Reducing Cost Volatility: The ROI of Palliative Care

For many health plan executives, some of the most persistent cost and care management challenges are concentrated within a relatively small population of members living with serious illness. These members often account for a disproportionate share of healthcare spending through repeated emergency department visits, inpatient stays, ICU utilization, and complex care needs that span multiple providers and settings.

But the issue is not solely one of utilization. It is also a reflection of how serious illness care is often delivered: episodically, reactively, and without the level of coordination needed to support patients and caregivers over time.

When care becomes fragmented, preventable exacerbations can lead to hospitalization, unmanaged symptoms may drive emergency department use, and treatment decisions can proceed without clearly aligned goals of care. The result is a familiar pattern for health plans: concentrated spend, unplanned utilization, and ongoing financial variability that can complicate medical cost performance.

As healthcare organizations continue evaluating strategies that improve outcomes while moderating spending, palliative care is receiving renewed attention as part of a more comprehensive approach to serious-illness care.
 

Why palliative care matters for health plan financial performance

Palliative care has historically been framed in clinical or compassionate terms, with a focus on symptom management, quality of life, and support for patients facing advanced illness. While those elements remain central, payer organizations and providers are increasingly examining whether earlier and more coordinated palliative interventions may also help address persistent gaps in serious-illness care management.

At its core, palliative care is intended to support individuals living with serious illness through symptom management, advance care planning, care coordination, and ongoing clinical guidance for both patients and caregivers.

Carelon Palliative Care focuses on members experiencing serious illness who may be at heightened risk for hospitalization, declining health status, or fragmented care experiences. Through earlier identification, physician-led support, symptom management, advance care planning, care coordination, and 24/7 clinical access, the program is designed to help members navigate increasingly complex care needs before crises occur.

For health plans, the discussion is not only about reducing costs, but also improving predictability within populations that historically generate high levels of utilization and financial variability. Serious illness populations can be particularly difficult to manage when care remains fragmented and reactive.

Programs that identify high-risk members earlier and provide more proactive support may help reduce utilization while improving continuity of care and overall cost stability.

Readers interested in additional perspectives on palliative care outcomes and ROI for health plans can explore more here.
 

How serious-illness care drives high cost and financial variability

The members most likely to benefit from palliative care are often those whose care trajectories are already associated with high levels of utilization and clinical complexity. These may include individuals living with advanced cancer, heart failure, COPD, renal disease, dementia, and other progressive conditions requiring ongoing decision-making across multiple providers and care settings.

Without a coordinated approach, care can quickly become reactive — contributing to repeated emergency department visits, hospital admissions, ICU utilization, and treatment patterns that may not fully align with patient goals or preferences.

For health plan leaders, the challenge is often one of concentration. A relatively small segment of members can have an outsized impact on overall healthcare spending and cost variability. As a result, targeted serious-illness interventions may offer greater financial and operational impact than broader population-based approaches that lack the same level of focus.
 

What the ROI of palliative care means for finance leaders

Health plan finance leaders increasingly expect measurable outcomes alongside clinical improvement. An internal Carelon analysis reports ROI ranging from 2.1–5.5:1 across lines of business for health plans that implemented palliative care programs.[1]

While results vary based on population characteristics, baseline utilization, and program structure, the broader significance may be less about a single performance figure and more about how palliative care is being evaluated within healthcare organizations. Increasingly, these programs are being assessed not solely as supportive services, but as targeted interventions intended to improve performance within a defined high-risk population. In that context, palliative care becomes part of a larger conversation around utilization, care coordination, and long-term cost management in serious illness populations.

How palliative care may improve member experience while reducing unplanned utilization Palliative care is sometimes viewed primarily through the lens of member and caregiver support. Yet in serious-illness care, those experiences are often closely connected to broader utilization patterns and care outcomes.

When members have access to trusted clinical support, clearer care plans, better symptom management, and assistance navigating complex medical decisions, they may be less likely to enter the healthcare system through crises. Similarly, caregivers with clearer guidance and ongoing support may be better equipped to manage changes in condition before escalation requires emergency intervention.

Care coordination and goals-of-care discussions can also support timely, informed decision-making, helping members and caregivers avoid unplanned high-acuity escalations (such as ED visits, hospital admissions or ICU stays) that may not reflect the member’s preference, particularly during periods of clinical decline.

In this way, member experience and financial performance are not entirely separate conversations. Member experience and caregiver support are especially important in serious-illness care because decisions are often emotionally complex, time-sensitive, and difficult to navigate without consistent guidance. Palliative care can help create a more supportive experience by giving members and caregivers a clearer understanding of the care plan, what symptoms to monitor, when to seek help, and how available services align with the member’s goals and preferences. For caregivers, this support may reduce uncertainty and burden while increasing confidence in managing day-to-day needs. For members, it can help make care feel more coordinated, responsive, and aligned with what matters most to them. More coordinated serious-illness care may influence both.
 

What drives palliative care ROI for health plans

Much of the financial rationale for palliative care centers on earlier identification, proactive clinical support, and improved coordination across care settings.

Carelon’s model uses predictive modeling and clinical review to identify members who may be at elevated risk for future utilization and clinical decline. The goal is to engage individuals earlier — before crises lead to hospitalization or high-cost escalation.

Serious-illness populations often require more than traditional outreach or standard care coordination. Many need ongoing symptom management, medication oversight, goals-of-care discussions, caregiver support, and aligned decision-making across providers and settings.

Access to clinicians after hours may also help reduce emergency department utilization and hospitalization by addressing symptoms and clinical questions in real time. Earlier conversations around care preferences and goals can further support decision-making that is more closely aligned with member priorities.

Together, these capabilities are intended to support a more coordinated care experience for members while helping health plans better manage utilization and financial variability within high-risk populations.
 

Palliative care as a focused approach to serious-illness cost management

Palliative care is increasingly being viewed less as a narrow end-of-life service and more as part of a broader serious-illness care strategy.

For health plans managing populations with complex clinical and utilization needs, earlier intervention, physician-led support, and more coordinated care models may offer a pathway toward reducing spending while improving care continuity and member experience.

As healthcare organizations continue evaluating approaches to serious-illness management, palliative care is becoming part of a broader discussion around how to better support high-risk populations in ways that are both clinically meaningful and operationally sustainable.

Explore the value of palliative care

Additional analysis, implementation considerations, and industry perspectives are explored in Carelon’s  palliative care eBook for health plans

If you’d like to learn more about Carelon Palliative Care, additional information is available here

[1] Internal study, reported in 2025 (measurement period Jan–Dec 2023), using propensity score matching and difference-in-difference methodology across clients with varying lines of business. Results varied across implementations and may not be representative of all plan populations or configurations.