[Skip to Content]
Sign In
Individual Sign In
Create an Account
Institutional Sign In
OpenAthens Shibboleth
[Skip to Content Landing]
Article
June 26, 1996

Cost Savings at the End of LifeWhat Do the Data Show?

Author Affiliations

From the Center for Outcomes and Policy Research, Division of Cancer Epidemiology and Control, Dana-Farber Cancer Institute, and the Division of Medical Ethics, Harvard Medical School, Boston, Mass.

JAMA. 1996;275(24):1907-1914. doi:10.1001/jama.1996.03530480049040
Abstract

Medical care at the end of life consumes 10% to 12% of the total health care budget and 27% of the Medicare budget. Many people claim that increased use of hospice and advance directives and lower use of high-technology interventions for terminally ill patients will produce significant cost savings. However, the studies on cost savings from hospice and advance directives are not definitive. The 3 randomized trials show no savings from these interventions, but either they are too small for confidence in their negative results or their intervention and cost accounting are flawed. The nonrandomized trials of hospice and advance directives show a wide range of savings, from 68% to none. Five methodological issues obscure the assessment of these studies: (1) selection bias in those patients who use hospice and advance directives, (2) the different time frames of assessing the costs, (3) the limited types of medical costs evaluated, (4) the variability of reporting the savings, and (5) the lack of generalizability of the findings to other patient populations. A more definitive study that assessed patients' end-of-life care preferences, use of hospice and advance directives, and direct and indirect costs would be desirable. In the absence of such a study, the existing data suggest that hospice and advance directives can save between 25% and 40% of health care costs during the last month of life, with savings decreasing to 10% to 17% over the last 6 months of life and decreasing further to 0% to 10% over the last 12 months of life. These savings are less than most people anticipate. Nevertheless, they do indicate that hospice and advance directives should be encouraged because they certainly do not cost more and they provide a means for patients to exercise their autonomy over end-of-life decisions.

(JAMA. 1996;275:1907-1914)

References
1.
Clemens SL; Neider C, ed. The Autobiography of Mark Twain . New York, NY: Harper & Row; 1959: chap 29.
2.
Horace; Fairclough HR, ed. Satires, Epistles, Ars Poetica . Cambridge, Mass: Harvard University Press; 1929:246. The Loeb Classical Library.
3.
Scitovsky AA.  'The high cost of dying' revisited. Milbank Q . 1994;72:561-591.Article
4.
d'Oronzio JC.  Good ethics, good health economics. New York Times . (June 8) , 1993:A25.
5.
Fries JF, Koop CE, Beadle CE, et al.  Reducing health care costs by reducing the need and demand for medical services. N Engl J Med . 1993;329:321-325.Article
6.
Singer PA, Lowy FH.  Rationing, patient preferences and cost of care at the end of life. Arch Intern Med . 1992;152:478-480.Article
7.
Lubitz JD, Riley GF.  Trends in Medicare payments in the last year of life. N Engl J Med . 1993; 328:1092-1096.Article
8.
Chambers CV, Diamond JJ, Perkel RL, Lasch LA.  Relationship of advance directives to hospital charges in a Medicare population. Arch Intern Med . 1994;154:541-547.Article
9.
Weeks WB, Kofoed LL, Wallace AE, Welch HG.  Advance directives and the cost of terminal hospitalization. Arch Intern Med . 1994;154:2077-2083.Article
10.
Schneiderman LJ, Kronick R, Kaplan RM, Anderson W, Langer RD.  Effects of offering advance directives on medical treatments and costs. Ann Intern Med . 1992;117:599-606.Article
11.
Teno J, Lynn J, Phillips R, et al.  Do advance directives save resources? Clin Res . 1993;41:A551. Abstract.
12.
The SUPPORT Principal Investigators.  A controlled trial to improve care for seriously ill hospitalized patients: the Study to Understand Prognoses and Preferences for Outcomes and Risks of Treatments (SUPPORT). JAMA . 1995;274:1591-1598.Article
13.
Correction: JAMA . 1996;275:1232.
14.
Mor V, Kidder D.  Cost savings in hospice: final results of the National Hospice Study. Health Serv Res . 1985;20:407-422.
15.
National Hospice Organization. An Analysis of the Cost Savings of the Medicare Hospice Benefit . Miami, Fla: Lewin-VHI Inc; 1995. National Hospice Organization Item Code 712901.
16.
Kane RL, Bernstein L, Wales J, Leibowitz A, Kaplan S.  A randomized controlled trial of hospice care. Lancet . 1984;1:890-894.Article
17.
Emanuel EJ, Emanuel LL.  The economics of dying: the illusion of cost savings at the end of life. N Engl J Med . 1994;330:540-544.Article
18.
Brooks CH, Smyth-Staruch K.  Hospice home care cost savings to third-party insurers. Med Care . 1984;22:691-703.Article
19.
Spector WD, Mor V.  Utilization and charges for terminal cancer patients in Rhode Island. Inquiry . (Winter) 1984;21:328-337.
20.
Kidder D.  The effects of hospice coverage on Medicare expenditures. Health Serv Res . 1992;27: 195-217.
21.
Amado A, Cronk BA, Mileo R.  Cost of terminal care: home hospice v. hospital. Nurs Outlook . 1979; 27:522-526.
22.
Bloom BS, Kissick PD.  Home and hospital cost of terminal illness. Med Care . 1980;18:560-564.Article
23.
Gray D, MacAdam D, Boldy D.  A comparative cost analysis of terminal cancer care in home hospice patients and controls. J Chronic Dis . 1987;40: 801-810.Article
24.
Maksoud A, Jalmigen DW, Skibinski CI.  Do not resuscitate orders and the cost of death. Arch Intern Med . 1993;153:1249-1253.Article
25.
Teno JM, Hakim RB, Knaus WA, et al.  Preferences for cardiopulmonary resuscitation: physician-patient agreement and hospital resource use. J Gen Intern Med . 1995;10:179-186.Article
26.
Jaakkimainen L, Goodwin PJ, Pater J, Warde P, Murray N, Rapp E.  Counting the cost of chemotherapy in a National Cancer Institute of Canada randomized trial of nonsmall-cell lung cancer. J Clin Oncol . 1990;8:1301-1309.
27.
Lo B.  Improving care near the end of life: why is it so hard? JAMA . 1995;274:1634-1636.Article
28.
Emanuel LL.  Structure deliberation to improve decisionmaking for the seriously ill. Hastings Cent Rep . 1995;25( (suppl) ):S14-S18.Article
29.
Berwick DM.  The SUPPORT project: lessons for action. Hastings Cent Rep . 1995;25( (suppl) ):S21-S22.
30.
Solomon MZ.  The enormity of the task: SUPPORT and changing practices. Hastings Cent Rep . 1995;25( (suppl) ):S28-S32.Article
31.
Moinpour CM, Polissar L.  Factors affecting place of death of hospice and non-hospice cancer patients. Am J Public Health . 1989;79:1549-1551.Article
32.
Emanuel EJ, Weinberg DS, Gonin R, Hummel LF, Emanuel LL.  How well is the Patient Self-determination Act working? an early assessment. Am J Med . 1993;95:619-628.Article
33.
Waldo DR, Sonnefeld ST, McKusick DR, Arnett RH III.  Health expenditures by age group, 1977 and 1987. Health Care Financing Rev . 1989; 10:111-120.
34.
Covinsky KE, Goldman L, Cook EF, et al.  The impact of serious illness on patients' families. JAMA . 1994;272:1839-1844.Article
35.
Mitchell A, Stroud CE.  Cost savings at the end of life. N Engl J Med . 1994;331:478.
36.
Rice DP, Fox PJ, Max W, et al.  The economic burden of Alzheimer's disease care. Health Aff (Millwood) . 1993;12:164-176.Article
37.
Emanuel EJ, Emanuel LL.  Cost savings at the end of life. N Engl J Med . 1994;331:478-479.
38.
Paulos JA. Innumeracy: Mathematical Illiteracy and Its Consequences . New York, NY: Vintage; 1990.
39.
Wachter RM, Luce JM, Hearst N, Lo B.  Decisions about resuscitation: inequities among patients with different diseases but similar prognoses. Ann Intern Med . 1989;111:525-532.Article
40.
Riley G, Lubitz J, Prihoda R, Rabey E.  The use and costs of Medicare services by cause of death. Inquiry . (Fall) 1987;24:233-244.
41.
Lundberg GD.  American health care system management objectives: the aura of inevitability becomes incarnate. JAMA . 1993;269:2554-2555.Article
42.
Greer DS, Mor V, Morris JN, Sherwood S, Kidder D, Birnbaum D.  An alternative in terminal care: results of the National Hospice Study. J Chronic Dis . 1986;39:9-26.Article
43.
Billings JA. Care at the end of life. Presented as part of a Harvard Medical School Division of Medical Ethics course; June 24,1995; Boston, Mass.
×