Summary

This report discusses issues related to the use of Medicare's hospice benefit, which indicates that beneficiaries with all types of terminal diseases are making use of the facilities in greater numbers every year. However there are factors that affect the use of the hospice benefit, and these factors also contribute to the availability of hospice providers. Although more beneficiaries are choosing hospice, many are doing so closer to the time of death. Half of Medicare hospice users are enrolled for 19 or fewer days, and service periods of 1 week or less are common. Many factors influence decisions about whether and when to begin hospice services, including physician practices, patient preferences and circumstances, and general awareness of the benefit among professionals and the public. The financial conditions of hospice costs are uncertain because data on provider costs are not available. The HealthCare Financing Administration is beginning to gather information from hospice providers about their costs, which should allow the adequacy of Medicare hospice payment rates to be evaluated in the relatively near future.

GAO noted that: (1) the number of Medicare beneficiaries choosing hospice services has grown substantially during the past decade--nearly 360,000 beneficiaries enrolled in 1998, more than twice the number that elected hospice in 1992; (2) cancer patients account for more than half of Medicare hospice users, but the most dramatic growth in use is among persons with other terminal conditions, such as heart disease, lung disease, stroke, or Alzheimer's disease; (3) although more beneficiaries are choosing hospice, many are doing so closer to the time of death; (4) half of Medicare hospice users are enrolled for 19 or fewer days, and service periods of 1 week or less are common; (5) many factors influence decisions about whether and when to begin hospice services, including physician practices, patient preferences and circumstances, and general awareness of the benefit among professionals and the public; (6) along with these factors, federal oversight of compliance with Medicare eligibility requirements may also have affected hospice use; (7) growth in the number of Medicare hospice providers in both urban and rural areas and in almost every state suggests that hospice services are more widely available to program beneficiaries than in the past; (8) at the same time, hospice officials report increased cost pressures from shorter patient enrollment periods and the use of more expensive forms of palliative care; (9) because data on provider costs are not available, however, the effect of these factors on the overall financial condition of hospice providers is uncertain; and (10) the Health Care Financing Administration is beginning to gather information from hospice providers about their costs, which should allow the adequacy of Medicare hospice payment rates to be evaluated in the relatively near future.