New Study Addresses How Hospice Care Impacts Medicare Expenditures

A new study conducted by Duke University's Sanford Institute of Public Policy, shows that hospice care provides savings to the Medicare program. The average savings were $2,309 per person for patients who used hospice care versus non-hospice users. Other recent studies have offered competing conclusions. Some have indicated no cost differences, while others have indicated higher costs. When referencing this previous research the new study's authors state, ". . .uncertainty remains about the ability of hospice to reduce medical expenditures near death, even among recent methodologically sophisticated papers. . ."

Published in the October 2007 issue of the journal Social Science & Medicine,the study titled, “What length of hospice use maximizes reduction in medical expenditures near death in the US Medicare Program,” attempts to resolve this discrepancy by addressing the biggest obstacle to making a precise evaluation, namely ". . .the period of time over which costs of hospice users and controls are compared." Other research has focused on the last year of life rather than the actual period the hospice benefit is used.

Unlike this previous research, the new study examined costs from the day of hospice inclusion until death, and compared those costs on a day-to-day basis. The study included Medicare beneficiaries who died from 1993 to 2003. The authors ". . .identified hospice users and then created a control group of persons who did not use hospice, but who were otherwise similar."

In 1983, the hospice benefit was added to the Medicare program and use of hospice by Medicare patients has continued to rise. Citing other researchers who have demonstrated that hospice improves the quality of life for patients and family members, the authors conclude that ". . . the Medicare program appears to have a rare situation whereby something that improves quality of life also appears to reduce costs."