Hospice Care.

• Author: Van Doren, Peter
• Position: Working Papers: A SUMMARY OF RECENT PAPERS THAT MAY BE OF INTEREST TO REGULATION'S READERS

"Dying or Lying? For-Profit Hospices and End of Life Care," by Jonathan Gruber, David H. Howard, Jetson Leder-Luis, and Theodore L. Caputi. NBER Working Paper no. 31035, March 2023.

Hospice care allows patients with a life expectancy of less than six months to receive palliative care at home in return for agreeing to forgo curative therapy. Hospice supporters argue that it improves the experience of dying while reducing Medicare spending.

From 2000 to 2019, the number of for-profit hospice firms quintupled while the number of non-profit firms was roughly unchanged. Medicare spending on the hospice program increased from roughly $2.5 billion in 1999 to over $20 billion in 2019.

The number of patients admitted with a diagnosis of Alzheimer's Disease and Related Dementias (ADRD) has also increased. In 1999, about 4.4 percent of ADRD patient-years included a hospice stay. By 2019 that number had risen to nearly 14.7 percent. ADRD patients now make up 38 percent of hospice episodes and account for roughly half of all hospice episodes that last more than six months.

As for-profit hospices have proliferated, the share of hospice patients who die within six months of admission has fallen. The share of hospice episodes for which the patients died within six months declined from 86.4 percent in 2000 to 79.2 percent in 2018, driven by trends in for-profit care. In fact, only 73.4 percent of 2018 for-profit hospice patients died within six months.

The increase in for-profit hospice providers combined with the increase in ADRD patients and the decrease in patients who die within six months has led to allegations of Medicare fraud by the Justice Department. Since 1999, the largest for-profit hospices have collectively paid hundreds of millions to the Justice Department to settle allegations that they admitted ineligible patients whose life expectancy exceeded six months. In addition...