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Context: Although the number of studies on the economic impact of palliative care (PC) is growing, the great majority report costs from North America.Objectives: We aimed to provide a comprehensive overview of PC hospital cost components from the perspective of a European mixed funded health care system by identifying cost drivers of PC and quantifying their effect on hospital costs compared to usual care (UC).Methods: We performed a retrospective, observational analysis examining cost data from the last hospitalization of patients who died at a large academic hospital in Switzerland comparing patients receiving PC vs. UC.Results: Total hospital costs were similar in PC and UC with a mean difference of CHF -2777 [95% CI -12,713 to 8506, P = 0.60]. Average costs per day decreased by CHF -3224 [95% CI -3811 to -2631, P < 0.001] for PC patients with significant reduction of costs for diagnostic intervention and medication. Higher cost components for PC patients were catering, room, nursing, social counseling, and nonmedical therapists. In sensitivity analyses, when we restricted PC exposure to three days from admission, total costs and average costs per day were significantly lower for PC.Conclusion: Studies measuring the impact of PC on hospital costs should analyze various cost components beyond total costs to understand wanted and potentially unwanted cost-reducing effects. An international definition of a set of cost components, specific for cost-impact PC studies, may help avoid superficial and potentially dangerous cost discussions. [ABSTRACT FROM AUTHOR]