Hospice Use Among Medicare Managed Care and Fee-for-Service Patients Dying With Cancer FREE

Cancer is a common cause of morbidity and mortality among men and women aged 65 years or older.¹ For patients with many types of cancer, effective treatment exists but for others palliative therapies may remain the only option when treatment fails. Decisions to transfer from antitumor therapies to palliative care are complex and are often made only when death is certain.^2- 3 The hospice model of care delivers palliative therapies while promoting patient autonomy and decision making at the end of life.^4- 5 Although the benefits of hospice are not well-studied, it has become a standard of care for patients with life-threatening illness. Hospice care has been shown to improve symptom management and quality of life for patients at the end of life.^6- 7 Hospice patients are more likely to die at home and are generally more satisfied with their care.⁷ Hospice use has increased over time; however, many patients enroll too late to maximize the benefits of hospice services.^8- 13

The Medicare hospice benefit, established by Congress in 1982, provides families with resources to care for their dying loved one at home.¹⁴ The Medicare hospice benefit is one of only a few services carved out of managed care. This benefit is unique because the Centers for Medicare and Medicaid Services reimburse hospices directly for services provided to managed care beneficiaries.¹⁵ Once a beneficiary enrolls in hospice, the managed care organization is relieved of its responsibility for potentially expensive end of life care.¹⁵ Higher rates of hospice use among Medicare beneficiaries with managed care insurance were first described by Virnig et al¹² for beneficiaries residing in South Florida in 1992 and in 94 of 100 counties examined across the United States during 1996.¹⁶

In this context, we used the Linked Medicare-Tumor Registry Database¹⁷ to examine the relationship between Medicare managed care and hospice use among patients dying with cancer from 1988 to 1998. Specifically, we sought to determine whether Medicare beneficiaries with managed care insurance had higher rates of hospice enrollment and longer hospice stays than beneficiaries with fee-for-service (FFS) insurance after adjusting for patient demographics, cancer characteristics, and illness duration. We further examined whether these relationships were consistent across 8 cancer diagnoses with varying prognoses and across 9 geographically diverse regions with varying levels of managed care penetration.

We conducted a retrospective analysis of the last year of life using the Linked Medicare-Tumor Registry Database.¹⁷ The linked database contains cancer information on patients aged 65 years or older from the National Cancer Institute's Surveillance, Epidemiology, and End Results (SEER) program and Medicare enrollment and use information from the Centers for Medicare and Medicaid Services. Medicare files are available for the years 1986 to 1998 for patients diagnosed with cancer between 1973 and 1996. Detailed information describing the linkage and match rates between SEER and Medicare is published elsewhere.¹⁷

We used the Medicare denominator file and hospice file. The denominator file is generated annually and contains specific demographic and enrollment information, including date of death, for every Medicare beneficiary. The hospice file contains claims for every beneficiary who received hospice services under the Medicare hospice benefit, including services provided to beneficiaries enrolled in managed care.

We studied Medicare beneficiaries who were diagnosed with cancer between January 1, 1973, and December 31, 1996, who resided in 1 of the 9 SEER coverage areas, and who died between January 1, 1988, and December 31, 1998. To ensure that beneficiaries had Medicare coverage during their last year of life, we limited our sample to patients diagnosed with cancer at 66 years or older. We studied 260 090 men and women with a first primary diagnosis of lung (n = 62 117), colorectal (n = 57 260), prostate (n = 59 826), female breast (n = 37 609), bladder (n = 19 598), pancreatic (n = 11 378), gastric (n = 9599), or liver (n = 2703) cancer. These diagnoses include the 5 most commonly diagnosed cancers in elderly individuals and cancers disproportionately diagnosed in certain racial or ethnic minority groups.

We examined 2 primary outcome measures. Hospice enrollment was measured from patients' date of diagnosis to hospice entry or death. This analysis used the 260 090 cancer patients in our study to compare the rate of hospice enrollment between managed care and FFS patients. Patients who died without receiving hospice care were treated as censored observations (n = 205 153). Length of stay in hospice was measured from date of hospice enrollment until discharge or death, whichever came first. This analysis focused on patients who received hospice care during the last year of life. We excluded 400 patients whose date of death predated their last hospice service, because we were unable to reconcile this discrepancy. Therefore, the final sample for the length of stay analysis consisted of 54 537 hospice patients. Patients who left hospice before they died were treated as censored observations (n = 6743).

We used enrollment information from the denominator file to identify beneficiaries enrolled in managed care organizations. Medicare beneficiaries can change their insurance plan on a monthly basis. Therefore, the denominator file contains an indicator of managed care enrollment for each month of the year. We classified beneficiaries as having FFS insurance if they were continuously enrolled in FFS throughout the last 6 months of life (n = 233 238). We classified beneficiaries as having managed care insurance if they were enrolled in managed care at anytime during the last 6 months of life (n = 26 852); however, 92% of beneficiaries with managed care insurance were continuously enrolled in managed care throughout the last 6 months of life.

We obtained the following information: sex, race (non-Hispanic white, black, other), marital status at diagnosis (married, not married), geographic area of residence (urban, rural), and SEER tumor registry. We categorized age at diagnosis (range, 66-110 years) as 66 to 69, 70 to 74, 75 to 79, 80 to 84, and 85 years or older. Because individual patient incomes were not available, we used ZIP code–level census data to group patients into quintiles of median household income. We classified stage using the historical system (local, regional, distant, and unstaged) for 2 reasons. First, SEER has collected the historical staging system since its inception in 1973; therefore, it is available for all patients, and SEER began collecting the American Joint Committee on Cancer (AJCC) staging system in 1988; however, it is only available for very few patients diagnosed before 1988. Second, the AJCC system is not available for patients with pancreatic, gastric, or liver cancer (3 of the 8 cancer diagnoses studied). We repeated our analyses using the AJCC system for patients with lung, colorectal, prostate, breast, and bladder cancer and found similar results.

All statistical analyses were performed using SAS software version 6.12 (SAS Institute, Cary, NC). P<.05 was considered statistically significant. We performed bivariable analyses to determine hospice use across sociodemographic characteristics, type of health insurance, stage at diagnosis, and year of diagnosis. χ² Statistics and t tests were used to identify factors that were significantly associated with hospice use.

For hospice patients, we used Kaplan-Meier analysis to estimate median length of stay comparing managed care and FFS patients and used log-rank tests to identify significant differences in hospice length of stay. We examined the distribution of length of stay by type of health insurance. Specifically, we examined 3 potential indicators of quality of care. First, we compared proportions of patients with managed care and FFS on hospice enrollment within 7 days of death as it may be an indicator of poor quality of care (ie, patients enrolled too late for maximum benefit).¹¹ Second, we examined hospice enrollment more than 180 days before death because it may indicate inappropriate use of hospice services.¹¹ Third, we sought to examine an indicator of the appropriate amount of time in hospice required to derive maximal benefits. Because there is no set standard of care, we examined hospice enrollment for 2 months or longer because it had been used previously¹⁸ (results were similar when greater enrollment for 3 months or longer was used).

We fit multivariable Cox proportional hazards regression models for each outcome to determine whether differences in hospice use between patients with managed care insurance and FFS insurance persist after adjusting for demographic and clinical characteristics. We adjusted for the following demographic (sex, race, and marital status at diagnosis, residence in urban or rural area, and median household income of ZIP code of residence) and clinical (stage at diagnosis and type of primary cancer) factors. Additionally, we adjusted for the effects of the different locations of the SEER tumor registries using a Cox proportional hazards regression model that allowed a different underlying hazard for each tumor registry. The hospice enrollment model also adjusted for age and year of diagnosis. The hospice length of stay model also adjusted for age at hospice entry, year of hospice entry, and illness duration (measured as time from diagnosis until hospice entry). Models were fit for all cancer diagnoses combined and for each type of primary cancer separately.

To explore whether the effect of managed care persisted among patients who upon diagnosis were clinically appropriate for hospice, we repeated our analyses on patients who were diagnosed with stage IV lung and colorectal cancer or with distant pancreatic, liver, and gastric cancer. Because roughly 75% of patients enrolled in managed care came from tumor registries located in northern California, Seattle, and Hawaii, we further explored the effect of managed care penetration and geographic location on hospice use by examining the relationship between hospice enrollment and length of stay within each of the 9 SEER registries included in our study. We estimated adjusted hazard ratios (HRs) and corresponding 95% confidence intervals (CIs) from the β coefficient and SE of the Cox proportional hazards regression model.¹⁹ Adjusted HRs greater than 1.0 signify higher rates of hospice enrollment and adjusted HRs of less than 1.0 indicate longer hospice stays among patients with Medicare managed care insurance due to a lower rate of discharge, which translates to a shorter length of stay.

Table 1 presents demographic and cancer characteristics of the 260 090 patients studied. Overall, 26 852 patients (10.3%) were enrolled in Medicare managed care. Table 2 presents differences in hospice use between patients with managed care and FFS insurance. Overall, 54 937 patients (21.1%) used hospice. Patients with managed care insurance were more likely to use hospice services than patients with FFS insurance (8698 [32.4%] vs 46 239 [19.8%], respectively). Although hospice use varied widely across the different cancer diagnoses, patients with managed care insurance were consistently more likely to receive hospice care than patients with FFS insurance.

Figure 1 illustrates Medicare managed care enrollment and hospice use during 11 years for our study sample. As expected, the proportion of patients enrolled in Medicare managed care increased during the study years. From 1988 to 1998, hospice use increased for both managed care and FFS patients; however, during any given year hospice use was greater among managed care patients.

Table 3 presents length of stay in hospice for patients with managed care and FFS insurance as well as the distribution of time in hospice. There was a 1-week difference in median (interquartile range) length of stay between managed care and FFS patients (32 days [11-82] vs 25 days [9-66], respectively, P<.001). Managed care patients were less likely to enroll in hospice within 7 days of death compared with FFS patients (1595 [18.6%] vs 10 366 [22.6%], respectively; P<.001). This finding was consistent across cancer diagnoses. We also found that overall managed care patients were somewhat more likely to enroll in hospice more than 180 days before death (668 [7.8%] vs 2816 [6.1%]; P<.001). However, within specific cancer diagnoses, only those managed care patients with lung, colorectal, or prostate cancer were significantly more likely to enroll in hospice more than 180 days before death. Finally, only 25% of patients dying with cancer used hospice for 2 months or more. However, overall, managed care patients were more likely than FFS patients to use hospice for at least 2 months before death (2460 [28.6%] vs 10 599 [23.1%], respectively; P<.001). This finding was consistent for patients dying with lung, colorectal, prostate, pancreatic, and gastric cancers.

Table 4 presents results from multivariable analyses of hospice enrollment and length of stay in hospice for all patients and for each type of cancer. Overall, patients with managed care insurance had higher rates of hospice use than patients with FFS insurance (adjusted HR, 1.38; 95% CI, 1.35-1.42). Rates of hospice enrollment were consistently higher among managed care patients for each type of cancer. Among hospice patients, those with managed care insurance had longer stays in hospice than patients with FFS insurance (adjusted HR, 0.91; 95% CI, 0.88-0.94). We found consistent results among patients with lung, colorectal, and prostate cancer. Moreover, we found even stronger associations between managed care and hospice enrollment (adjusted HR, 1.49; 95% CI, 1.41-1.58) and length of stay (adjusted HR, 0.88; 95% CI, 0.82-0.93) among cancer patients who, at the time of diagnosis, had stage IV or metastatic disease.

Table 5 presents results of multivariable analyses of hospice enrollment and length of stay in hospice for each tumor registry. Hawaii and San Francisco/Oakland had the greatest proportion of patients enrolled in Medicare managed care. San Francisco/Oakland and Seattle/Puget Sound had the strongest associations between enrollment in managed care and rates of hospice enrollment. Hawaii, San Francisco/Oakland, and New Mexico were the only regions in which managed care enrollment was significantly associated with hospice length of stay. As the proportion of beneficiaries enrolled in managed care decreased, rates of hospice use and length of stay were similar except that patients with managed care insurance had lower rates of hospice enrollment in metropolitan Atlanta than FFS patients and shorter hospice stays in Connecticut.

This is the first population-based study to our knowledge to examine the relationship between Medicare managed care and hospice entry and length of stay in hospice among patients with 8 different cancer diagnoses in 9 geographically diverse regions across the United States during an 11-year period. We found that although hospice use varied across different cancer diagnoses, patients enrolled in Medicare managed care had consistently higher rates of hospice use than patients enrolled in Medicare FFS. We also found overall that patients with managed care insurance had significantly longer hospice stays than patients with FFS insurance. Although the median length of stay was higher among patients with managed care insurance for each of the 8 primary cancer types, statistical significance was not achieved for some diagnoses.

We found that patients with managed care insurance were less likely to enroll in hospice care within 7 days of death and more likely to be enrolled in hospice for 2 or more months before death than patients with FFS insurance. These findings suggest that patients with managed care insurance have a greater opportunity to benefit from hospice care. Admission to hospice within a week of death does not give hospice providers sufficient time to fully develop and implement a patient-centered care plan or to adequately prepare families to care for their loved one at home.^10- 11 The optimal amount of time in hospice required for patients to derive maximum benefit is not well-studied. Some experts suggest that patients should use hospice for at least 2 months¹⁸ preceding death while others suggest at least 3 months.²⁰ Our study shows that even though patients with managed care insurance have a distinct advantage over patients with FFS insurance in enrolling in hospice and staying longer, few patients received hospice care for 2 months or more. In fact, the majority of hospice patients received hospice care for 1 month or less whether they were enrolled in managed care or FFS.

Different financial incentive structures between managed care and FFS systems are one explanation for higher rates of hospice use among Medicare managed care beneficiaries.^{12,16,21- 22} Because the Medicare program assumes the costs of care associated with the life-threatening illness for beneficiaries who enroll in hospice, a potential financial incentive exists for managed care organizations to transfer dying patients to hospice care to avoid paying the high costs of care at the end of life. We explored the possibility that patients with managed care insurance were enrolled in hospice inappropriately. We found that although patients with managed care insurance were somewhat more likely to enroll in hospice more than 180 days before death than patients with FFS, the absolute difference was negligible. Additionally, we found that the positive association with managed care enrollment was much more pronounced among patients with cancer who were clinically appropriate for hospice entry at the time of diagnosis, such as patients diagnosed with stage IV cancer or distant metastases. Although it is possible that financial incentives are aligned to encourage hospice use for managed care patients,²³ we found no evidence to suggest that managed care organizations are conserving their resources by enrolling patients in hospice care inappropriately. Finally, we found that the association of managed care with hospice use was not consistent across regions of the United States but seemed to be related to managed care enrollment in Hawaii and San Francisco/Oakland. These data suggest that factors other than financial incentives may be responsible for the associations.

Our findings are consistent with those of Virnig et al,^12,16 who found that decedents who were enrolled in managed care had higher rates of hospice use and longer hospice stays than those enrolled in FFS in South Florida and in several counties across the United Sates. Our results complement those of Virnig et al^12,16 by examining time from diagnosis to hospice for patients with different cancer diagnoses residing in several US regions. Moreover, we found that the relationship between managed care and hospice use persisted after adjusting for patient demographics, cancer stage at diagnosis, duration of cancer illness, and the location of the SEER tumor registry.

Very little is known about the differences in care experienced by patients with managed care and FFS insurance at the end of life. Cher and Lenert²⁴ found that patients with Medicare managed care were less likely than patients with FFS to receive potentially ineffective care (ie, aggressive critical care treatments that are expensive but have an unclear benefit). It is possible that elderly patients who would prefer a more aggressive course of end of life care would be more apt to participate in the FFS option.²⁵ Studies show that managed care discourages the participation of seriously ill persons, especially those with multiple chronic conditions.^26- 29 The Medical Outcomes Study³⁰ demonstrated that chronically ill elderly patients enrolled in managed care experienced poorer health outcomes than patients in FFS after 4 years of follow-up. Although previous research shows that Medicare managed care beneficiaries are more likely to disenroll from managed care when they are sick,²⁹ the vast majority of patients in our study remained in managed care throughout the last 6 months of life. The 8% of patients who disenrolled from managed care at the end of life had demographic characteristics similar to those who remained in managed care. They were, however, less likely to enroll in hospice (data not presented); therefore, our associations are underestimated and conservative.

Although market penetration of managed care appears to have a substantial effect on hospice use, the generalizability of this finding is questionable. Associations between managed care and hospice enrollment and length of stay were strong in West coast regions populated by a large proportion of beneficiaries enrolled in managed care. These regions are predominantly served by large staff-model managed care organizations, such as Kaiser Permanente and Group Health Cooperative. However, Emanuel et al²³ found higher hospice rates among Medicare managed care beneficiaries in Massachusetts, a state with a lower managed care penetration and a higher mix of organizational models (eg, group or staff, independent practice associations) of managed care than California. We found that hospice use was similar in most areas with few managed care enrollees suggesting perhaps that some level of managed care penetration is necessary for hospice enrollment practices to differ between managed care and FFS systems.

Moreover, most studies of managed care examine managed care as a single entity. Our data do not allow us to identify the managed care organizations in which patients were enrolled. Therefore, we were unable to examine how differences in organizational models and profit status relate to increased hospice use. We were also unable to explore relationships between managed care and hospice organizations. For example, some managed care organizations have established formal affiliations with organizations that provide hospice care.³¹ Others, such as Kaiser Permanente, own or operate their own hospices.

It is important to note other potential limitations to our study. Most importantly, we did not have information about patients' preferences for care. Medicare beneficiaries who enroll in managed care may be systematically different from those who select FFS.³² It is possible that dying patients enrolled in managed care might favor a less aggressive care plan. Second, we lacked factors that could potentially influence patients' care at the end of life. Specifically, we were unable to adjust for patient comorbidity, because information on comorbid illness was not available for patients with managed care insurance. Third, we lack factors related to the health care system including local availability of hospices. Finally, we had no information about patients' physicians, including their specialty, their experience caring for dying patients, or their practice patterns.

Our study demonstrates that, in general, Medicare beneficiaries with managed care insurance access hospice care earlier and stay longer than patients with FFS insurance. Moreover, areas with high market penetration of managed care appear to be responsible for this association. We found that managed care patients, particularly those residing in market areas dominated by managed care, are significantly more likely than FFS patients to access hospice care at the end of life. Our study raises the possibility that managed care organizations are more successful at facilitating or encouraging hospice use for patients dying with cancer. Additional research is needed to determine the mechanisms by which this occurs. Further research should evaluate how the observed differences in hospice use relate to patients' preferences for care, physician practice patterns, financial incentives, and system differences in the delivery of care at the end of life. Although our findings may not represent a general effect of managed care and in fact may represent the practices of a few managed care organizations with effectively integrated health care systems or established relationships with hospice providers, it would be worthwhile to explore whether elements of managed care responsible for increased hospice use can be integrated into the FFS system to facilitate access to hospice care for dying patients. However, the opportunity to learn from managed care providers is narrowing, because the availability of Medicare managed care has declined substantially since 1998.³³