Sustaining Healthcare Cost Through Utilization of Hospice at End of Life


by David Powell, D. Min., CEO, Hospice Care of South Carolina 

The future of health care cost in America cannot be sustained at its current rate of spending. Due to the fact that baby boomers are now reaching retirement age at somewhere around one-hundred people a day, they are reaching the age which requires, for many, end-of-life care. Studies have shown that the last months of a person’s life are typically the most expensive in terms of medical costs.

These baby boomers have a choice of where they will receive end-of-life care services. Typically that involves care from a family member or hired care giver in their home, moving to a long term care facility, going to the hospital, usually through the ER in a crisis situation, or hospice services provided to them wherever they call home. Each has a different price tag associated with it. The hospital ER or ICU being the most expensive with the average cost being over two-thousand dollars per visit, yet typically the first choice when a patient begins to decline rapidly at end of life. Today’s federal health insurance program, otherwise known as Medicare, is for people who are 65 or older, or younger people with certain disabilities. Medicare is part of the Social Security benefit. Each of the mentioned options for end of life care receives reimbursement for services, all or in part through Medicare. Working Americans have funds deducted from their pay that supports the Medicare budget. While some think the money deducted from their paycheck is earmarked for their retirement someday, in actuality it all goes into the Social Security fund to support current expenditures. As long as those contributing outpace those utilizing the benefit, the program stays solvent. For the first time in history, those entering retirement and needing end of life health services are out pacing those contributing to funds of Medicare. The amount of money needed to sustain the program continues to increase annually. Medicare is under extreme pressure to better manage these rising costs through identifying and eliminating fraud and abuse of the system but also by finding innovative ways to provide health services at reduced costs without sacrificing quality of care to patients. Studies have shown that the use of the hospice benefit at end of life provides a better quality of care for the patient and supporting caregiver while saving Medicare money.

Hospice offers a healthy model of communication where the physician often visits in the home and facilitates personalized care planning administered by an interdisciplinary care team providing an environment where a patient can choose a more palliative, or comfort care approach to spending their final days, often avoiding hospital admissions all together and greatly reducing the costs to Medicare. Hospice can be provided wherever a patient calls home, in a facility or private residence and is typically provided at no cost to the patient.

The Medicare Hospice benefit continues to grow each year. Some say that cutting reimbursement for hospice would be another way of reducing cost to Medicare. In fact, Medicare has cut the reimbursement rate for the past 6 years to slow the growth of the benefit. The result has been many smaller hospices have gone out of business. Continued increase in regulation coupled with cuts to reimbursement leave many people in rural or low income areas without a hospice provider. When people do not have a hospice provider, they end up going to the ER, which costs significantly more to treat. A study done by Duke University of cost to Medicare at end of life shows that use of the hospice benefit saves an average of two thousand three hundred dollars per person. Additionally, patient satisfaction surveys from the National Hospice and Palliative Care Organization show that patients were more satisfied at home utilizing the hospice benefit than dying in a facility. Unfortunately the Congressional Business Office only considers dollars spent by Medicare, not dollars saved by a program. The combination of patient satisfaction, quality care, and the cost savings to Medicare per patient negates the argument that cutting hospice reimbursement would save Medicare money.

The influx of seniors along with ever increasing healthcare costs threatens the sustainability of Medicare long term. This challenge can be met by increased utilization of the Hospice benefit, including expanding reimbursement for Palliative Care services. Hospice provides a holistic approach to care including physical, emotional, and spiritual and bereavement support. Pain and symptom management, quality care by an interdisciplinary team, reduced hospitalizations and patient satisfaction, is the winning combination for patients and families at end of life that is provided everyday across America by local hospice providers… all while saving the Medicare system money.