Some people believe they’re worth more dead than alive. When it comes to patient deaths in hospitals, that may indeed be the case. At least patients who die in hospitals cost more than inpatients who survive their stays.

According to the Agency for Healthcare Research and Quality (AHRQ), patient deaths in hospitals cost about $20 billion, based on AHRQ’s analysis of 765,651 hospital patient deaths in 2007.

The average cost of a patient death in hospital was $26,035 over the course of 8.8 days. The average cost of an inpatient stay in 2007 was $9,447 generated over the course of 4.5 days.

Thus, people dying in hospital had twice the length-of-stay of those who were discharged. But the money spent on Americans who died in hospital was more than twice the amount of inpatients, signalling that the intensity of care and resources deployed for the dying were greater.

The inpatient death rate declined with income; the poorest Americans are more likely to die in hospital than at home.

Health Populi’s Hot Points: As the U.S. works to bend the nation’s health care cost curve, a rational re-think about end-of-life care is long overdue. One in 3 patients who died in 2006 did so in the hospital.

While it is understandable that most deaths in hospital occur among Medicare enrollees — that is, among the oldest cohort of Americans — it is important to note that among Medicaid patients, the costs per hospital stay ending in death were $38,939 — over 5x the cost of inpatients discharged alive.

What’s wrong with this picture? Plenty. The AHRQ report dramatically illustrates several facets of health disparities in America: between the rich and the poor; between the insured and the uninsured.

Finally, technologies are available now and more emerging to help keep people at home where care can be delivered at a lower cost and higher quality (say, avoiding hospital infections among several quality indicators). Medicare payment reform must reallocate resources toward this other “medical home” — that is, the patient’s residence — and take advantage of remote monitoring and other telehealth applications that will ultimately conserve spending, bend that cost curve, and eliminate health disparities.