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Background  Economic research on hospital palliative care faces major challenges. Observational studies using routine data encounter difficulties because treatment timing is not under investigator control and unobserved patient complexity is endemic. An individual’s predicted LOS at admission offers potential advantages in this context.    Methods  We conducted a retrospective cohort study on adults admitted to a large cancer center in the United States between 2009 and 2015. We defined a derivation sample to estimate predicted LOS using baseline factors ( N  = 16,425) and an analytic sample for our primary analyses ( N  = 2674) based on diagnosis of a terminal illness and high risk of hospital mortality. We modelled our treatment variable according to the timing of first palliative care interaction as a function of predicted LOS, and we employed predicted LOS as an additional covariate in regression as a proxy for complexity alongside diagnosis and comorbidity index. We evaluated models based on predictive accuracy in and out of sample, on Akaike and Bayesian Information Criteria, and precision of treatment effect estimate.    Results  Our approach using an additional covariate yielded major improvement in model accuracy: R 2  increased from 0.14 to 0.23, and model performance also improved on predictive accuracy and information criteria. Treatment effect estimates and conclusions were unaffected. Our approach with respect to treatment variable yielded no substantial improvements in model performance, but post hoc analyses show an association between treatment effect estimate and estimated LOS at baseline.    Conclusion  Allocation of scarce palliative care capacity and value-based reimbursement models should take into consideration when and for whom the intervention has the largest impact on treatment choices. An individual’s predicted LOS at baseline is useful in this context for accurately predicting costs, and potentially has further benefits in modelling treatment effects.    Supplementary Information  The online version contains supplementary material available at 10.1186/s13561-021-00336-w.

Using predicted length of stay to define treatment and model costs in hospitalized adults with serious illness: an evaluation of palliative care