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Clin Geriatr Med. 1996 May;12(2):417-28.

Cost-effectiveness of hospice care.

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  • 1Department of Internal Medicine, University of South Florida College of Medicine, Tampa, USA.


Is hospice cost-effective? What is perfectly clear is that hospice care overall provides different care than conventional care for the dying. There is much more home care, aimed at goals of comfort, dignity, and remaining at home, and that care is distributed over longer periods of time. There is less hospital care and less anticancer therapy. Nonhospice oncologic care provides more hospital services, particularly in the last month of life, and more effort to directly attack the malignant disease. There will always be those individuals whose goals and medical condition at a particular time make one type of care the best choice for that person. Current research strongly supports hospice care as cost-saving in the last month of life. The overall effect of hospice care on costs appears to be weakly positive. This is despite the fact that hospice benefits under Medicare include absence of co-payment, medications for the primary condition, and substantially more supportive services, which represent extra value and decreased out-of-pocket expenses to the consumer. A factor strongly favoring the development of cost-effective programs is the fact that most hospices began and developed as capitated systems of care. Thus the benefits derived from providers working with patients to control costs have accrued over time. The not-for-profit structures led savings to be put back into patient care, allowing more help for families and patients. An unresolved bias of available research is the question of the extent to which hospice patients are self-selected at the time of entry for their low interest in intensive and expensive services. The most positive estimates of cost-savings in hospice have required case-mix or time-of-entry adjustments to demonstrate savings. There is little support for cost-savings in the raw data comparing total costs in hospice and conventional care groups. However, there is also no evidence that hospice care adds to costs of care for the dying. Differences in outcomes between hospice- and conventional-care have been modest. Satisfaction with care has often been higher in hospice care, but care giver burden may also be higher. Other outcome measures have been inconsistently affected. The task of measuring differences is a difficult one. Hospice patients themselves are largely unavailable for measurement during the most critical periods of care, and proxy measures of benefit are necessary. Families also tend to be grateful (or critical) around the death of a loved one; this is related to complex family relationships and emotions not likely to be influenced by any health care program. It should also be noted that the task of measuring the success of hospice care has largely used measures originally developed for understanding the impact of conventional oncologic care. The tools for understanding the effects of spiritual counseling or homemaker assistance are much less well developed. The initial goals of the Medicare hospice benefit appear to have been met: a choice is available that responds to the needs and concerns of many dying people and their families, at no additional cost to the taxpayer. In addition, millions of families have received the benefit of the lower out-of-pocket costs for health services and medications. They have benefited from the broader definition of health which made simple, continuous support services such as homemaking and personal care available at no charge. The question of hospice cost-effectiveness would seem to be a question of the past. Other questions offer even more substantial challenges to continuing hospice care as it is now offered and into the future. There are no data to allow a critique of the current structure of hospice services, or to support the link between individual components of service and outcomes. This leaves the hospice concept open to considerable manipulation.(ABSTRACT TRUNCATED)

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