Hospice Services Shown to Reduce Medicare Costs, Contributing $3.5B in Savings for 2019

Earlier enrollment in hospice services can increase Medicare savings.

A new study by the National Opinion Research Center (NORC) at University of Chicago found that hospice care contributed to $3.5 billion in savings for Medicare in 2019.

Within the healthcare continuum, hospice services prioritize a patient's comfort as they approach the end of their life. Iin addition to the study confirming what hospice providers already knew to be true—that hospice care improves the end-of-life journey for patients and families—it can also save tax dollars, Ben Marcantonio, chief operating officer and interim CEO of the National Hospice and Palliative Care Organization (NHPCO), said.

Key findings

• Medicare spending for individuals that received hospice care was $3.5 billion less than that of individuals who didn't.

• The total cost of care to Medicare for beneficiaries who used hospice services was 3.1% lower that for those who didn't use hospice services.

• Earlier enrollment in hospice reduces Medicare spending even further. Hospice is associated with lower Medicare end-of-life expenditures when lengths of stay are longer than 10 days.
• Hospice stays of six months or more result in an average 11% savings for Medicare.

Indeed, earlier enrollment in hospice—and longer lengths of stay—is beneficial to reduced Medicare spending and improved end-of-life care, Marcantonio said.

“This research, along with American’s growing demand for hospice care, shows that any effort to save money by reducing hospice expenses will backfire,” he said. “In fact, we should increase the investment in hospice, both to save money and to increase the quality of end-of-life care.”

Policy makers, health systems, and healthcare payers should pay attention to these findings and put their support behind patient interests and family well-being, said William A. Dombi, president of the National Association of Home Care and Hospice.

"Our research shows that hospice is an essential component of end-of-life care and should be prioritized in any attempts to secure the future of Medicare solvency," Dianne Munevar, vice president of Health Care Strategy at NORC, said in a statement.

"For patients and families, our research provides one more reason to have conversations about the end-of-life care before it is needed and to seriously consider hospice so that when the time comes their wishes and preferences are respected."