Managed Care, Hospice Use, Site of Death, and Medical Expenditures in the Last Year of Life

Abstract
FOR MORE than 2 decades, there has been concern about the high costs of end-of-life care.1-4 In the Medicare program in the late 1980s, approximately 27% of all expenditures were devoted to medical services for the approximately 1.7 million decedents, representing 5% of all beneficiaries.5 Many have argued that there should be substantial cost savings in end-of-life care, especially through the use of a hospice as a substitute for hospital care. But there has been controversy about whether hospice does in fact lead to cost savings.6-11 In addition, it is argued that hospice is used by few dying patients, almost all of whom are patients with cancer, and, therefore, whatever cost savings per patient there might be from hospice use are unlikely to add up to substantial systemwide savings.4

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