Hospice is expected to decrease end-of-life care expenditures yet evidence for its financial impact remains inconclusive. One potential explanation is that hospice enrollment may produce differential cost saving effects by region, due to geographic variation in end-of-life care spending patterns. Accordingly, we examined 103,745 elderly Medicare fee-for-service beneficiaries in the Surveillance, Epidemiology, and End Results-Medicare database who died from cancer in 2004–2011. We created quintiles by the mean end-of-life expenditure per hospital referral region (HRR), and examined HRR-level variation in the associations between length of hospice enrollment and expenditures among quintiles. Results showed that longer hospice stays were associated with decreased end-of-life expenditures for patients residing in regions of high average expenditures, but not for those in regions with low average expenditures. Hospice use accounted for 8.0% of the expenditure variation between the highest and lowest quintile areas, demonstrating the powers and limitations of hospice use for cost saving.
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