University of Southern California: Advance Directives Associated With Lower Out-of-Pocket Hospital Costs

Patients with advance directives spent significantly less money on end-of-life hospital care than those without them, according to new research from the USC Leonard Davis School of Gerontology.

The study, published in the June issue of the Journal of Hospital Medicine, found that patients with advance directives were more likely to limit end-of-life care and suggests their preference for less aggressive care played a role in their lower out-of-pocket costs.

Advance directives are legal documents that lay out the health care treatments a person would want to receive or skip. They are associated with greater chances of meeting end-of-life wishes, lower health care costs, use of fewer health care services, and a lower chance of dying in a hospital.

This study is the first to focus on patient out-of-pocket hospital costs alone, which researchers theorized relate to the type of end-of-life choices, like aggressive versus comfort, that are specified in advance directives.

Among the findings:

Of those who completed advance directives, 90% expressed a desire to limit care or to be kept comfortable, and 79% indicated that they wanted to withhold treatment. Only 6% wanted to prolong life. Choosing to limit care was significantly associated with lower hospital out-of-pocket costs.
Among patients with the very highest out-of-pocket costs, those with advance directives spent around $100,000 less than those without them. On average, advance directives were associated with savings of $673 in out-of-pocket costs.
Advance directive completion seemed to have more effects for those who died at younger ages; savings were an average of $1,204 greater for those who died around age 50 as opposed to those in their 90s.
Timing mattered; those who completed advance directives more than three months before they died were spared as much as $2000 in out-of-pocket costs when compared to those who completed them closer to their deaths. Researchers say savings could be even greater for those with the highest out-of-pocket costs but those amounts were not shown in this paper.
Cancer patients with advance directives had the greatest magnitude of out-of-pocket spending reduction. They spent, on average, around $3000 less than cancer patients without advance directives.
Consistent with previous research, non-Hispanic whites had higher advance directive completion rates compared to non-Hispanic Blacks and Hispanics.
“The takeaway here is that you should complete an advance directive as early as possible,” said lead author Yujun Zhu, a doctoral student at the USC Leonard Davis School, noting that last-minute decisions can be high on emotion and short on thorough consideration, education, and discussion.

“Start when you are healthy and revisit your choices regularly,” he said. “You can change your mind but it is important to discuss and document your preferences.”

Researchers analyzed data from more than 9000 Health and Retirement Study participants who died between 2000 and 2014 and examined the association between their advance directive completion status and hospital out-of-pocket spending in their last two years of life. The model controlled for socioeconomic status, death-related characteristics and health insurance coverage.

Though Medicare has been covering advance care planning conversations since 2016, the study states that there is a growing call for transparency in treatment recommendations and in requirements for out-of-pocket costs to be discussed. Researchers say their findings point to the need for earlier and more frequent communication between patients and providers.

“Research shows that patients consider finances when making healthcare decisions. We hope our findings encourage more conversations between physicians and patients to help patients shape end-of-life decision-making,” said senior author Susan Enguídanos, associate professor of gerontology at the USC Leonard Davis School. “However, it is important for physicians to understand patient values prior to initiating these discussions.”