CBO Paper Explores Slowdown in Fee-for-service Medicare Spending
Hospice outlay growth shows pronounced decline
September 4, 2013 03:39 PM
A recently-released working paper of the Congressional Budget Office (CBO) sought to identify and quantify reasons for the slowed growth in spending for fee-for-service (FFS) Medicare in recent years. While the study is preliminary, it points to factors other than the recession and weak economy as causative of the slowdown. As part of the analysis the authors explored changes in the way health care was delivered as a contributing factor.
As part of the study, a pronounced decline in the growth rate on spending for hospice services was noted. In the early 2000s there was a rapid expansion of hospice outlays - roughly 20 percent per year from 2000 to 2005 - followed by more tempered growth in later years - roughly 6 percent per year from 2007 to 2010. By using the same time period comparison, the use of hospice services at the end of life rose dramatically across the decade – from 22 percent of dying elderly FFS beneficiaries in 2000 to 42 percent in 2009.
The study also indicates that the share of deaths occurring in acute care hospitals, which are higher-cost settings than hospice, fell from 33 to 25 percent. The paper does note that a rising share of hospice stays shorter than three days - 5 percent in 2000 and 10 percent in 2009 - combined with growth in the rate of use of intensive care units in the final 30 days of life - 24 percent in 2000 and 29 percent in 2009 - supports a belief that at least “some of the increased use of hospice services did not result in less intensive end-of-life care overall.” The study findings do indicate that it is possible that the care patients at the end of life received may have become less intense toward the end of the decade.
If such was the case, it is possible that the more rapid growth in hospice utilization early in the decade contributed to faster Medicare spending growth, and that the tempered growth in hospice outlays later in the decade could have contributed to the slowdown in overall Medicare spending.
The working paper, “Why Has Growth in Spending for Fee-for-service Medicare Slowed?” is available here.