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What does hospice cost?

H G Birnbaum and D Kidder

This paper presents the preliminary results of the economic analyses of the National Hospice Study (NHS), mandated by the United States Congress to investigate the implications of including hospice services in Medicare. Data were collected over an 18-month period from approximately 4,000 patients receiving hospice and conventional terminal care in 25 hospices and 12 conventional care sites. Subsequent analysis may lead to changes in the specific results, and some of the differences may be due to confounding variables that cannot be adjusted for. According to these data, hospital based (HB) hospice costs per day are 44 per cent higher than home care (HC) hospice costs per day ($95 versus $66, respectively). In addition, per patient hospice costs are 24 per cent more for patients enrolled in HB than in HC hospices ($5,890 versus $4,758, respectively). The proportional difference between HB and HC in cost per patient is smaller than the cost per day difference due to the shorter average HB length of stay, 62.3 days compared to 72.5 days for HC. Regarding the cost savings of hospice compared to conventional care, HC hospice costs are lower than conventional care costs regardless of length of stay. However, HB costs seem lower than conventional care costs only for patients with lengths of stay less than two months. Hospice and conventional care patients appear to differ with respect to predisposition toward intensive health care utilization. When this difference is explored more thoroughly in subsequent analyses, the estimated cost differential between hospice and conventional care may change.

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