLST and Medicare now paying for physician counseling for end-of-life discussions, this issue is already affecting insurers, medical staff, and individuals alike. In the medical sector, the issue of safety and confusion has been shown in the TRIAD research and other public reporting. For insurers, the bottom-line impact is unknown—further research would be prudent to understand the potential implications.

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Ferdinando Mirarchi, D.O., is an Emergency Medicine Physician, Chief Medical Officer of MIDEO Health and the Chair of the US Acute Care Solutions National Palliative Care Committee. Andrew Erman is an insurance executive with over 30 years of actuarial experience and the opinions expressed in this article do not necessarily reflect the opinions of his current or past employers. Thaddeus Pope is a Professor of Law at the Hamline University School of Law and is a foremost expect on medical law and clinical ethics.

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10. Highmark quality bonus
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