By Austin Frakt
The New York Times, December 24, 2018
One of the original justifications for Medicare — which kicks in at age 65 — is that older people have much higher health care needs and expenses.
But there are a few common misunderstandings about health costs when people are older, including the idea that money can easily be saved by reducing wasteful end-of-life spending.
Total health care spending for Americans 65 and older is about $15,000 per year, on average, nearly three times that of working-age Americans.
A widely held view is that much spending is wasted on “heroic” measures taken at the end of life. Are all the resources devoted to Medicare and Medicaid really necessary?
First, let’s get one misunderstanding out of the way. The proportion of health spending at the end of life in the United States is lower than in many other wealthy countries.
Still, it’s a tempting area to look for savings. Only 5 percent of Medicare beneficiaries die each year, but 25 percent of all Medicare spending is on individuals within one year of death. However, the big challenge in reducing end-of-life spending, highlighted by a recent study in Science, is that it is hard to know which patients are in their final year.
The study used all the data available from Medicare records to make predictions: For each beneficiary, it assigned a probability of death within a year. Of those with the very highest probability of dying — the top 1 percent — fewer than half actually died.
“This shows that it’s just very hard to know in advance who will die soon with much certainty,” said Amy Finkelstein, an M.I.T. economist and an author of the study. “That makes it infeasible to make a big dent in health care spending by cutting spending on patients who are almost certain to die soon.”
“There absolutely is waste in the system,” said Ashish Jha, director of the Harvard Global Health Institute. But, he argues, waste is present throughout the life span, not just at the end of life: “We have confused that spending as end-of-life spending is somehow wasteful. But that’s not right because we are terrible at predicting who is going to die.”
Of course, beyond any statistical analysis, there are actual people involved, and wrenching individual decisions that need to be made.
“We should do all we can to push waste out of the system,” Dr. Jha said. “But spending more money on people who are suffering from an illness is appropriate, even if they die.”
Austin Frakt is director of the Partnered Evidence-Based Policy Resource Center at the V.A. Boston Healthcare System; associate professor with Boston University’s School of Public Health; and adjunct associate professor with the Harvard T.H. Chan School of Public Health. He blogs at The Incidental Economist.
NYT Reader Comment:
By Don McCanne, M.D.
I am a retired physician who writes a daily commentary on health policy (PNHP, Quote of the Day), believing that everyone should have affordable access to beneficial health care services when needed (i.e., I support Single Payer Medicare for All). I am also an octogenarian undergoing an evaluation for a medical problem that may well have a guarded prognosis. Believe me, I am very tuned in to this article on late-life care written by one of my favorite health policy analysts, Austin Frakt.
Should an old man like me have a workup for a condition for which there may be no beneficial intervention (though that is uncertain because of the lack of a definitive diagnosis at this point)? Can society afford to fund such care? Well, there is extensive literature that indicates that we can, in fact, afford to fund essentially all truly beneficial health care services for everyone as long as those services are priced reasonably. The line we should not cross is when diagnostic and therapeutic health care interventions become futile, but then that is precisely why we have palliative/hospice care.
The goals of health care should be to prevent premature death when possible, and to maintain quality of life as best we can while we are here. Studies have confirmed that such care would be affordable for society with a well designed, improved version of Medicare that covered everyone – a system that’s efficient, effective and equitable – a system that places the patient first.
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