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Is hosice care for the elderly a scam?

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My 94 year old father, living in a nursing home for the past 16 months, has had an ongoing UTI.  He was treated with several rounds of antibiotics which, we were told, didn't completely cure the UTI.  That was about 4 weeks ago.  He had a couple bad days since where he had a fever, chills and seemed confused, but started doing much better. 
He decided after the last round of antibiotics that he no longer wanted anymore done from this point on.  No more meds...nothing.  We signed all the papers and accepted his decision.  Last week we were called because the nursing home staff said it's time to put hospice into place.  They felt he had less than 6 months to live.  My dad said that at 94 he doesn't think he has much more than that anyway...at least that's what he is hoping.  Anyway, we signed all the papers and now he is "in hospice care".  Doesn't have to leave his room, it's all done right there.  He is doing just fine.  Eats, drinks, sleeps, watches tv, visits with people, feels great and says he has no pain.  In the past week the "hospice staff" have visited him a few more times per day, and gave him Tylenol for his aching legs.  His legs have always ached.
My question is, am I nuts? 
Wasn't starting hospice care jumping the gun a bit?  I'm starting to get the vibe that since his health insurance covers the hospice care, they figured "why not"!  I've asked several times what exactly is the status of his health.  Does he still have a UTI?  Is it still in his blood?  And I've never gotten an answer.  All I get is "the nurse isn't available right now", "we'll have to get back to you on that one".  To me this is a perfect example of why our health care costs are so out of control. 

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