The Effect of Hospice on Medicare and Informal Care Costs: The U.S. Experience

The effect of hospice on third-party payer costs has long been of great interest in the United States and other nations. The choice of hospice could also influence the costs experienced by patients and family members as compared with when Medicare beneficiaries choose to use normal care. This article considers both types of cost in the context of the United States. Hospice provides a rare example of a medical or multiprofessional intervention that improves quality of life for patients while reducing the costs of third-party insurers. Out-of-pocket costs do not differ by hospice use, but families experience higher informal costs when a loved one who is dying uses hospice. There are likely benefits of such interactions that would offset any costs, but these are hard to quantify. The Medicare program is supposed to provide necessary and reasonable care to beneficiaries, and hospice would easily pass any such assessment.