Hospice Enrollment and Evaluation of Its Causal Effect on Hospitalization of Dying Nursing Home Patients

During the last decade, the Medicare Hospice Benefit has become an integral part of the care for a large number of terminally ill people in the United States. From 1992 to 2000 the number of hospice beneficiaries almost quadrupled, from about 157,000 (or around 9 percent of decedents 65 years old or older)—11 percent of whom lived in a nursing home (NH)—to nearly 535,000 people (about 30 percent of aged decedents)—36 percent of whom lived in a NH (Centers for Medicare and Medicaid Services 2001; MedPAC 2002). The growth of NHs offering hospice to their residents has also been particularly large, increasing from an estimated 30 percent of U.S. NHs in 1995–1997 (Petrisek and Mor 1999) to 76 percent in 2000 (Miller and Mor 2004). Hospice provides an alternative to aggressive curative care; benefits include better palliative treatment that puts emphasis on physical, emotional, and spiritual pain relief for the patient and immediate family members. To become eligible for hospice, a Medicare beneficiary needs to have been certified by his/her doctor (and the hospice medical director) as having a terminal prognosis of 6 months or less, if the terminal illness runs its expected course. Furthermore, choosing hospice entails forfeiting access to other Medicare Part A benefits, such as hospitalization and skilled nursing care, for treatment related to their terminal condition. One of the main observed effects associated with hospice has been the lower hospitalization rates among home-based hospice (Greer et al. 1983; Mor and Kidder 1985; Kidder 1992; Lewin-VHI 1995). Evidence suggests that, when integrated into the NH care process, hospice care is also associated with lower rates of hospitalization for NH hospice patients. Additionally, nonhospice patients who died in NHs having a hospice presence have also been found to have lower rates of end-of-life hospitalizations (Miller, Gozalo, and Mor 2001). This reduction in hospitalization rates has two main implications. At the patient level, hospitalizations of frail NH residents have been shown to include hazards that negatively affect the quality of life (Creditor 1993) and, in many cases, are inappropriate (Saliba et al. 2000). At the policy level, hospitalizations represent the main component of total health care costs, particularly during the last few months of life. In an recent study using both Medicare and Medicaid claims for NH decedents in the state of Florida in 1999,Miller et al. (2004) found hospital expenditures to account on average for 78 percent of all expenditures in the last month of life among those patients that did not receive hospice and 33 percent among NH residents who had any hospice in the last 30 days of life.1 One important criticism of the above types of analyses is that selection bias is introduced by the nonrandom nature of the assignment to hospice, and when not adjusted for, results may be biased (Emanuel and Emanuel 1994,Scitovsky 1994). Patients that satisfy the hospice eligibility criteria (and are knowledgeable about the status of their condition and about the availability of Medicare hospice) are free to choose to participate in the benefit. As a result, individuals that choose to enroll in hospice may have opted—regardless of hospice—for less aggressive care at end-of-life. Ignoring this self-selection would wrongly ascribe to hospice the lower inherent propensity of those hospice recipients to be hospitalized. An additional source of selection bias for NH residents stems from the fact that NHs also “choose hospice”—choose to have in place a contractual agreement with a hospice provider. As with residents, nursing facilities offering hospice may differ in important ways in their use of aggressive care from those without a hospice contract. There is some evidence in the literature that point to the influence of facility and (local) market characteristics on hospice enrollment and end-of-life hospitalization. An evaluation of the timing of hospice enrollment found strong market and provider effects, even after adjusting for several patient clinical attributes (Christakis and Iwashyna 2000). Similarly, other studies have found local health care markets to be associated with site of death (Pritchard et al. 1998; Gallo, Baker, and Bradley 2001); in particular, one study found death in a hospital setting to be highly influenced by local health care system characteristics, more so than by patient characteristics and their preferences (Pritchard et al. 1998). Consequently, it is important to consider both individual characteristics, and facility and market characteristics when controlling for selection bias. This study makes two substantial contributions to the literature. First, it estimates NH residents' propensity to elect hospice, which has not been previously examined in the literature. Second, and more importantly, this study uses inverse propensity score weighting to estimate the true (causal) hospice effect on hospitalization of NH residents in their last 30 days of life. We hypothesized that the hospice effect on hospitalization would be smaller once we controlled for residents' propensity to elect hospice, but that there would still be a large hospice effect.