Cost Implications of Hospice Care for Cancer Patients in Illinois Hospitals

OBJECTIVES: The objective was to estimate the cost implications for cancer patients at end of life receiving hospice care and potential cost savings of inpatient palliative care consultations in Illinois hospitals.

METHODS: Hospital discharge data from the Illinois Health and Hospital Association’s COMPData were for the years 2012-2016, and probability of hospice use by receipt of inpatient palliative care consultation was obtained from published literature. The sample included patients aged 18 or older hospitalized for cancer and with a discharge status of in-hospital death or discharge to hospice. A generalized linear model with a log link and gamma distribution was constructed with total charges as the dependent variable and controls for demographic and clinical characteristics along with an indicator for hospice discharge. The average marginal effect of hospice discharge on total charges was calculated.

RESULTS: Of the 132,832 adult patients with cancer, 52% were female, 12% African American and 7% Hispanic. Average predicted total charges were $55,325 (2014 dollars) for those who died in the hospital versus $51,315 for those discharged to hospice. Hospital length of stay was not significantly different. At the average cost-to-charge ratio of 0.25 for Illinois hospitals, these results imply an approximate per patient savings of $1000 in hospital costs for those receiving hospice at end of life, compared to in-hospital death. Each additional 1000 patients hospitalized at the end of life who receive an inpatient palliative care consultation could result in hospital savings of $271,000.

CONCLUSIONS: Hospice use is associated with savings in hospitalization costs for patients with cancer at the end of life, likely due to less intensive resource use. Policymakers should consider cost savings to the system in forming policy for end of life care. Future research should examine cost savings in other patient populations in Illinois associated with use of hospice services.