Hospice use saves money for Medicare

Hospice care not only provides dying people with quality-of-life benefits, it results in significant savings to Medicare, reveals a study from Duke University, Durham, N.C. "We found that hospice care reduces Medicare spending by an average of $2,309 per person compared to normal care, which typically includes expensive hospitalizations near death," contends Don Taylor, assistant professor of public policy.

The results also show that, for seven in 10 hospice users, Medicare costs would be reduced if the hospice had been used for a longer period of time. The median length of hospice use was 15 days for the 10-year study period. "Often, hospice is used for a relatively short time, but we found that patients who use the benefit for the last seven to eight weeks of life maximize cost savings to the program," Taylor explains. "This length of use also allows patients and their families to fully experience the benefits of hospice, such as bereavement counseling, palliative care, and respite for caregivers."

The hospice benefit was added to the Medicare program in 1983 to provide holistic care at the end of life. The use of the hospice benefit by Medicare patients has risen dramatically from seven percent in 1990 to 30% at present. With the baby boom generation moving into the Medicare program, hospice use is expected to continue rising.

Medicare spending on hospices has reached more than $7,000,000,000. Nearly 25% of Medicare spending is for expenses in the last year of life. By comparing costs of care on a day-by-day basis, researchers found that hospice use reduced costs for most days during the last three months of life.

"The hospice benefit appears to be that rare situation in health care where something that improves quality of life also saves money," Taylor reasons.

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