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At 50, Medicare is spending more on hospice

Annie Baxter Jul 30, 2015
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Fifty years into the Medicare program, the federal health insurance program for Americans 65 and older, one feature has remained fairly constant: About 25 percent of spending goes to care in the last year of life. 

“This is actually a statistic that has been remarkably stable from year to year. It hasn’t changed very much,” says Tricia Neuman, director of the Medicare Policy program at the Kaiser Family Foundation. 

Neuman says a small share of Medicare dollars go to hospice care, where sick people choose to forgo major medical interventions, instead getting palliative care from a team of caregivers as they near the end of life. 

But she says spending on hospice is on the rise. Neuman says of all the Medicare beneficiaries who died in 2013, half used hospice services.

“And that is a rate that’s doubled since the year 2000,” she says.

The savings from hospice are unclear, according to Mike Plotzke, a health economist with Abt Associates. He and other economists studied hospice use among nursing home residents. Their findings, published in the New England Journal of Medicine, argue that those hospice users actually had higher end-of-life costs because of lengthy hospice care. 

“These findings give some pause about whether or not hospice is going to save Medicare money or not,” Plotzke says.

Plotzke says given the rapid expansion of the hospice care industry, the costs warrant further study.

Meanwhile, the Centers for Medicare & Medicaid Services are launching a pilot program that would allow Medicare recipients to stay in hospice but still get medical treatments like chemotherapy, which hospice patients otherwise forgo.

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