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Understanding Hospice Care, from Stages to Cost

April 1, 2021
April 1, 2021

What is Hospice?

The concept of hospice care is still a relatively new one in healthcare. Dr. Cicely Saunders began what is now the hospice movement fairly recently – in the 1960s – when she established what is believed to be the first hospice outside of London.

Hospice care is designed to provide supportive care to patients in the final stages of a terminal illness. Rather than focus on a cure, this type of care focuses on comfort and quality of life. Hospice care may be delivered in a hospital, a free-standing hospice or (most frequently) in a patient or caregivers home.

Hospice uses a multi-disciplinary approach that embraces the needs of both patients and family. The team may include physicians, nurses, social workers, clergy, dieticians, respite care providers and bereavement counselors.

In order to meet the criteria for hospice reimbursement, most insurers require that:

  • The patient has a terminal timeline of 6 months or less as determined by a physician as well as specific clinical findings
  • The patient provides a signed statement electing hospice care over other types of treatment
  • The patient seeks only the defined hospice care as defined by the insurer

Hospice – The Four Stages of Care

Medicare-certified hospice providers must provide all four levels of hospice care.

  • Level 1 – Routine Home Care

    Routine home care is the most basic of hospice services and may be delivered in the patient’s home or in a skilled nursing facility. While this is described as the most basic level, it actually includes a broad span of services from nurses, physicians, social services, home health aides, counseling, medications, medical equipment and supplies and lab services.

  • Level 2 -Continuous Home Care

    At this level of care a nurse and or an aide will remain in the home for 8-24 hours each day. Continuous care is a short-term option for the provision of hospice care and is re-evaluated every 24 hours. It is used for patients when their pain is not well controlled, they are experiencing severe nausea, vomiting or diarrhea, breathing difficulties or when there is a problem in the patient’s caregiver network that results in gaps or inadequacies in the patient’s care.

  • Level 3 – General Inpatient Care

    A patient who experiences sudden or short-term symptoms that are too difficult to manage at home may need this level of care. Symptoms such as those described in Level 2 above may also necessitate a move to inpatient care. Inpatient care means that nurses are available at all hours to provide medication, comfort and to closely monitor the patient’s condition.

    This level of care may be provided in a variety of settings that include a free-standing hospice facility, a hospice unit in a regular acute care hospital or a hospice unit in a skilled nursing facility.

  • Level 4 – Respite Care

This level of care is essentially for the family. If the family is having a difficult time caring for the patient at home due to caregiver stress or other circumstances, a patient may be admitted to an inpatient unit to provide a break for caregivers. There is a five-day limit on this type of care. At the end of five days, the patient is typically discharged to home care.

Hospice – The Cost

Hospice costs like most healthcare costs in the US are largely invisible to patients, but there are significant costs associated with hospice care. Care that is provided on an inpatient basis can cost up to $10,000 per month depending on the level of care that is provided. Approximately 85% of the costs of end-of-life care are paid by government agencies with Medicare picking up the largest share (approximately 85%). Medicaid, private insurers, charities and self-pay are all in the single digits.

The healthcare delivery system, and how it is financed, has changed considerably since the 1960s when Dr. Saunders formalized the concept of hospice care and it has gotten substantially more expensive. The strides made in medicine have resulted in increased lifespans and while hospice patients spend a limited amount of time in hospice, the time that they do spend has increased in recent years. This along with an increase in the number of conditions treated in hospice has resulted in cost increases of up to $1 billion dollars per year.

Learn more about HealthStream workforce development solutions for hospice.