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Medicare costs in last 6 months of life driven by patient variables twice as much as geography

February 17, 2011--A study by Mount Sinai School of Medicine finds that Medicare costs at the end of life are influenced more by patient characteristics, such as ability to function, the severity of the illness, and family support than by regional factors, such as the number of hospital beds available. The study was published February 15 in The Annals of Internal Medicine.

"These new findings show that the reasons for wide variation in Medicare costs across the United States are much more complicated than previously thought," said lead author Amy Kelley, MD, Assistant Professor in the Department of Geriatrics and Palliative Medicine at Mount Sinai School of Medicine.

"The health care system should address the specific needs of patients, rather than focusing solely on the difference we see across regions. That means we need to extend care beyond the standard single disease-oriented models of care," added Dr. Kelley.

Prior studies had shown dramatic geographic variation in Medicare costs among people with chronic illnesses, especially near the end of life.

However, they did not take into account individual patient characteristics, such as a person's ability to walk and take care of themselves, day-to-day.

For this new study, researchers from Mount Sinai and the University of California, Los Angeles (UCLA) examined 2,400 older adults from across the United States, as well as characteristics of their local health care system, to explore which factors were related to Medicare expenses in their last six months of life. Impairment or decline in a person's function, or the ability to take care of him or herself, was a strong predictor of higher Medicare costs ─ even more so than their medical conditions.

Regional factors, such as having more hospital beds or a pattern of high-intensity practice also predicted higher Medicare expenses.

But overall, this study determined that patient characteristics explained ten percent of the Medicare cost variation, double the cost variation attributed to regional factors – five percent.

"This raises additional questions that future research will need to address, such as why it is that having family nearby is associated with lower Medicare costs," said Catherine Sarkisian, MD, Associate Professor in the Division of Geriatrics at UCLA and senior author on the study.

"Having a caregiver available may help people avoid undesired hospital stays. If so, future research must look at the impact on families that take on the expense and burden of care giving."

According to Dr. Kelley, the study's findings suggest that, "Health care reform will have the greatest impact on reducing costs if we focus on providing well-coordinated, high-quality care for the most complicated patients and their family caregivers."