Objective: To compare per diem total direct, ancillary (laboratory and radiology) and pharmacy costs of palliative care (PC) compared to usual care (UC) patients during a terminal hospitalization; to examine the association between PC and ICU admission.
Design: Retrospective, observational cost analysis using a VA (payer) perspective.
Setting: Two urban VA medical centers.
Measurements: Demographic and health characteristics of 314 veterans admitted during two years were obtained from VA administrative data. Hospital costs came from the VA cost accounting system.
Analysis: Generalized linear models (GLM) were estimated for total direct, ancillary and pharmacy costs. Predictors included patient age, principal diagnosis, comorbidity, whether patient stay was medical or surgical, site and whether the patient was seen by the palliative care consultation team. A probit regression was used to analyze probability of ICU admission. Propensity score matching was used to improve balance in observed covariates.
Results: PC patients were 42 percentage points (95% CI, -56% [corrected] to -31%) less likely to be admitted to ICU. Total direct costs per day were $239 (95% CI, -387 to -122) lower and ancillary costs were $98 (95% CI, -133 to -57) lower than costs for UC patients. There was no difference in pharmacy costs. The results were similar using propensity score matching.
Conclusion: PC was associated with significantly lower likelihood of ICU use and lower inpatient costs compared to UC. Our findings coupled with those indicating better patient and family outcomes with PC suggest both a cost and quality incentive for hospitals to develop PC programs.