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End-of-Life Health Costs

By August 1, 2017Commentary

Trying to figure out why health spending is high and grows rapidly in the US is difficult.  Spending near end-of-life is frequently fingered as a major cause, but a new analysis, using data from multiple countries, suggests that it may not be as big a contributor as previously believed.   (HA Article)   Prior research had estimated that around 12% to 13% of US health spending was incurred in the last year of life.  The authors used multiple data sources to update this estimate and to compare it to spending at end-of-life in other developed nations.  The basic finding was that end-of-life spending, measured both in the last 12 months of life and the last 3 years, was fairly consistent across various types of health systems.   Average per capita medical spending in the last 12 months is high, at about $80,000 for the United States, over $60,000 in Denmark and the Netherlands and over $50,000 in Germany.  The researchers had incomplete data on Canada, but hospital spending alone averaged over $60,000, indicating that total costs were as much or more than in the US.  Both Canada and Japan have higher last year of life spending on hospital care than the US does.  Hospital is the single biggest category of spending, with long-term care usually the next largest.  There is some indication in the results that hospital and long-term care use could substitute for each other, depending on the country.  The US actually had the lowest percent of total spending devoted to the last year of life, at 8.5%.  Taiwan was highest at 11.2%.  Denmark and Germany were also quite high.  The implications of the research are that the US is actually pretty efficient in how it deals with end-of-life care, not having people hospitalized as much as in other countries and that end-of-life spending in the US is not a huge target for slowing spending growth.


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