Background: In the United States, 5% of the population is responsible for nearly half of all health care expenditures, with a large concentration of spending driven by individuals with expensive chronic conditions in their last year of life. Outpatient palliative care under the Medicare Hospice Benefit excludes a large proportion of the chronically ill and there is widespread recognition that innovative strategies must be developed to meet the needs of the seriously ill while reducing costs.
Objective: This study aimed to evaluate the impact of a home-based palliative care program, implemented through a hospice-private payer partnership, on health care costs and utilization.
Methods: This was a prospective, observational database study where insurance enrollment and claims data were analyzed. The study population consisted of Home Connections (HC) program patients enrolled between January 1, 2010 and December 31, 2012 who subsequently expired (n=149) and who were also Independent Health members. A control group (n=537) was derived using propensity-score matching. The primary outcome variable was overall costs within the last year of life. Costs were also examined at six months, three months, one month, and two weeks. Inpatient, outpatient, ancillary, professional, and pharmacy costs were compared between the two groups. Medical service utilization and hospice enrollment and length of stay were also evaluated.
Results: Cost savings were apparent in the last three months of life—$6,804 per member per month (PMPM) cost for palliative care participants versus $10,712 for usual care. During the last two weeks of life, total allowed PMPM was $6,674 versus $13,846 for usual care. Enhanced hospice entry (70% versus 25%) and longer length of stay in hospice (median 34 versus 9 days) were observed.
Conclusions: Palliative care programs partnered with community hospice providers may achieve cost savings while helping provide care across the continuum.