The Effect of Advance Directives on End-of-Life Cost Experience

Purpose. This study assesses the impact of Advance Directives (ADs) on end-of-life costs, drawing on administrative data from a single health care organization located in Milwaukee, Wisconsin (Independent Care Health Plan, or iCare). Background. As part of ongoing Medicaid and Medicare rate reform efforts, greater use of ADs among plans and providers is being considered to better control costs and enhance health outcomes. Approach. Drawing on decedent-member descriptive and cost data, OLS regression is used to analyze the relationship between AD use and subsequent costs for a single health care plan. Results. The analysis does not provide evidence of a significant relationship between AD use and end-of-life costs when patient health is controlled for the sample. Conclusions. There was no evidence within the iCare data to support a relationship between the presence of ADs and lower end-of-life costs.