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  • Tom Boyd

Medicare Hospice Costs Skyrocket 70%

HealthCare Synergy Newsletter, August 16, 2011

Source material courtesy of USA Today

Among the health sector, Medicare costs for Hospice have increased the most due to for-profit companies increasing their focus on the Hospice market. According to Medicare records, Medicare spending on Hospice increased by 70% ($4.3 billion) between 2005 and 2009.

According to a recent report by the inspector general for Health and Human Services, for-profit hospices received a 29% increase in revenue compared with non-profit hospices. Medicare still pays for 84% of all Medicare eligible hospice patients.

Recently, for-profit companies have allegedly selected their patients based on how long they are predicted to live and under how much care these patients may require. For example, a patient with Alzheimer’s will more likely live longer and require less care compared to a patient with terminal cancer. Under these circumstances a Hospice organization may be placing their gross revenue as more important than providing care for their patients.

Alzheimer’s and dementia hospice patients increased from 28,000 to 174,000 from 1998 to 2008, according to the Medicare Payment Advisory Committee. A report completed by the inspector general concluded that 90% of these hospice cases were from patients that previously resided in nursing facilities before entering hospice. In less than 10 years, there were more than six times as many hospice patients receiving care from the start of the decade.

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