Home care is generally cheaper than hospital care, and for more than a decade, government programs such as Medicare and Medicaid have worked to create incentives for hospitals to switch to less-expensive treatment. Recently, under the Affordable Care Act, Medicare has begun to penalize hospitals when, under certain conditions, patients are readmitted within 30 days after discharge.

Some insurers, including Medicare, pay for house calls by doctors and nurses specializing in advanced care. In cases where insurance does not cover this type of palliative care, hospitals are financing it themselves, sometimes with grants.

Dr. Steven Pantilat, an internal medicine physician who leads the palliative care program at the University of California, San Francisco, says his hospital subsidizes some home care because “there is sufficient improvement in quality and costs to make the investment a good idea all around.”

A 2007 study by Dr. Richard Brumley and colleagues, found that palliative care patients who received in-home, interdisciplinary care were less likely to visit the emergency room or be admitted to the hospital than those receiving more-standard home care, resulting in lower costs.