What length of hospice use maximizes reduction in medical expenditures near death in the US Medicare program?

Hospices have been expected to reduce health expenditures since their addition to the US Medicare benefit package in the early-1980s, but the literature on their ability to do so is mixed. The contradictory findings noted in previous studies may be due to selection bias and the period of cost comparison used. Accounting for these, this study focuses on the length of hospice use that maximizes reductions in medical expenditures near death. We used a retrospective, case/control study of Medicare decedents (1993-2003, National Long Term Care Survey screening sample) to compare 1819 hospice decedents, with 3638 controls matched via their predicted likelihood of dying while using a hospice. Variables used to create matches were demographic, primary medical condition, cost of Medicare financed care prior to the last year of life, nursing home residence and Medicaid eligibility. Hospice use reduced Medicare program expenditures during the last year of life by an average of $2309 per hospice user; expenditures after initiation of hospice were $7318 for hospice users compared to $9627 for controls (P