The Health Economics of Palliative Care

Why are the savings from hospice so much lower than many experts expected? One reason is that hospice is used late in the dying trajectory, when substantial costs have already been incurred, so there are fewer expenditures to save. Another reason is that many commentators focused on the savings from reducing conventional care, especially hospitalizations, and never imagined what the costs would be of the substitute. Hospice is not free. Although a day in hospice may not be nearly as expensive as a day in the hospital, hospice tends to be delivered every day rather than episodically like hospitalization; it is labor intensive and, therefore, costly.

Some argue that even if it does not produce cost savings, hospice is at least a "better" death. Yet the randomized controlled trials evaluating quality of life do not show a benefit of hospice over conventional care.[7,9-13] There are several potential explanations for this counterintuitive finding. First, assessing outcomes in palliative care can be difficult. Although, we all have a sense of what it means to have a "good death," it is hard to quantify.

Second, overall conventional care may not be as bad as imagined. The view that conventional care is so awful may be driven by some extraordinarily bad examples rather than routine cases. Moreover, as a culture of improving the dying process gains acceptance, conventional care is probably improving, making it more difficult to measure smaller differences between the two settings. Finally, it may be difficult to achieve significant improvements in quality of life on a group level.

Coordinated Care

Some of the disappointing results from studies evaluating hospice have led investigators to look at other models of end-of-life care. A leading model is coordinated care, which aims at optimizing quality of life by providing hospital care from a palliative care unit, training community professionals, optimizing the cooperation between services, and applying a multidisciplinary approach to the patient’s problems.

Payne et al argue that coordinated care can save as much as 40% of costs and prevent end-of-life hospitalization. This is supported by their group’s effort through the Rural Cancer Outreach Program to bring state-of-the-art cancer care to medically underserved rural patients.[14] It is an important endeavor to improve care in underserved populations, but the study has several limitations, making it hard to base policy decisions on its findings. First, it is a single-institution nonrandomized study with the usual associated limitations. Second, the population consists of rural, underserved patients, which limits its generalizability to patients with adequate access to health care. Third, it evaluates cost-effectiveness of care in all patients with cancer, which limits the conclusions one can draw about cost-effectiveness of coordinated care for patients at the end of life.

The findings of two recent studies evaluating coordinated care are particularly relevant in considering the claims made by Payne et al. A study from a single institution in London suggests cost savings may be due to substantially fewer inpatient hospital days for the group that received coordinated service. This investigation limited its analysis to patients who died at the end of the study, which again raises the issue of time frame. It does, however, further support the potential of cost savings in reducing hospitalizations.

A recently published study from Norway randomized patients with a survival expectancy of 2 to 9 months to comprehensive palliative care or conventional care. The study found no significant differences in quality-of-life scores (including those on the European Organization for Research and Treatment of Cancer [EORTC] quality-of-life questionnaire) and no differences in the proportion of days in the hospital between the two groups. These results are consistent with those from many other trials of coordinated care.[7,9-12]