States Cut Hospice-Care Coverage Despite Savings

According to recent studies, hospice care saves states millions of dollars every year -- yet some states are cutting the service from their Medicaid benefits.

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What would you call a health-care service that scores high in patient and family satisfaction, reduces the need for hospital services, promotes the dignity of every person cared for and saves states and the federal government millions of dollars each year?

You’d call it hospice care. And while most people who have taken advantage of hospice care for a friend or loved one know about the first three benefits, that last one should grab everyone’s attention. According to a study in the March issue of Health Affairs, Medicare patients who enrolled in hospice care received better treatment at a significantly lower cost to the government than those who did not use the Medicare hospice benefit.

How much lower? Annual savings to Medicare -- from significantly lower rates of hospital and intensive care use, hospital readmissions, and in-hospital death -- were as much as $6.4 million per every 1,000 additional Medicare beneficiary who chose to enroll in hospice care 15 to 30 days before death.

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This research corroborates findings from a 2007 Duke University study that found hospice care reduced Medicare costs by an average $2,309 per hospice patient, says Dr. Amy S. Kelley of Mount Sinai Hospital in New York. Kelley, who led the recent Health Affairs study, says that although there is plenty of data confirming hospice services’ quality of care, “there has been continued debate about the financial side,” which is critical in these cost-cutting times. “With concerns about the overall cost of Medicare, people are considering limiting hospice enrollment because it is thought to be expensive,” she says. “This study tells us we can provide high-quality care and by default we help avoid the ER and calling 911,” the costliest components of health care.

Regulators and legislators “need to consider this data when considering health-care policy,” says Kelley. Louisiana, for example, nearly cut hospice services from Medicaid, and Oklahoma has no Medicaid hospice benefit. These and other cost-cutting efforts may be misguided. “Rather than working to reduce Medicare hospice expenditures and creating a regulatory environment that discourages continued growth in hospice enrollment,” Kelley and her research team write in the report, “[the Center for Medicare & Medicaid Services] should focus on ensuring that patients’ preferences are elicited earlier in the course of their disease and those who want hospice care receive timely referral.”

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Hospice advocates applaud these findings. J. Donald Schumacher, president and CEO of the National Hospice and Palliative Care Organization (NHPCO), said in a recent statement that he hopes the study helps “the broader health-care community, regulators and legislators understand more fully the many benefits of hospice care.”

The NHPCO reports that only about 44 percent of dying Americans, about 1.65 million people, received hospice care in 2011. Among these patients, 84 percent had their hospice care paid for through Medicare. So the math suggests that the more people who enroll, and the sooner they enroll, the better it might be for all patients, their families and the country’s finances. Kelley estimates that if another 500,000 Medicare beneficiaries enrolled in hospice for eight to 30 days prior to their death, savings could reach upward of $3 billion.

“The bottom line is that hospice can deliver high-quality care where it is needed and avoid high-cost acute care,” Kelley says. And that’s better for everyone.

Caroline Cournoyer is GOVERNING's senior web editor.