Dan-Kohl-Head-Shot

Dan Kohl, CEO

With all of the talk of the sequester and Obamacare lately, I thought it would be a good time to revisit a study completed at Duke University in 2007 that outlines the many benefits of hospice and compare it to a new study out of Mount Sinai published in this month’s issue of Health Affairs.

The Duke study concluded that hospice reduces Medicare spending by $2,309 per person at end of life.

Background on the Duke study 

In 2006, MEDPAC analyzed when most Medicare dollars are spent. They determined that 25% of Medicare spending occurs in the last year of life. Researchers at Duke’s Sanford Institute of Public Policy then decided to analyze the costs to Medicare for people who died from 1993 to 2003. They compared hospice users to non-hospice users who were otherwise similar in age, race, gender and health conditions. For hospice users, the median length of time on hospice was just 15 days.

Key Findings:

  • An overall savings of $2,309 per hospice patient.
  • For seven out of ten hospice patients, the savings to Medicare would have been even greater if the patient had been admitted to hospice sooner.
  • The day-to-day costs of patient care were reduced for most days during the last three months of life when hospice was involved with the case.
  • The average cost to Medicare was $7,318 for hospice users and $9,627 for non-hospice users beginning with the day the hospice user was admitted as a patient.
  • When the primary medical diagnosis is cancer Medicare’s savings after eight weeks of hospice care is almost $7,000.
  • A non-cancer hospice beneficiary savings was about $3,500 over the last seven weeks of life.

The new Mount Sinai study shows that hospice results in better quality care and reduced cost.

The study shows that hospice enrollment:

  • lowers Medicare expenditures
  • lowers hospital Intensive Care Unit (ICU) use
  • lowers 30-day hospital re-admissions
  • lowers in-hospital death

The study at Mt. Sinai further showed that if 1,000 more Medicare beneficiaries were to enroll in hospice at least 15 days prior to the end of life, Medicare could save an additional $6.4 million. The researchers went on to say, “Building upon prior studies of hospice and palliative care that have demonstrated higher quality and improved patient and family satisfaction [these findings suggest] that hospice and palliative care are critical components in achieving greater value through health care reform: namely, improved quality and reduced costs.

Hospice Savings and Medicare

The primary savings for Medicare comes from reducing hospital admissions. Instead of dying in a hospital intensive care unit, hospice care allows people to receive care at home through the end of life. That is where surveys by the National Palliative Care and Hospice Organization find 83% of people want to die if given that choice.

The bottom line is that an early admission to hospice improves quality-of-life for the patient and family while providing a significant cost savings to Medicare.

You can read the full Duke research study, “What Length of Hospice Use Maximizes Reduction in Medical Expenditures Near Death in the US Medicare Program?” here and download the Mount Sinai study here.