Association between Hospice Spending on Patient Care and Rates of Hospitalization and Medicare Expenditures of Hospice Enrollees

Care at the end of life is increasingly fragmented and is characterized by multiple hospitalizations, even among patients enrolled with hospice.To determine whether hospice spending on direct patient care (including the cost of home visits, drugs, equipment, and counseling) is associated with hospital utilization and Medicare expenditures of hospice enrollees.Longitudinal, observational cohort study (2008-2010).Medicare beneficiaries (N = 101,261) enrolled in a national random sample of freestanding hospices (N = 355).We used Medicare Hospice Cost reports to estimate hospice spending on direct patient care and Medicare claim data to estimate rates of hospitalization and Medicare expenditures.Hospice mean direct patient care costs were $86 per patient day, the largest component being patient visits by hospice staff (e.g., nurse, physician, and counselor visits). After case-mix adjustment, hospices spending the most on direct patient care had patients with 5.2% fewer hospital admissions, 6.3% fewer emergency department visits, 1.6% fewer intensive care unit stays, and $1,700 less in nonhospice Medicare expenditures per patient compared with hospices spending the least on direct patient care (p 0.01 for each comparison). Ninety percent of hospices with the lowest spending on direct patient care and highest rates of hospital use were for-profit hospices.Patients cared for by hospices with lower direct patient care costs had higher hospitalization rates and were overrepresented by for-profit hospices. Greater investment by hospices in direct patient care may help Centers for Medicare and Medicaid Services avoid high-cost hospital care for patients at the end of life.