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"Dying or Lying? For-Profit Hospices and End of Life Care"
Study: Hospice care provides major Medicare savings
The late-in-life health care option reduces patient costs, even as for-profit organizations expand in the sector.
Hospice care aims to provide a health care alternative for people nearing the end of life, by sparing them unwanted medical procedures and focusing on the patient’s comfort. A new study co-authored by MIT scholars shows hospice also has a clear fiscal benefit: It generates substantial savings for the U.S. Medicare system.
The study examines the growth of for-profit hospice providers, who receive reimbursements from Medicare, and evaluates the cost of caring for patients with Alzheimer’s Disease and related dementias (ADRD). The research finds that for patients using for-profit hospice providers, there is about a $29,000 savings to Medicare over the first five years after someone is diagnosed with ADRD.
“Hospice is saving Medicare a lot of money,” says Jonathan Gruber, an MIT health care economist and co-author of a paper detailing the study’s findings. “Those are big numbers.”
In recent decades, hospice care has grown substantially. That growth has been accompanied by concerns that for-profit hospice organizations, in particular, might be overly aggressive in pursuing patients. There have also been instances of fraud by organizations in the field. And yet, the study shows that the overall dynamics of hospice are the intended ones: People are indeed receiving palliative-type care, based around comfort rather than elaborate medical procedures, at less cost.
“What we found is that hospice basically operates as advertised,” adds Gruber, the Ford Professor of Economics at MIT. “It does not extend lives on aggregate, and it does save money.”
The paper, “Dying or Lying? For-Profit Hospices and End of Life Care,” has been accepted for publication in the American Economic Review. The co-authors are Gruber, who is also head of MIT’s Department of Economics; David Howard, a professor at the Rollins School of Public Health at Emory University; Jetson Leder-Luis PhD ’20, an assistant professor at Boston University; and Theodore Caputi, a doctoral student in MIT’s Department of Economics.
Charting what more hospice access means
Hospice care in the U.S. dates to at least the 1970s. Patients opt out of their existing medical network and receive nursing care where they live, either at home or in care facilities. That care is oriented around reducing suffering and pain, rather than attempting to eliminate underlying causes. Generally, hospice patients are expected to have six months or less to live. Most Medicare funding goes to private contractors supplying medical care, and in the 1980s, the federal government started using Medicare to reimburse the medical expenses from hospice as well.
While the number of nonprofit hospice providers in the U.S. has remained fairly consistent, the number of for-profit hospice organizations grew fivefold between 2000 and 2019. Medicare payments for hospice care are now about $20 billion annually, up from $2.5 billion in 1999. People diagnosed with ADRD now make up 38 percent of hospice patients.
Still, Gruber considers the topic of hospice care relatively under-covered by analysts. To conduct the study, the research team examined over 10 million patients from 1999 through 2019, and used the growth of for-profit hospice providers to compare the effects of being enrolled in non-profit hospice care, for-profit hospice care, or staying in the larger medical system.
That means the scholars were not only evaluating hospice patients; by evaluating the larger population in a given area where and when for-profit hospice firms opened their doors, they could see what difference greater access to hospice care made. For instance, having a new for-profit hospice open locally is associated with a roughly 2 percentage point increase in for-profit hospice admissions in following years.
“We’re able to use this methodology to [analyze] if these patients would otherwise have not gone to hospice, or would have gone to a nonprofit hospice,” Gruber says.
The method also allows the scholars to estimate the substantial cost savings. And it shows that enrolling in hospice increased the five-year post-diagnosis mortality rate of ADRD patients by 8.6 percentage points, from a baseline of 66.6 percent. Entering into hospice care — which is a reversible decision — means foregoing life-extending surgeries, for instance, if people believe such procedures are no longer desirable for them.
Rethinking the cap
By providing care without more expensive medical procedures, it is understandable that hospice reduces overall medical costs. Still, given that Medicare reimburses hospice organizations, one ongoing policy concern is that hospice providers might aggressively recruit a larger percentage of patients who end up living longer than six additional months. In this way hospice providers might unduly boost their revenues and put more pressure on the Medicare budget.
To counteract this, Medicare rules include a roughly $29,205 cap on per-patient reimbursements, as of 2019. Most patients die relatively soon after entering hospice care; some will outlive the six-month expectation significantly. But hospice organizations cannot exceed that average.
However, the study also suggests the cap is a suboptimal approach; in 2018, 15.5 percent of hospice patients were being discharged from hospice care while still alive, due to the cap limiting hospice capacity. As the paper notes, “patients in hospices facing cap pressure are more likely to be discharged from hospice alive and experience higher mortality rates.”
As Gruber notes, the spending cap is partly a fraud-fighting tool. And yet the cap clearly has other, unintended consequences on patients and their medical choices, crowding some out of the hospice system.
“The cap may be throwing the baby out with the bathwater.” Gruber says. “The government has more focused tools to fight fraud. Using the cap for that is a blunt instrument.”
As long as people are informed about hospice and the medical trajectory it puts them on, then, hospice care appears to be providing a valued service at less expense than other approaches to end-of-life care.
“The holy grail in health care is things that improve quality and save money,” Gruber says. “And with hospice, there are surveys saying people like it. And it certainly saves money, and there’s no evidence it’s doing harm [to patients]. We talk about how we struggle to deal with health care costs in this country, so this seems like what we want.”
The research was supported in part by the National Institute on Aging of the National Institutes of Health.
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Written by Peter Dizikes, MIT News
Paper: “Dying or Lying? For-Profit Hospices and End of Life Care”
https://www.aeaweb.org/articles?id=10.1257/aer.20230328&&from=f
Journal
American Economic Review
Article Title
"Dying or Lying? For-Profit Hospices and End of Life Care"
New JNCCN study suggests Medicaid expansion improves cancer care and survival for people with aggressive type of breast cancer
Research led by the American Cancer Society finds Medicaid expansion was associated with longer survival and reduced treatment delays.
National Comprehensive Cancer Network
image:
JNCCN cover, October 2024.
view moreCredit: NCCN
PLYMOUTH MEETING, PA [October 24, 2024] — New research published online-ahead-of-print in JNCCN—Journal of the National Comprehensive Cancer Network found that people with newly-diagnosed hormone receptor (HR)-negative, human epidermal growth factor receptor 2 (HER2)-positive breast cancer were more likely to receive timely, guideline-concordant treatment and have longer survival in states that participate in Medicaid expansion under the Affordable Care Act (ACA).
A team of researchers—led by the American Cancer Society (ACS), and including Kathryn J. Ruddy, MD, MPH, of the Mayo Clinic Comprehensive Cancer Center, a former NCCN Foundation® Young Investigator Award recipient—used data from the National Cancer Database (NCDB) to review results for women across the United States, age 18-62, who were diagnosed with this type of breast cancer between 2010 and 2018. 19,248 of the patients lived in Medicaid expansion states, while 12,153 resided in non-expansion locations. In the expansion states, the 2-year survival rate increased from the 2010 baseline rate of 93.9% to 95.0% across the study period. However, in the non-expansion states, 2-year survival declined slightly from 94.0% to 93.9%. The biggest difference was seen in patients with Stage III disease.
“Expanding Medicaid to the 10 states that have yet to do so can help ensure that more patients with cancer benefit from life-saving treatments,” said lead researcher Kewei Sylvia Shi, MPH, Surveillance and Health Equity Science, American Cancer Society. “It’s crucial to increase access to oncology services, expand insurance coverage, and streamline diagnostic and referral processes. Stage III cancer represents a critical point in disease presentation and can further progress and become incurable if undertreated. Having health insurance coverage will make it more likely for these patients to receive timely and comprehensive access to life-saving therapies, have better medication adherence, and complete treatment, which leads to better survival outcomes.”
HR-negative, HER2-positive breast cancer is an aggressive subtype that accounts for approximately 5% of all breast cancer diagnoses.1 This is the first study to focus on the impact of Medicaid expansion on that specific population.
The study found that treatment according to recommendations from evidence-based, expert consensus driven clinical practice guidelines—such as the National Comprehensive Cancer Network® (NCCN®) Clinical Practice Guidelines in Oncology (NCCN Guidelines®)— was more likely to begin within 90 days from diagnosis in the expansion states.
“This study reinforces the important role Medicaid expansion plays in ensuring that women newly diagnosed with HR-negative, HER2-positive breast cancer have equitable access to the healthcare services they need—especially when prognosis depends on access to treatment,” said Millicent Gorham, CEO of the Alliance for Women’s Health and Prevention, who was not involved in this research. “Breast cancer is far too common, and rates are increasing among younger women, making it critical that policymakers also prioritize women’s access to preventive health screenings and appropriate treatments.”
To read the entire study, visit JNCCN.org. Complimentary access to “Association of Medicaid Expansion With Timely Receipt of Treatment and Survival Among Patients With HR-Negative, HER2-Positive Breast Cancer” is now available online. The article will also be featured in the November 2024 print edition of the journal.
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About JNCCN—Journal of the National Comprehensive Cancer Network
More than 25,000 oncologists and other cancer care professionals across the United States read JNCCN—Journal of the National Comprehensive Cancer Network. This peer-reviewed, indexed medical journal provides the latest information about innovation in translational medicine, and scientific studies related to oncology health services research, including quality care and value, bioethics, comparative and cost effectiveness, public policy, and interventional research on supportive care and survivorship. JNCCN features updates on the NCCN Clinical Practice Guidelines in Oncology (NCCN Guidelines®), review articles elaborating on guidelines recommendations, health services research, and case reports highlighting molecular insights in patient care. JNCCN is published by Harborside/BroadcastMed. Visit JNCCN.org. To inquire if you are eligible for a FREE subscription to JNCCN, visit NCCN.org/jnccn/subscribe. Follow JNCCN at x.com/JNCCN.
About the National Comprehensive Cancer Network
The National Comprehensive Cancer Network® (NCCN®) is a not-for-profit alliance of leading cancer centers devoted to patient care, research, and education. NCCN is dedicated to improving and facilitating quality, effective, equitable, and accessible cancer care so all patients can live better lives. The NCCN Clinical Practice Guidelines in Oncology (NCCN Guidelines®) provide transparent, evidence-based, expert consensus recommendations for cancer treatment, prevention, and supportive services; they are the recognized standard for clinical direction and policy in cancer management and the most thorough and frequently-updated clinical practice guidelines available in any area of medicine. The NCCN Guidelines for Patients® provide expert cancer treatment information to inform and empower patients and caregivers, through support from the NCCN Foundation®. NCCN also advances continuing education, global initiatives, policy, and research collaboration and publication in oncology. Visit NCCN.org for more information.
[1] National Cancer Institute. Cancer stat facts: female breast cancer subtypes. Available at: https://seer.cancer.gov/statfacts/html/breast-subtypes.html
Journal
Journal of the National Comprehensive Cancer Network
Subject of Research
People
Article Title
Association of Medicaid Expansion With Timely Receipt of Treatment and Survival Among Patients With HR-Negative, HER2-Positive Breast Cancer
Article Publication Date
24-Oct-2024
COI Statement
Dr. Castellino has disclosed serving as a scientific advisor for Seattle Genetics. Dr. Yabroff has disclosed serving as a scientific advisor for Flatiron Health. Dr. Han has disclosed receiving grant/research support from AstraZeneca. The remaining authors have disclosed that they have not received any financial consideration from any person or organization to support the preparation, analysis, results, or discussion of this article
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