This study was, however, largely uninterpretable because the key comparison was between cancer patients who had used hospice and those who had not. Even with a multivariable modeling technique, the comparability is uncertain. Furthermore, these data are now outdated, having focused on patients who died in 1992, and much has changed since that time. Since Medicare Part A and B expenditures cover less than 50 percent of medical care costs for patients over 65, examination of Medicare claims alone also limits our full understanding of the potential savings or costs of hospice enrollment.

Recent unadjusted comparisons (Hogan et al., 2000) showed that the total costs of care (from the Current Medicare Beneficiary Survey) were not significantly different, although Medicare’s proportion of payment was higher for hospice users. Emanuel addressed the question of whether better care at the end of life would generally reduce costs (Emanuel, 1996). Using his assumptions and estimates, hospice and advance directives might save 25–40 percent of the last month’s costs and 10–17 percent over the last six months. A recent analysis for the Medicare Payment Advisory Commission (MedPAC) showed that patients who used hospice tended to be high-cost users before hospice enrollment (at the least, they did not include any very low cost users) and their costs were similar to non-hospice-using cancer patients at the end of life (Hogan et al., 2000).

Pritchard and colleagues reported on regional variation in where patients died and found that the availability of Medicare hospice services affected the likelihood of dying at home (Pritchard et al., 1998). However, the overwhelming predictor was regional hospital bed supply. The amount of regional variation is substantial: between 14 percent and 49 percent of Medicare beneficiaries in different areas use intensive care units (ICUs) in the last six months of life, and the aggregate Medicare costs of that time are between $6,200 and $18,000 (Dartmouth, 1999). Work on regional variation illustrates the complex relationship of location, costs, service supply, and patient preferences. Higher bed supply is almost always a strong predictor of higher costs and more hospitalization, but it is not at all clear whether there is an optimum rate or whether increased availability of other services is necessary to support low rates of hospital supply.

While patients with cancer wish to die at home among familiar surroundings, labeling this as cost-effective (or cost-saving) may be premature, given the complex nature of the disease, technological advances, family resources. Very little research has described the costs to caregivers of terminally ill cancer patients. One study of cancer patients who were undergoing active treatment reported that the average cancer home care costs for a three-month period were not much lower than the costs of nursing home care (Stommel et al., 1993).

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