We are spending too much on end of life care…or are we?

A number of studies have suggested that we are spending too much on end of life care.  Consider this Kwok et al. (2011) study published in Lancet.

Many elderly people in the USA undergo surgery in the year before their death. The rate at which they undergo surgery varies substantially with age and region and might suggest discretion in health-care providers’ decisions to intervene surgically at the end of life.

And the Modern et al. (2012) study in Health Affairs makes a similar arguement:

Our study revealed a relatively high intensity of care in the last weeks of life. At the same time, there was more than a twofold variation within hospital groups with common features, such as cancer center designation and for-profit status…These findings raise questions about what factors may be contributing to this variation. They also suggest that best practices in end-of-life cancer care can be found in many settings and that efforts to improve the quality of end-of-life care should include every hospital category.

These analyses, however, are only useful if you can predict who will die.   If you know someone will die almost certainly, then you will want to limit the among of intensive medical interventions they receive not only to save money but also to allow the patient to avoid the pain and suffering of the operation.  If, however, some patients with similar symptoms could be saved by an expensive interventions and some not and if you cannot tell the difference between them, then it is more difficult to determine if spending is wasteful.

In fact, this is what a recent study in Science by Einav et al. (2018) find.

That one-quarter of Medicare spending in the United States occurs in the last year of life is commonly interpreted as waste. But this interpretation presumes knowledge of who will die and when. Here we analyze how spending is distributed by predicted mortality, based on a machine-learning model of annual mortality risk built using Medicare claims. Death is highly unpredictable. Less than 5% of spending is accounted for by individuals with predicted mortality above 50%. The simple fact that we spend more on the sick—both on those who recover and those who die—accounts for 30 to 50% of the concentration of spending on the dead. Our results suggest that spending on the ex post dead does not necessarily mean that we spend on the ex ante “hopeless.”

In addition, people do value additional life gained at the end of life.  As I wrote back in 2010 citing Philipson, Becker, Goldman and Murphy (2010):

Individuals at the end of their life place very high value on terminal medical care for the following reasons: (1) if resources have no value when dead, a self-interested individual would be willing to forego his entire wealth to extend his life, (2) the preservation of hope raises the value of life…(3) the social value of terminal care is often greater than the private value…[as] adult children (hopefully) places a high value on extending the life of their elderly parents, [and] (4) the value of terminal care may be the same regardless of a patient’s quality of life…QALY estimates of the value of life underestimate the utility the elderly receive from being alive, even in a very frail state.

In short, the assumption saying that end-of-life care is too high may not be right after all.

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