JOURNAL OF PALLIATIVE MEDICINE

Volume 3, Number 2, 2000

Mary Ann Liebert, Inc.

The Impact of a Regional Palliative Care Program on the

Cost of Palliative Care Delivery

EDUARDO BRUERA, M.D.,1 CATHERINE M. NEUMANN, MS.c., 2

BRUNO GAGNON, M.D., 2 CARLEEN BRENNEIS, R.N., M.H.S.A., 2 HUE QUAN, B.C.O.M.,2
and JOHN HANSON, M.Sc.2

ABSTRACT

In July 1995 the Edmonton Regional Palliative Care Program (ERPCP) was established in the
City of Edmonton to increase the access of patients with terminal cancer to palliative care ser-
vices, decrease the number of cancer deaths in acute-care facilities, and increase the partici-
pation of family physicians in the care of terminally ill patients. The objective of this retro-
spective study was to determine the cost of implementation of the ERPCP and savings in
acute-care facility costs after its implementation. We did this by comparing the cost of care
for patients during 199293 (prior to the ERPCP) and 199697 (with the ERPCP). The main
outcome measures were the cost of care and the total hospital stay in days for all patients dur-
ing their last acute-care hospital admission. The increased funding for the ERPCP was offset
by a significant decrease in the overall cost of palliative care in the acute-care facilities. There
was a substantial decrease in the palliative care costs in acute facilities from $11,963,846 in
1992/93 to $3,449,055 in 1996/97. This can be explained by the significant decrease in the num-
ber of palliative care patient days in acute-care facilities from 22,608 during 1992/93 to 6085
during 1996/97. Physician billings were slightly higher for 1996 as compared to 1992. In 1992,
90% (195,117/427,780) of the billings were made by the specialists (internists, surgeons, and
other specialists), while in 1996/97 67% (359,869/537,342) of the payments were made to pri-
mary care practitioners (p , 0.0001). Overall, there were estimated saving of $1,650,689 for pal-
liative care costs in 1996/97 as compared to 1992/93. Our results suggest that the establishment
of an integrated palliative care program reduced the cost of care. Prospective cost measure-
ment studies are required.

INTRODUCTION deaths in acute-care facilities, increase the partic-

ipation of the family physicians in the care of the

I NJ ULY 1995, TH E E DM O N TO N R EG IO N A L P A LLIA -

C A RE P RO GRA M (ERPCP) was established in
TIV E
the City of Edmonton and the Capital Health Re-
gion. The purpose of this program was to increase
the access of patients with terminal cancer to pal-
liative care services, to decrease the number of
terminally ill, and to provide these physicians
with adequate support. The program was de-
signed taking into consideration the limited re-
sources available to most health-care regions in
Canada.
Most cancer patients die in acute care facilities

1
Department of Symptom Control and Palliative Care, University of Texas, M.D. Anderson Cancer Center, Hous-
ton, Texas.
2
Edmonton Regional Palliative Care Program, Division of Palliative Care Medicine, Cross Cancer Institute, Uni-
versity of Alberta, Edmonton, AB, Canada.

181
182
after medium- to long-term admissions.13 This
results in both increased cost of care and inap-
propriate care because the staff in these in-
stitutions are not trained in the appropriate
management of the physical and psychosocial
complications of terminal cancer.37 The hypoth-
esis behind this program was that a successful
transfer of these patients to hospice settings and
the home community would not only improve
the quality of their care, but also potentially save
health-care resources.
The purpose of this paper is to report on the
cost of implementation of this program and sav-
ings in acute-care facility costs after its imple-
mentation.
PATIENTS AND METHODS
This retrospective study compared the cost of
acute care treatment during the last admission of
cancer patients during the years 1992/93 (before
the establishment of the ERPCP) with those ob-
served during 1996/97 (the second year of oper-
ation of the ERPCP). Data from 1992/93 were col-
lected during the process of planning the ERPCP
and were used as a baseline for future compar-
isons. Data from 1996/97 were chosen because
during the first year of operation of the ERCPC
not all aspects of the program had been fully im-
plemented. Data for later years is not available as
yet.
The Edmonton Regional Palliative Care Program
The ERPCP consisted of previously existing
and newly established services, some of which in-
volved the upgrading of previous services. The
complete details of the establishment of the ER-
PCP, its effects on the access of patients to pal-
liative care, and the place of death, have been de-
scribed in an earlier publication.8 The previously
existing services included a 14-bed Tertiary Pal-
liative Care unit, a physician/nurse consult team
at one of the tertiary hospitals, and a once-a-week
Tertiary Multidisciplinary Palliative Care Clinic
in the local cancer center. These two programs
were maintained at the same level of funding. The
newly established services included:
1. Three palliative hospices (palliative continu-
ing care units) were established in three con-
tinuing care hospitals with a total of 57 beds.
BRUERA ET AL.
2. Four full-time salaried teams of a consultant
physician and a nurse were established to pro-
vide consultations for palliative care patients
at home and in the three hospices. One addi-
tional team was added in the one tertiary hos-
pital that did not yet have a palliative care con-
sult team.
3. An increased fee for the delivery of palliative
care at home or in hospices was established for
family physicians. For an example, $24.72 for
every 15-minute period of care replaced a pre-
vious fee of a total of $22 for the first visit and
$18 for follow-up visits. The new fee items in-
cluded patient and family counselling and
participation in team meetings where the pa-
tients care was discussed.
4. Increased funding was allocated to the Re-
gional Home Care Program for the delivery of
24-hour palliative care at home.
5. An administrative system was established to
coordinate the ERPCP.
Data collection
For 1992/93 and 1996/97 the following data
was collected:
Number of patient days during the last hospitalization
prior to death due to cancer. This data was collected
from the Evaluation, Information, and Research
Office of Capital Health Authority and the can-
cer center. The Capital Health Authority is the
only source of average length of stay data for pa-
tients admitted to all acute-care facilities.
Cost of Care. The Department of Finance of the
Capital Health Authority estimated the overall
cost of acute care during the terminal admission
in a medical bed at a conservative rate of $500 per
day. The per diem rate for the cancer center was
obtained through their administration office and
was estimated to be $337. No adjustment for in-
flation was made between 1992/93 and 1996/97
because the budget for the cancer center and the
Capital Health Authority did not undergo sig-
nificant adjustments.
Cost of the Regional Palliative Care Program. The
costs for the administrative office of the ERPCP,
and the five physician/nurse consult teams were
determined by the Department of Finance, Capi-
tal Health Authority. The Department of Finance
of the Capital Health Authority based the cost for
IMPACT OF A REGIONAL PALLIATIVE CARE PROGRAM 183

the palliative hospices on a per diem rate of
$161.70. The number of beds multiplied the per
diem rate for 365 days, because funding was
given independ ently of occupancy. This figure
represents the regular budgeted cost of a con-
tinuing care bed in the Edmonton region, plus
the additional resources allocated to the hospice
for private rooms, increased nursing and phar-
macy budget, multidisciplinary teams, and a
unit manager. Home care funding was deter-
mined globally, and therefore only the lum p
sum given for increased palliative home care
services is reported. This number is likely much
higher than the actual amount of money used
to fund the increased palliative home care ser-
vices. Resources existing before the establish-
ment of the ERPCP were maintained and
were not included in this cost calculation, as
these costs did not change. These include the
14-bed Tertiary Palliative Care Unit, the physi-
cian/nurse consult team at the tertiary acute
hospital, and the Pain and Sym ptom Clinic at
the cancer center.
Medical costs. The costs for physician billings were
determined from the actual number of acute care
patient deaths for 1992/3 and 1996/7(Capital
Health Authority). The average length of stay was
used to determine the number of patient days for
admission. The proportion of specialists versus
family physicians was estimated. Actual 1992 and
1996 cost codes were used for each year. Rates for
1996 were lower than 1992 due to the approxi-
mately 5% decrease in cost codes that occurred in
Alberta, during the process of regionalization.
For 1996/97, actual billings into the new pallia-
tive care codes (beginning in 1994) were available
to identify palliative care visits in community set-
tings, such as the home, office or hospice by spe-
cialists, and family physicians. These were in-
cluded in overall 1996/97 total billings. For
1992/93, palliative care codes did not exist. It is
not possible to determine palliative care billing in
the community during this time. Therefore the
portion of medical care delivered to palliative
care patients in the community is not included
for 1992/93.
Statistical analysis
Continuous variables were expressed as mean
( 6 S.D.). The difference in continuous variables
between 1992 and 1996 were analysed according
to analysis of variance (ANOVA). Although some
of the variables showed a skewed distribution
(right-tail), the distributions were smooth with no
major outliers. The differences in proportional
data were analysed using Chi-square tests. Data
were analysed using the SAS Program for Per-
sonal Computers.
RESULTS
Table 1 summarizes the changes in the number
of patient days of care in acute-care facilities dur-
ing the last hospitalization, and the resulting de-
crease in cost of care between 1992/93 and

T A BLE 1. L EN G TH OF STA Y OF L A ST H O SP ITA LIZ A TIO N B EF O R E D EA TH BY F ISC A L Y EA R FOR 1992/93 AND 1996/97

1992/93 1996/97 Ap > value

Total number of cancer deaths 1304 1279

Acute care hospital*
Total number of cancer deaths (%) 825 (63%) 403 (32% ) , 0.0001
Mean length of stay in days (6 SD) 27 6 16 15 6 7 , 0.0001
Total number of patient days 22,608 6,085 NA
Total cost $11,304,000 $3,042,500 NA
Cancer centre
Total number of cancer deaths (%) 130 (10%) 95 (7%) 0.02
Mean length of stay in days (6 SD) 15 6 21 9 6 10 , 0.005
Total number of patient days 1958 875 NA
Total cost $659,846 $294,875 NA
Grand total costs $11,963,846 $3,337,375 NA

*Capital Health Authority Evaluation, Information, and Research.

Cross Cancer Institute, Health Records (cancer center).

Comparison of 1992/93 vs. 1996/97.
SD: Standard deviation
NA: Nonapplicable
184 BRUERA ET AL.

1996/97. The decrease in number of patient days
in acute-care facilities was mostly due to the shift
in the site of death from acute-care to the pallia-
tive hospices and home.8 This data has been re-
ported in a prior publication in more detail.8
Table 2 reports the costs of palliative care in the
Edmonton region for 1992/93 and 1996/97. The
increased funding for the RPCP was offset by the
significant decrease in the overall cost of pallia-
tive care in the acute care facilities. Palliative care
costs, for the last admission before death, in acute
facilities decreased from $11,963,846 in 1992/93
to $3,449,055 in 1996/97.
Physician billings (Table 2) were slightly higher
for 1996 as compared to 1992. In 1992, 90%
(195,117/427,780) of the billings were made by
the specialists, internists, surgeons and other spe-
cialists, while in 1996/97 67% (359,869/537,342)
of the payments were made to primary care prac-
titioners (p , 0.0001). This shift in care was seen
in the community billings to palliative care codes
for 1996/97 (specialists, 14%; family physicians
86%).
Overall, there was a substantial saving of
$1,650,689 for palliative care costs in 1996/97 as
compared to 1992/93.
DISCUSSION
The main purpose of this retrospective study
was to describe the changes in the cost of care af-
ter the implementation of the Edmonton Regional
Palliative Care Program. Overall, our results sug-
gest that from the perspective of the health-care
system, the establishment of regional palliative
care programs can result in substantial savings
even when conservative estimates of daily costs
for acute care facilities are used (e.g., $500 per diem
for acute care hospitals and $337 per diem for the
cancer center). Therefore, the initial cost associ-
ated with implementation of these programs is
more than justified by the decrease in utilization
of acute-care beds. This shift of financial re-
sources to the community not only results in pa-
tients accessing palliative care in larger numbers,8
but also increases the participation of commu-
nity-based family physicians and nurses in the

T AB LE 2. C O STS OF P A LLIAT IV E C A R E FOR 1992/93 AND 1996/97

1992/93 1996/97

Acute care facilities* $11,963,846 (10%) $13,337,375 (10% )

ERPCP
Palliative hospice care $13,364,168 (10% )
ERPCP and consult teams $11,826,003 (10% )
Acute care referral consult team $11,130,000 (10% )
Home palliative care increased funding $12,546,000 (10% )
Primary care physician billings#,** $11,142,604 (10%) $11,362,451 (67% )
Specialist billings $11,385,117 (90%) $11,174,891 (33% )
Physician billings, total $11,427,731 (10%) $11,537,342 (10% )
Total costs $12,391,577 (10%) $10,740,888 (10% )
Savings $11,650,689 (10% )

*Based on the number of inpatient days multiplied by the per diem cost of $500 for the acute care hospitals (Finance
department of Capital Health Authority) and a per diem cost of $337 for the cancer center (Finance department of the
Cancer Center).

Based on the total cost for 57 beds at $161.70/ day for one year (Finance Alberta Health). This was not corrected
for occupancy, since funding was given independent of occupancy.

Sum of money for the ERPCP administration and the four ERPCP consult teams.

Increased annual costs of Palliative care consult team in acute care since the program began.

Based on the sum of money given for palliative home care.
#
For 1992/ 93 the proportion of family physician to specialist was estimated, as there were no palliative care codes
at this time.
**For 1996/ 97 the proportion of family physicians to specialists was calculated using the billings to the palliative
care code in the community and the estimated proportions in the acute care billings.

All costs are in Canadian dollars.

ERPCP: Edmonton Regional Palliative Care Program.
The funding for the Tertiary Palliative Care Unit, Tertiary Hospital Consult Team, and Pain and Symptom Clinic
at the cancer center was not included because no change in funding occurred in the implementation of the ERPCP.
IMPACT OF A REGIONAL PALLIATIVE CARE PROGRAM
regular care of terminally ill patients. This trans-
fer of expertise to community-based physicians
and nurses has the potential for an earlier appli-
cation of palliative interventions and for the ex-
tension of palliative modes of care to patients
with diseases other than cancer who are regularly
seen by community-based physicians and
nurses.9 Our results are supported by a recent
randomized, controlled trial in which the estab-
lishment of a district coordinating service in the
United Kingdom resulted in significant decrease
in the cost of care. The decrease in cost of care
was mostly due to a reduction in the number of
inpatient days in acute-care hospitals.10
This study had a number of limitations:
1. Our economic evaluation was based on the
comparison of costs for two different health de-
livery programs for palliative care. As such, the
savings shown can only be interpreted as poten-
tial savings to the health-care system if these re-
sources are not further used to provide other
health services. For instance, an empty bed on a
staffed nursing unit does not provide savings per
se; savings in this scenario are only achieved by
bed closures. In our health region, the acute-care
hospital budget decreased between 1992 and
1996. However, because funding for acute care is
globally established for a region, it is impossible
to ascertain the actual impact of palliative care
savings on this global budget reduction.
2. The cost calculations are reported from the
perspective of the health-care system. The trans-
fer of patients from acute-care facilities, where pa-
tients receive all care free of cost, to hospices and
home results in a significant increase in the cost
of care for those patients and their families. This
includes a per diem cost of $16 (Canadian) per day
for patients admitted to hospices, and the cost of
medications, transportation, and other living ex-
penses for patients at home. In addition, the pa-
tients main caregiver may need to decrease or
abandon their level of employment to assist pa-
tients. This transfer of the cost of care is difficult
to calculate,11 and is beyond the scope of this
study.12,13 Future studies should attempt to ad-
dress this issue. A proportion of the savings made
by allowing patients to receive care in the com-
munity could be used to offset some of these costs
for patients and families.
3. Our data for the acute care facilities only de-
scribe the utilization during the patients last ad-
mission resulting in death. Unfortunately, it was
impossible for us to obtain data regarding previ-
185
ous admissions during the last year of life. How-
ever, the increase in resources that made it pos-
sible for patients to receive care until death in
other settings is likely to have been as effective in
decreasing the length of stay of previous hospi-
talizations. This issue needs to be addressed in
future research.
Our results regarding savings can only be con-
sidered estimates because we did not measure
projectively all costs involved in the care of these
patients. Such studies should be conducted in the
future to better assist different health-care sys-
tems in the planning of palliative programs.
The main predictor of access to care in the com-
munity is the financial status of the family.1,14 Older
patients, females, and some ethnic minorities are
less likely to access home death.15 Therefore the po-
tential for transfer of care in different regions may
be easier in communities with wealthier and
younger individuals within a certain country or
city. Patients with lower family support and de-
creased performance status are more costly to the
home care system.16 Therefore, there might be lim-
itations to the potential savings associated with
community care for some patient populations, and
these should be addressed in future research.
During the next 20 years, Canada and most de-
veloping countries face a major increase in the
number of cancer deaths.17 This is likely to have
major financial impact on patients and families,
as well as on the healthcare systems of devel-
oped 18 and developing countries.18 Our prelimi-
nary results suggest that the establishment of re-
gional initiatives that coordinate inpatient and
outpatient services is capable of both increasing
access and reducing overall cost of care from the
perspective of the health-care system. More re-
search is necessary to confirm whether these re-
sults can be reproduced and to better character-
ize the impact of these changes on the cost of care
for patients and families.
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Address reprint requests to:
Dr. Eduardo Bruera, Chair
Department of Symptom Control and Palliative
Care (Box 8)
University of Texas
M.D. Anderson Cancer Center
1515 Holcombe Boulevard
Houston, TX 77030
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