Managed care, hospice use, site of death, and medical expenditures in the last year of life

Abstract

Background: We examined deaths of Medicare beneficiaries in Massachusetts and California to evaluate the effect of managed care on the use of hospice and site of death and to determine how hospice affects the expenditures for the last year of life. Methods: Medicare data for beneficiaries in Massachusetts (n = 37 933) and California (n = 27 685) who died in 1996 were merged with each state's death certificate files to determine site and cause of death. Expenditure data were Health Care Financing Administration payments and were divided into 30-day periods from the date of death back 12 months. Results: In Massachusetts, only 7% of decedents were enrolled in managed care organizations (MCOs); in California, 28%. More than 60% of hospice users had cancer. Hospice use was much lower in Massachusetts than in California (12% vs 18%). In both states, decedents enrolled in MCOs used hospice care much more than those enrolled in fee-for-service plans (17% vs 11% in Massachusetts and 25% vs 15% in California). This pattern persisted for those with cancer and younger (aged 65-74 years) decedents. Decedents receiving hospice care were significantly (P