There is a point when the hospital does provide hospice care rather than try to restore a person to full health. Many, if not all, large hospitals have hospice nurses on staff specifically for that. End stage cancer, end stage COPD, end stage congestive heart failure, etc. are all things where hospice care may be encouraged. The key is finding the point where further efforts to restore the person to health are unlikely to be productive, so the best the hospital can hope for is keeping the patient as pain free and comfortable as possible.
Yes, hospice care can be done at home, but it still requires a hospice nurse to visit regularly. Depending on the family situation it may be possible, but it is hardly feasible for every situation. Is the surviving spouse strong enough to change an adult's diaper, or to support the dying spouse on the way to the bathroom? Can the surviving family care for an IV properly, or administer injected medication?
Not every patient over 85 is automatically a candidate for palliative care rather than normal care. If a patient is in good health, they should receive the same health care as anybody else. We have people living very healthy lives past 100 now, why should we tell people that they are expected to die at 85?