White Papers

Era of the Elder: The Economic and Workforce Impact of the End-of-Life-Care

Health Care Challenges of an Aging America:
Implications for Employers, Health Systems, & Public Policy
April 1-2, 2002
Era of the Elders –
The Economic and Workforce Impact of End of Life Care
Remarks by
Dorothy E. Deremo
Hospice of Michigan
President and CEO


The baby boomer generation is the demographic “pig in the python” of the United States population. Unfortunately, this “pig” is not getting smaller with digestion. Instead, the boomer generation will continue to swell as it lives longer than any other generation in the history of human kind. There are huge implications for all of society as we enter into the “Era of Elders” (Detroit Free Press, October 5, 2000.) I predict that “ground zero” will be in the health care sector … and, it is crisis that we are ill equipped for with our present health care delivery systems and reimbursement structures.

For example, the hospice benefit was designed in 1982 for individuals with life limiting illness that were expected to be terminal within six months if their disease followed its natural course. The hypothesis was that offering the wholistic, supportive services of comfort care would be too expensive if provided concurrently with aggressive treatment. Unfortunately, end-stage chronic illnesses, like cancer, congestive heart failure, emphysema, and dementia have disease trajectories that may last several years. A great deal of physical, emotional, social, and spiritual suffering occurs during that time.

Therefore, patients and families are forced to make a terrible choice: you must admit that you or your loved has no hope for life longer than six months in order to receive pain and symptom management, emotional, social, and spiritual support from hospice experts; or, get aggressive treatment and suffer until the last possible second. This artificial “six-month” barrier keeps patients and families from accessing high quality, cost-effective comfort care, also called palliative care, while driving of the overall cost of health care in futile treatments. To put this in a dollar and cents perspective, in 1998 inpatient hospital charges for Medicare averaged $2177 per day. Nursing home charges averaged, $482 per day. Hospice charges averaged only $113 per day for the same period. Within that daily rate, hospices provide medical, nursing, social work, and spiritual care services for the patient and family as well as medications, supplies, equipment, and treatments for the hospice diagnosis as well as 13 months of bereavement services for the loved ones after the patient’s death. Hospices are providing palliative care for the patient but primary risk prevention services for the patient’s loved ones by relieving caregiver burdens and dealing directly with grief to prevent stress related illness and chronic depression. At Hospice of Michigan (HOM), the most expensive patients that we care for are in hospitals. Even these patients cost an average of $475 a day – far below the current charges for traditional acute care.

Unfortunately, hospice services are woefully underutilized while acute care is over-utilized. The median length of stay in our HOM program is 13 days even though we have very high quality ratings from our patients and families once they receive our services. To give you an idea of the scope of our services, HOM is serving over 900 patents a day across 45 counties in Michigan. We are the largest hospice in Michigan and the largest statewide non-profit hospice in the country. Our services are provided in urban, suburban, and rural counties. I can tell you that the length of stay in our program is inversely proportional to the number of academic medical centers that exist in the geographical service area. The construct for health care delivery in this country has been built around the acute care hospital and my belief is that we will not be able to afford our current delivery model as we proceed into this 21st century. We are unprepared and cannot afford the coming age tsunami of the baby boomers.

In my brief remarks this morning, I will first frame the size of the problem by looking at the population shift with both national and regional data from southeast Michigan, then discuss the major financial and workforce resource implications that we are totally unprepared for, and finally, rather than call in Jack Kevorkian, I will suggest two major strategic approaches that will help prepare us for this uncharted future. National Trends Census trends in the United States indicate an increase in the total population as well as the median and mean ages of the population over the next 50 years.

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