Abstract
Background: De-institutionalization of health care services provided to terminally ill cancer patients is a cost-effective strategy that underpins health care reforms in Canada. The objective of this study therefore is to evaluate the economic implications associated with Canadian innovations in the delivery of palliative care services. Methods: We identified 16 282 adults who died of cancer between 1993 and 2000 in two Canadian cities with newly introduced palliative care programs. Linkage of administrative databases was used to measure healthcare resource utilization. We sought to describe the utilization of palliative care services and its consequences for overall health care system costs. Results: Use of palliative services increased from 45 to 81% of cancer patients during the study period. Identifiable public health care services cost $28 093Cdn/patient (19 033US$, 11 508GB£, 17 778t) for terminally ill cancer patients in their last year of life. Acute care accounted for two-thirds (67%) of these costs; physician (10%), residential hospice care (8%), nursing homes (6%), home care (6%) and prescription medications (3%) comprise the remainder. Increased costs associated with the introduction of palliative care programs were offset by cost savings realized when terminally ill cancer patients spent less time in hospital. Palliative home care and residential hospice care accounted for the bulk of this substitution effect. Cost neutrality was observed from the public perspective. Discussion: These results demonstrate that the introduction of comprehensive and community-based palliative care services resulted in increased palliative care service delivery and cost neutrality, primarily achieved through a decreased use of acute care beds.