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Economic Evaluation of a Hospital-Based Palliative Care Program
Sarina R Isenberg1, Chunhua Lu1, John McQuade1
1Johns Hopkins Bloomberg School of Public Health; Johns Hopkins Health System; and Sidney Kimmel Comprehensive Cancer Center of Johns Hopkins Medical Institutions, Baltimore, MD.
Journal of Oncology Practice
|April 19, 2017
Summary
Palliative care units (PCUs) can be cost-saving for hospitals, especially when considering their impact on patient and caregiver quality-adjusted life years (QALYs). This analysis establishes cost-effectiveness thresholds for PCUs.
Area of Science:
- Health Economics
- Palliative Care
- Healthcare Management
Background:
- Palliative care units (PCUs) aim to improve patient and caregiver quality of life.
- Understanding the cost-effectiveness of PCUs is crucial for resource allocation and service expansion.
Purpose of the Study:
- To establish the costs of an inpatient palliative care unit (PCU).
- To conduct a threshold analysis to estimate the maximum possible costs for a PCU to be considered cost-effective.
Main Methods:
- A hospital perspective was used, analyzing administrative data from Johns Hopkins PCU (March 2013-March 2014).
- Quality-adjusted life years (QALYs) were estimated using existing literature.
- A threshold analysis was performed, incorporating a willingness-to-pay of $180,000 per QALY, considering variable costs, contribution margin, and PCU cost savings compared to usual care.
Main Results:
- The PCU incurred variable costs of $1,050,031 ($1,343/patient encounter/day).
- The contribution margin was $318,413 ($407/patient encounter/day), and savings compared to usual care were $353,645 ($452/patient encounter/day).
- The PCU could generate 3.11 QALYs; the threshold analysis indicated a maximum variable cost of $559,800 for cost-effectiveness.
Conclusions:
- While PCUs were not cost-effective based solely on variable costs, they were cost-saving when considering savings compared to usual care and the contribution margin.
- The findings support the expansion of PCUs, highlighting their benefits for patients, caregivers, and hospital finances.
- Further prospective research on the cost utility of PCUs is recommended.