CONTEXT: Palliative care consultation teams in hospitals are becoming increasingly more common. Palliative care improves the quality of hospital care for patients with advanced disease. Less is known about its effects on hospital costs. OBJECTIVE: To evaluate the relationship between palliative care consultation and hospital costs in patients with advanced disease. DESIGN, SETTING, AND PATIENTS: An observational study of 3321 veterans hospitalized with advanced disease between October 1, 2004 and September 30, 2006. The sample includes 606 (18%) veterans who received palliative care and 2715 (82%) who received usual hospital care. October 1, 2004 and September 30, 2006. MAIN OUTCOME MEASURES: We studied the costs and intensive care unit (ICU) use of palliative versus usual care for patients in five Veterans Affairs hospitals over a 2-year period. We used an instrumental variable approach to control for unmeasured characteristics that affect both treatment and outcome. RESULTS: The average daily total direct hospital costs were Dollars 464 a day lower for the 606 patients receiving palliative compared to the 2715 receiving usual care (p < 0.001). Palliative care patients were 43.7 percentage points less likely to be admitted to ICU during the hospitalization than usual care patients (p < 0.001). COMMENTS: Palliative care for patients hospitalized with advanced disease results in lower costs of care and less utilization of intensive care compared to similar patients receiving usual care. Selection on unobserved characteristics plays an important role in the determination of costs of care.
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