American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
Dying or Lying? For-Profit Hospices and End-of-Life Care
American Economic Review
vol. 115,
no. 1, January 2025
(pp. 263–94)
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 20 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 antifraud lawsuits are distortionary and deter potentially cost-saving admissions.Citation
Gruber, Jonathan, David H. Howard, Jetson Leder-Luis, and Theodore L. Caputi. 2025. "Dying or Lying? For-Profit Hospices and End-of-Life Care." American Economic Review, 115 (1): 263–94. DOI: 10.1257/aer.20230328Additional Materials
JEL Classification
- H51 National Government Expenditures and Health
- I11 Analysis of Health Care Markets
- I12 Health Behavior
- I18 Health: Government Policy; Regulation; Public Health
- J14 Economics of the Elderly; Economics of the Handicapped; Non-labor Market Discrimination
- L84 Personal, Professional, and Business Services