Paying for advance care planning in medicare: Impacts on care and spending near end of life

Alice J. Chen and Jing Li

Journal of Health Economics, 2024, vol. 98, issue C

Abstract: Spending at end of life (EOL) accounts for a large and growing share of healthcare expenditures in the US, and often reflects aggressive care with questionable value for dying patients. Using a novel instrumental variables approach, we conduct the first study on the causal effect of Medicare reimbursement for advance care planning (ACP)—the process of discussing and recording patient preferences for goals of care—on care utilization, spending, and mortality outcomes for critically ill Medicare patients. We find that billed ACP services substantially increase hospice use and hospice spending within a year, accompanied by corresponding increase in one-year mortality. The impacts of ACP services on hospice use and spending are especially prominent among patients with dementia and those of lower socioeconomic status. Among decedents, death is significantly less likely to occur in the hospital, and total and inpatient spending within the last 30 days of life fall significantly. Our findings suggest that paying for ACP services can be effective in improving hospice use for critically ill Medicare patients, with the (possibly intended) consequence of increased one-year mortality.

Keywords: End of life; Medicare; Advance care planning; Quality of care; Healthcare spending (search for similar items in EconPapers)
JEL-codes: H51 I11 I18 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jhecon:v:98:y:2024:i:c:s0167629624000663

DOI: 10.1016/j.jhealeco.2024.102921

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