Often, Congressional financing of programs can be secured only with indirect arguments. In the 1950s, the Eisenhower administration convinced Congress to fund the interstate highway system by claiming it was essential to enable Americans to evacuate cities in case of a nuclear attack by the Soviet Union. In the 1970s, advocates trying to persuade Congress to pay for dialysis argued that the procedure would be inexpensive, and that people would return to work and pay for themselves. Similarly, in the early 1980s, proponents of hospice advocated Medicare coverage because it was cheaper and better care for the dying.
Dr. Payne and coauthors take on the ambitious task of assessing the economic outcomes of a range of palliative therapies, focusing especially on hospice care and coordinated care.
Hospice and Cost Savings
In the 1980s and 1990s, many prominent health economists, physicians, and bioethicists argued that with all the money being spent on hospital and intensive care for the dying, hospice would surely save substantial sums. As 2 decades of research shows, this view relies on several mistaken assumptions.
The first errorone committed by Payne and colleaguesis to substantially overestimate the actual health-care expenditures on terminally ill patients. Some have claimed that up to 70% of all health-care costs for dying patients are spent in the last year of their life. Payne et al state that "52% of Medicare dollars are spent on patients in their last 60 days of life." This is erroneous.
In truth, end-of-life expenditures account for about 10% to 12% of all health-care spending and 27% of Medicare expenditures. In fact, Medicare data reveal that expenditures in the last 60 days of life account for 52% of expenditures in the last year of life, which translates into 13% of all Medicare expenditures. While these figures are highamounting to tens of billions of dollars per yearthey are not nearly as high as claimed. One consequence is that if the United States spends less than imagined on dying patients, then potential savings are also less.
A second error is to suggest that because there are high expenditures, there also must be high savings. Three randomized trials of hospice and advance directives have demonstrated no cost savings compared to conventional care,[5-7] whereas nonrandomized studies of hospice show savings of 0% to 63% during the last month of life. All studies have important methodologic limitations, including selection bias, problematic time frame of assessment, the types of medical costs assessed, and generalizability. Despite these limitations, there is general agreement among investigators that during the last month (or less) of life, hospice yields cost savings of 25% to 50%. The cost savings decrease to 10% to 17% during the last 6 months of life, and finally decrease to 0% to 10% when assessed over the last 12 months of life.