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Why the conventional wisdom on hospice care was wrong

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Conventional wisdom has been that hospice care at the end of life will improve someone’s final days and save money. It’s certainly cheaper to have a team of caregivers check on someone a few times a day compared to stays in intensive care units.

But it turns out that was wrong, according to a New England Journal of Medicine report out Wednesday.

In fact, for patients in nursing homes, spending went up by nearly $6,800 per patient due to increased hospice care.

Here’s the first thing you need to know about hospice care: between 2000 and 2012, the number of people enrolling doubled — which is great, says Pedro Gozalo, a healthcare economist at Brown.

“Hospice does seem to bring value by decreasing services like ICU unitization and feed tube insertion,” he says.

Gozalo, who wrote the report, found hospice is doing what it’s supposed to do; lower visits to intensive care, hospitalizations, the expensive stuff. But here’s the problem: at least for nursing home patients, those savings get gobbled up because people are spending longer and longer in hospice.

In part, that’s because more complicated patients are being enrolled, like folks with Alzheimer’s, Gozalo says, and it’s hard to know how much time they have left.

“Some person may appear frail,” he says. “Then after a few weeks go by, then they perk up again and then they seem to be stable for two, three more years. It’s just not easy to do.”

More than complex cases though are driving these longer hospice stays, which brings me to the second thing you need to know about hospice care: spending has exploded from $2.9 billion in 2000 to $15 billion in 2012.

Some people worry hospice companies are taking advantage of long-standing payment policies, basically bilking the federal government. Nancy Harrison works for the Office of the Inspector General at Health and Human Services, and filed a report on the issue. 

“We found patterns that show that companies target patients with long lengths of stay and medically uncomplicated conditions who may offer the greatest financial gain,” she says.

Regulators in Washington have responded and hope to clamp down on this practice by changing how hospice companies get paid.  

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