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Objective: Although an increasing fraction of Medicare beneficiaries die outside the hospital, the proportion of total Medicare expenditures attributable to care in the last year of life has not dropped. We sought to determine whether disproportionate increases in hospital treatment intensity over time among decedents are responsible for the persistent growth in end-of-life expenditures.Data Source: The 1985-1999 Medicare Medical Provider Analysis and Review (MedPAR) and Denominator files.Study Design: We sampled inpatient claims for 20 percent of all elderly fee-for-service Medicare decedents and 5 percent of all survivors between 1985 and 1999 and calculated age-, race-, and gender-adjusted per-capita inpatient expenditures and rates of intensive care unit (ICU) and intensive procedure use. We used the decedent-to-survivor expenditure ratio to determine whether growth rates among decedents outpaced growth relative to survivors, using the growth rate among survivors to control for secular trends in treatment intensity. Data Collection. The data were collected by the Centers for Medicare and Medicaid Services.Principal Findings: Real inpatient expenditures for the Medicare fee-for-service population increased by 60 percent, from $58 billion in 1985 to $90 billion in 1999, one-quarter of which were accrued by decedents. Between 1985 and 1999 the proportion of beneficiaries with one or more intensive care unit (ICU) admission increased from 30.5 percent to 35.0 percent among decedents and from 5.0 percent to 7.1 percent among survivors; those undergoing one or more intensive procedure increased from 20.9 percent to 31.0 percent among decedents and from 5.8 percent to 8.5 percent among survivors. The majority of intensive procedures in the United States were performed in the more numerous survivors, although in 1999 50 percent of feeding tube placements, 60 percent of intubations/tracheostomies, and 75 percent of cardiopulmonary resuscitations were in decedents. The proportion of beneficiaries dying in a hospital decreased from 44.4 percent to 39.3 percent, but the likelihood of being admitted to an ICU or undergoing an intensive procedure during the terminal hospitalization increased from 38.0 percent to 39.8 percent and from 17.8 percent to 30.3 percent, respectively. One in five Medicare beneficiaries who died in the hospital in 1999 received mechanical ventilation during their terminal admission.Conclusions: Inpatient treatment intensity for all fee-for-service beneficiaries increased between 1985 and 1999 regardless of survivorship status. Absolute changes in per-capita hospital expenditures, ICU admissions, and intensive inpatient procedure use were much higher among decedents. Relative changes were similar except for ICU admissions, which grew faster among survivors. The secular decline in in-hospital deaths has not resulted in decreased per capita utilization of expensive inpatient services in the last year of life. This could imply that net hospital expenditures for the dying might have been even higher over this time period if the shift toward hospice had not occurred. [ABSTRACT FROM AUTHOR]

Objective: To discuss and quantify the incentives that Medicare managed care plans have to avoid (through selective enrollment or disenrollment) people who are at risk for very high costs, focusing on Medicare beneficiaries in the last year of life-a group that accounts for more than one-quarter of Medicare's annual expenditures.Data Source: Medicare administrative claims for 1994 and 1995.Study Design: We calculated the payment a plan would have received under three risk-adjustment systems for each beneficiary in our 1995 sample based on his or her age, gender, county of residence, original reason for Medicare entitlement, and principal inpatient diagnoses received during any hospital stays in 1994. We compared these amounts to the actual costs incurred by those beneficiaries. We then looked for clinical categories that were predictive of costs, including costs in a beneficiary's last year of life, not accounted for by the risk adjusters.Data Extraction Methods: The analyses were conducted using claims for a 5 percent random sample of Medicare beneficiaries who died in 1995 and a matched group of survivors.Principal Findings: Medicare is currently implementing the Principal Inpatient Diagnostic Cost Groups (PIP-DCG) risk adjustment payment system to address the problem of risk selection in the Medicare+Choice program. We quantify the strong financial disincentives to enroll terminally ill beneficiaries that plans still have under this risk adjustment system. We also show that up to one-third of the selection observed between Medicare HMOs and the traditional fee-for-service system could be due to differential enrollment of decedents. A risk adjustment system that incorporated more of the available diagnostic information would attenuate this disincentive; however, plans could still use clinical information (not included in the risk adjustment scheme) to identify beneficiaries whose expected costs exceed expected payments.Conclusions: More disaggregated prospective risk adjustment methods and alternative payment systems that compensate plans for delivering care to certain classes of patients should be considered to ensure access to high-quality managed care for all beneficiaries. [ABSTRACT FROM AUTHOR]

Objective: To quantify the effects of informal caregiver availability and public funding on formal long-term care (LTC) expenditures in developed countries., Data Source/study Setting: Secondary data were acquired for 15 Organization for Economic Cooperation and Development (OECD) countries from 1970 to 2000., Study Design: Secondary data analysis, applying fixed- and random-effects models to time-series cross-sectional data. Outcome variables are inpatient or home heath LTC expenditures. Key explanatory variables are measures of the availability of informal caregivers, generosity in public funding for formal LTC, and the proportion of the elderly population in the total population., Data Collection/extraction Method: Aggregated macro data were obtained from OECD Health Data, United Nations Demographic Yearbooks, and U.S. Census Bureau International Data Base., Principal Findings: Most of the 15 OECD countries experienced growth in LTC expenditures over the study period. The availability of a spouse caregiver, measured by male-to-female ratio among the elderly, is associated with a $28,840 (1995 U.S. dollars) annual reduction in formal LTC expenditure per additional elderly male. Availability of an adult child caregiver, measured by female labor force participation and full-time/part-time status shift, is associated with a reduction of $310 to $3,830 in LTC expenditures. These impacts on LTC expenditure vary across countries and across time within a country., Conclusions: The availability of an informal caregiver, particularly a spouse caregiver, is among the most important factors explaining variation in LTC expenditure growth. Long-term care policies should take into account behavioral responses: decreased public funding in LTC may lead working women to leave the labor force to provide more informal care.