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Dying or Lying? For-Profit Hospices and End of Life Care

Author

Listed:
  • Jonathan Gruber
  • David H. Howard
  • Jetson Leder-Luis
  • Theodore L. Caputi

Abstract

The Medicare hospice program is intended to provide palliative care to terminal patients, but patients with long stays in hospice are highly profitable, motivating concerns about overuse among the Alzheimer’s and Dementia (ADRD) population in the rapidly growing for-profit sector. We provide the first causal estimates of the effect of for-profit hospice on patient spending using the entry of for-profit hospices over twenty years. We find hospice has saved money for Medicare by offsetting other expensive care among ADRD patients. As a result, policies limiting hospice use including revenue caps and anti-fraud lawsuits are distortionary and deter cost-saving admissions.

Suggested Citation

  • Jonathan Gruber & David H. Howard & Jetson Leder-Luis & Theodore L. Caputi, 2023. "Dying or Lying? For-Profit Hospices and End of Life Care," NBER Working Papers 31035, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:31035
    Note: AG EH PE
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    References listed on IDEAS

    as
    1. Howard, David H. & McCarthy, Ian, 2021. "Deterrence effects of antifraud and abuse enforcement in health care," Journal of Health Economics, Elsevier, vol. 75(C).
    2. Lindrooth, Richard C. & Weisbrod, Burton A., 2007. "Do religious nonprofit and for-profit organizations respond differently to financial incentives? The hospice industry," Journal of Health Economics, Elsevier, vol. 26(2), pages 342-357, March.
    3. Dalton, Christina Marsh & Bradford, W. David, 2019. "Better together: Coexistence of for-profit and nonprofit firms with an application to the U.S. hospice industry," Journal of Health Economics, Elsevier, vol. 63(C), pages 1-18.
    4. Atul Gupta & Sabrina T Howell & Constantine Yannelis & Abhinav Gupta, 2021. "Does Private Equity Investment in Healthcare Benefit Patients? Evidence from Nursing Homes," Working Papers 2021-20, Becker Friedman Institute for Research In Economics.
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    6. Taylor Jr, Donald H. & Ostermann, Jan & Van Houtven, Courtney H. & Tulsky, James A. & Steinhauser, Karen, 2007. "What length of hospice use maximizes reduction in medical expenditures near death in the US Medicare program?," Social Science & Medicine, Elsevier, vol. 65(7), pages 1466-1478, October.
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    More about this item

    JEL classification:

    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • K4 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior

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