Utilization and Costs of Medicare Services by Beneficiaries in Their Last Year of Life

This study examines Medicare utilization in the last year of life by over 10, 000 beneficiaries who died in the state of Colorado in 1978. Overall, Medicare use averaged over 6, 000 in 1978, compared with use by a random sample of survivors of less than 1, 000. Eighty-nine percent of the charges during the last year of life were for services received in a hospital. Average charges vary by entitlement status, with the aged using, on the average, 5, 955, the disabled 7, 771, and end-stage renal disease (ESRD) beneficiaries an average of 44, 400 in their last year. These charges are more than six times greater than yearly charges for aged and disabled survivors and more than three times greater than the yearly charges for ESRD survivors. The distributions of data for the groups who died is highly skewed, but not as skewed as that for the survivors. The top 1% of the survivors consumed 21% of the total charges, compared with less than 9% total charges consumed by the top 1% of those who died. When the data are examined by date of service divided into quarterly periods in the last year, more than 60% of the expenditures are in the last quarter just before death, with more hospital days and more intensive hospital ancillary service use during this period.