AN ECONOMIC ANALYSIS OF SELECTED HOSPICE PROGRAMS

Hospice programs, a philosophy of care to terminally ill patients, have proliferated in many forms in the past decade. Advocates of these programs have stressed their cost savings and intangible benefits to the patients and their families in terms of a more humane approach to assist dying patients. As a potential competitor in the health care delivery systems, the evaluation of these programs has been sparse and provide little empirical evidence to support their allegations that cost savings do occur. The purposes of this retrospective study which examined deceased patient medical and billing records were to compare and contrast the costs of dying in two types of hospice programs with two types of hospitals. Patients were selected from an inpatient nursing home hospice, a home care hospice, a teaching hospital, and a municipal hospital. In the event that costs were billed directly to the deceased patient and were not available, proxies were used. To recognize the variations in costs incurred in caring for different types of cancer, the data were categorized into twelve cancer groups which reflected usual reporting of cancer statistics. Noting that per diem cost data might be offset by extended lengths of stays in any type of institution, costs per case were also computed. It was hypothesized that, as a result of the less vigorous type of medical treatment and services rendered in hospice programs, hospice care would be less costly than hospital care. Categorizing the data for each type of cancer within each institution, the findings provided support for the premise that hospices were a less costly method of providing care to the terminally ill. Regardless of which type of hospice program, inpatient nursing home or home care, the empirical evidence, both per diem cost and cost per case analyses, support the premise of lower costs in hospice programs with a high degree of statistical significance. The findings of this study have far-ranging implications, from public policy planning to third party reimbursement planning for the future