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The American Journal of Managed Care May 2014
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Survival and Cost-Effectiveness of Hospice Care for Metastatic Melanoma Patients
Jinhai Huo, PhD, MD, MPH; David R. Lairson, PhD; Xianglin L. Du, MD, PhD; Wenyaw Chan, PhD; Thomas A. Buchholz, MD; and B. Ashleigh Guadagnolo, MD, MPH
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Erica L. Stockbridge, MA; Lindsey M. Philpot, PhD, MPH; and José Pagán, PhD
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Clifford Bleustein, MD, MBA; David B. Rothschild, BS; Andrew Valen, MHA; Eduardas Valaitis, PhD; Laura Schweitzer, MS; and Raleigh Jones, MD
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Didem Minbay Bernard, PhD; Patrik Johansson, MD, MPH; and Zhengyi Fang, MS
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Dean F. Sittig, PhD; Joan S. Ash, PhD, MLS, MBA; and Hardeep Singh, MD, MPH
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Survival and Cost-Effectiveness of Hospice Care for Metastatic Melanoma Patients

Jinhai Huo, PhD, MD, MPH; David R. Lairson, PhD; Xianglin L. Du, MD, PhD; Wenyaw Chan, PhD; Thomas A. Buchholz, MD; and B. Ashleigh Guadagnolo, MD, MPH
Hospice care is associated with improved median survival time for the patients diagnosed with metastatic melanoma, accompanied by decreased end-of-life costs.

We analyzed the association of hospice use with survival and healthcare costs among patients diagnosed with metastatic melanoma.


We used the Surveillance, Epidemiology, and End Results (SEER)- Medicare-linked databases to identify patients 65 years or older with metastatic melanoma who died between 2000 and 2009. We analyzed claims data to ascertain cancer treatment utilization and costs. Survival, end-of-life costs, and incremental cost-effectiveness ratio were evaluated using propensity score methods. Costs were analyzed from the payer perspective in 2009 dollars.


Of 862 patients, 225 (26%) received no hospice care, 523 (61%) received 1 to 3 days of hospice care, and 114 (13%) received 4 or more days of hospice care. The median survival time was 6.1 months for patients with no hospice care, 6.5 months for patients enrolled in hospice for 1 to 3 days, and 10.2 months for patients enrolled for 4 or more days (P <.001). The hazard ratio for survival among patients with 4 or more days of hospice use was 0.66; 95% confidence interval, 0.54-0.81, P <.0001 in the propensity score–matched model. Patients with 4 or more days of hospice care incurred lower end-of-life costs than the comparison groups ($14,594 vs $22,647 for the 1-to-3-days hospice care, and $28,923 for patients with no hospice care; P <.0001).


Patients diagnosed with metastatic melanoma who enrolled in 4 or more days of hospice care had longer survival than those who had 1 to 3 days of hospice or no hospice care, and this longer overall survival was accompanied by lower end-of-life costs.

Am J Manag Care. 2014;20(5):366-373
  • Patients who enrolled in hospice for 4 or more days showed longer median survival than patients who did not use hospice care or who enrolled in hospice care for only 1 to 3 days after diagnosis with metastatic melanoma.

  • Among patients who were enrolled in 4 or more days of hospice care, the end-of-life costs decreased by $14,680 in the model with the original cohort, and by $9576 in the model with the propensity score–matched cohort.

  • The incremental cost was $29,426 per life-year gained for patients who received 4 or more days of hospice care.
The 5-year survival rate for patients with melanoma detected at the earliest stages is approximately 95%,1 but falls precipitously to 15% for patients diagnosed with metastatic disease.2 Melanoma also places a significant economic burden on society and patients.3 The estimated annual cost of melanoma care in the United States is $249 million and the average lifetime disease-associated cost for a patient from the time of diagnosis with melanoma until death is approximately $28,210.3 Furthermore, 40% of the annual cost is attributed to stage 4 melanoma, which includes only around 3% of melanoma patients.3

Since stage 4 melanoma is rarely curable, most medical treatment for these patients—including surgery, radiation therapy, chemotherapy, and biologic therapy—is prescribed with limited expectations for long-term survival, and often with palliative intent. Increasingly, hospice care has become an acceptable alternative for patients with metastatic cancer. Hospices provide the necessary care, pain management, and emotional support to provide a comfortable end-of-life experience. The use of hospice also likely results in a decrease in utilization of surgery, radiation therapy, and chemotherapy,4 thus likely leading to a decrease in medical costs, although this has not been studied among patients with metastatic melanoma. Other investigators have shown that hospice utilization does not result in shortened survival for other terminal illnesses such as advanced lung cancer and pancreatic cancer.5,6 However, no studies have examined whether survival is reduced when patients elect hospice care for metastatic melanoma. Our goal is to examine the associations of use of hospice care with survival and costs among patients with metastatic melanoma and to analyze the cost-effectiveness for different durations of hospice care in patients with this disease.


Data Source and Cohort Definition

We conducted this study using data from the National Cancer Institute’s Surveillance, Epidemiology, and End Results (SEER)-Medicare-linked databases. This database covers 17 geographic areas in the United States and encompasses approximately 28% of the US population.7 The SEER registries are linked to the Medicare claims databases, which are updated biennially and include 97% of US citizens 65 years and older.8 All available Medicare claims files were used to obtain information on treatments and costs of care. The Patient Entitlement and Diagnosis Summary File (PEDSF) contains 1 record per person linked via encrypted identifiers to a corresponding file in the SEER database and provides basic information on sociodemographic and tumor characteristics. All data were de-identified such that no protected health information could be linked to individual patients. The institutional review board from the University of Texas MD Anderson Cancer Center, Houston, Texas, and the University of Texas Health Science Center, Houston, Texas, exempted this study.

We identified patients 65 years and older who were diagnosed with pathologically confirmed malignant melanoma (stage 4) between January 1, 2000, and December 31, 2009. Patients were excluded if their death year and month in the SEER data set and Medicare data sets did not match, or if their cancer diagnosis came from either an autopsy or death certificate. Patients were excluded if they did not have continuous coverage through enrollment in Medicare Part A and Part B from the date of melanoma diagnosis until death or if they had health maintenance organization coverage during this time.

Dependent Variables

Overall survival was defined as the time from diagnosis of melanoma to the patient’s death due to the melanoma. The costs incurred in the last 3 months were used to estimate the incremental cost-effectiveness ratio, defined as cost per life-year gained.

Independent Variables

Independent variables in the analysis included age at diagnosis, sex, marital status, neighborhood income and education levels, geographic region, comorbidity score, and hospice density. Hospice density, defined as the number of hospice facilities available within each patient’s health service area, was obtained from the Area Resource File.9 The Charlson Comorbidity Index score was calculated from an algorithm developed by Klabunde and colleagues. 10,11 The use of hospice care was identified based on any hospice service date after the melanoma diagnosis date. Based on information relayed by hospice staff, Kris and colleagues concluded that 3 or fewer days was an insufficient amount of time for patients and hospice staff to fully communicate on the planning and implementation of hospice care, so we adopted this common classification approach whereby the number of hospice service days was categorized into 3 groups: no hospice care, 1 to 3 days of hospice care, and 4 or more days of hospice care.6,12

Statistical Analysis

We conducted a univariate analysis using χ² test. Multivariate analysis was performed with a standard of P <.05 to determine the significance of association of outcomes and variables. A Cox proportional hazards model controlling for potential explanatory variables was used to assess the relationship between hospice use and overall survival. All hazard ratios (HRs) were calculated with 2-sided P value and 95% confidence intervals (CIs). Survival rates were calculated from Kaplan-Meier estimation. Since all patients died within the observation window, no censored cases occurred. The generalized linear model with a gamma distribution was used for validating the outcome of the Cox model.

To minimize potential selection bias, we used propensity score–based 1:N match (1 case matched with N controls) in the survival and cost models. Since a 3-group propensity score–matching algorithm is not available, and survival for patients with no hospice care was similar to that of patients who used 1 to 3 days hospice, we combined these 2 groups into 0 to 3 days of hospice use and further matched with patients who used 4 or more days of hospice care by applying a propensity score–based 1:N match algorithm developed by Parsons.13 In this algorithm, all the demographic variables were included in the propensity score logistic model to generate the predicted probability that is used for matching. To maximize the sample size from a 5-matching scenario (1:N, N is 1 to 5), we used a 1:5 match-optimized cohort by using an 8-to-1-digit matching algorithm.13 In the matched cohort, a Cox proportional hazards model stratified by matched pair evaluated the associations between 4 or more days of hospice care or 0 to 3 days of hospice care and overall survival time in months.

To conduct the economic analysis, we divided the total cost of care after diagnosis into 3 phases based on the phase-of-care approach developed by Riley and colleagues.14 The majority of resources are typically consumed in the initial phase, when a patient’s disease is diagnosed and treated, and during the final (end-of-life) phase, when extensive efforts are employed to extend the patient’s life or to improve quality of life. Thus, the costs calculated from this method would follow a U-shaped pattern, with the highest costs on the 2 end points. In our study, the initial phase, which lasts an average of 3 months, was defined as the period during which medical intervention was implemented for advanced melanoma and might include the times of diagnosis, surgery, chemotherapy, and radiation therapy. The end-of-life phase is defined as the last 3 months immediately preceding death. The interim months of continuing care after the initial phase include surveillance and routine therapy costs.

We calculated the cost difference by comparing the total Medicare payments incurred by patients receiving 4 or more days of hospice care with those incurred by patients not receiving hospice care prior to death and those patients receiving 1 to 3 days of hospice care. The total cost of care for patients was calculated as the sum of reimbursements authorized by Medicare. Medicare claims reimbursements were adjusted for inflation to 2009 dollars using the Prospective Pricing Index for Part A claims and the Medicare Economic Index for Part B claims.15 Costs were adjusted for geographic variation using the geographic adjustment factor for Part A claims and the geographic practice cost index for Part B claims.15 These adjusting factors are acquired from direct communication with the National Cancer Institute’s Health Services and Economics Branch of the Applied Research Program. These indices were matched via the state and county codes for each patient and then multiplied with the costs from each file in the database. Since the median survival time for metastatic melanoma patients is less than 1 year, discounting was not applied to cost or survival time. Costs were further analyzed in a generalized linear model with a gamma distribution controlling for patient demographic and clinical covariates.16

The cost-effectiveness analysis utilized the mean of costs from all 3 phases of cancer care and survival. The incremental cost-effectiveness ratio (ICER) = (C1 - C2) / (E1 - E2) = ΔC / ΔE, where Cx equals cost of group x and Ex is effectiveness at group x, with the quotient representing cost per life-year gained. In the cost-effectiveness model, a bootstrap simulation analysis was implemented to assess the statistical uncertainty. We performed an analysis with 1000 bootstrap estimates of the ICER in both the original cohort and the 1:5 matched cohort. Statistical analysis was conducted using SAS version 9.3 (SAS Institute, Inc, Cary, North Carolina).


Patient and Tumor Characteristics

Characteristics of the entire cohort and matched cohort as well as univariate analysis of hospice use and patient characteristics are shown in Table 1. Of 862 patients, 225 (26%) had no hospice care after diagnosis, 523 (61%) had 1 to 3 days of hospice care, and 114 (13%) had 4 or more days of hospice care. All covariates were evenly balanced in the matched cohort.

Overall Survival

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