Despite Popular Belief, End-of-Life Care Costs on the Decline

The notion that older Americans are driving up health care costs, specifically toward the end of their lives, has become something of a truism in the health policy world. But a new study from Dartmouth has shown that Medicare spending on Americans in their final years actually dropped in the early stretch of this decade.

“Contrary to other studies, we found that per-capita end-of-life spending is decreasing and appreciably contributing to overall per-capita Medicare spending growth moderation,” the team, led by Dartmouth Institute for Health Policy & Clinical Practice professor William Weeks, wrote in its findings.

The group, which is also affiliated with the Dartmouth-Hitchcock Medical Center in Lebanon, N.H., looked at fee-for-service Medicare expenses from 2004 to 2014, with a secondary analysis of expenditures on deceased enrollees for the two years prior to their deaths.


The results run counter to the conventional wisdom: Even though just 4.3% of enrollees died between 2010 and 2014, they accounted for 54.6% of all Medicare expense reductions related to changes in practices, the team found.

Those savings came primarily from inpatient health providers — a category which included hospitals and skilled nursing facilities — along with more modest expense reductions in physician and home health costs.

The team cautions that the available data did not allow for a deeper dive into the different care settings within the inpatient category, and also did not provide detailed information about specific patients and their end-of-life spending decisions. However, the findings “warrant further investigation into why end-of-life care intensity is changing, and, particularly, how those changes influence end-of-life care quality,” they wrote in their findings, published in the May edition of JAMA Internal Medicine.


Some potential reasons included overall shifting spending patterns after the enactment of the Affordable Care Act in 2010, as well as the Great Recession’s effect on individual Medicare beneficiaries’ ability to pay for care.

The Dartmouth team’s findings provide a new perspective on the end-of-life caregiving industry in an era of intense investor interest in the hospice space. Other recent studies have suggested that boosting hospice use actually ends up costing more money in the long run, the researchers noted, while providers have also increased end-of-life care transitions in recent years.

Written by Alex Spanko

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