Hospice care has long been recognized for its compassionate approach to end-of-life care, emphasizing the comfort of patients over aggressive medical treatments. Yet, a new MIT study has uncovered another facet of hospice care's impact: significant Medicare savings. This study, spearheaded by MIT experts, found that for-profit hospice providers are associated with about a $29,000 reduction in Medicare costs within five years after a patient is diagnosed with Alzheimer’s disease and related dementias (ADRD).
Against the backdrop of growing scrutiny over for-profit hospice organizations' practices and sporadic instances of fraud, the study cuts through the noise, illustrating that, at its core, hospice care delivers on its promise. Co-authored by Jonathan Gruber, an MIT health care economist, the paper, published in the American Economic Review, dives into a 20-year span of patient data and sheds light on hospice care's cost-effectiveness and care delivery. Gruber told MIT News, "Hospice is saving Medicare a lot of money."
The research highlights a growth in for-profit hospice providers, a sector that saw a fivefold increase from 2000 to 2019. Meanwhile, Medicare's expenditures on hospice care have rocketed to roughly $20 billion annually. Surprisingly, people diagnosed with ADRD account for 38 percent of hospice patients, underscoring the vital role hospice care plays for those with severe cognitive decline. Notably, the study did reveal that enrolling in hospice increased the five-year post-diagnosis mortality rate for ADRD patients, a testament to hospice care's ethos of prioritizing quality of life over the duration.
Yet, the study isn't without its critiques of current Medicare policies, notably the per-patient reimbursement cap, which stood at $29,205 as of 2019. The cap, ostensibly a measure against potential hospice fraud, unintentionally impacts patient care, leading some to be discharged from hospice services still alive and, paradoxically, experiencing higher mortality rates. "The cap may be throwing the baby out with the bathwater," Gruber stated, as reported by MIT News. Clearly, according to findings in the paper, the government possesses more precise tools for confronting fraud than the broad strokes of reimbursement caps.
As for the value delivered by hospice care, the study's findings are unequivocal. Not only does hospice care save money, but it also meets a critical healthcare need without compromising patient well-being. "The holy grail in health care is things that improve quality and save money," Gruber said, reflecting on the dual achievements of hospice care, as per MIT News. If healthcare costs are a perennial worry, the study suggests hospice care might very well be part of the solution. With the support of the National Institute on Aging of the National Institutes of Health, this study highlights hospice care not as an expenditure but as an investment in both compassion and cost savings for the healthcare system.
