Increasing medical cost due to increasing number of terminally ill cancer patients is very important to be a national issue. Therefore, studies on effective cost reduction are being conducted actively throughout the world. An increase in medical cost means that treatment effect is lagging compared to medical cost. Medical cost includes all expenses used in medicine, and treatment effect is the effect from treating diseases. An analysis of studies in Korea and abroad in the past few years yielded two big issues. The first issue is the comparison between hospital hospice institution and home hospice institution. The second is the comparison between hospice institutions and non-hospice institutions. Many studies done on these two issues revealed that hospice treatment is more effective for the treatment of terminally ill cancer patients, compared with any other treatments. Especially, home hospice provides greater benefits from the economic standpoint. Various factors exist in increasing medical cost in terminally ill cancer patients. These factors in Korea, in short, are 'site of death, medical team, and alternative medicine'. Treatment plan for the terminally ill cancer patients through hospice and palliative care can be the way to solve this problem. On suggestion of this treatment plan, we believe that many cancer patients would rather live their remaining life at home rather than at hospital, So that un-necessary tests and treatments would be minimized, and no money would be wasted on alternative medicine that has not been proven scientifically. Acceptance of death as a natural process by patients and their families will eventually bring about a cost reduction in medicine.