Bleg: Terminal Health Care Spending
By Arnold Kling
There are studies that reportedly show that a large share of health care spending comes in the last year of life. For example, this abstract gives a figure of 22 percent of total health care spending. (UPDATE: looking at the study more carefully–I found it here–it says that 22 percent of spending of people 65 and older is on the last year of life.
I am having a hard time reconciling this figure with other considerations. For example, multiply the dollar amount spent in the last year (which, according to the same study, is less than $40,000) by the number of annual deaths, which is less than 2.5 million. That would imply less than $100 billion a year spent on the terminally ill, which is nowhere near 22 percent of total health care spending.
Another example is the data on MEPSnet from the Medical Expenditure Panel Survey. It does not show anywhere near the concentration of medical expenses that would be needed to have 2.5 million people account for 22 percent of spending. In the MEPS data, the top 4.5 million spenders among those over age 65 account for less than 20 percent of total spending.
What is the real story about health care spending in the last year of life? If you have an informed view on this, email me at arnoldsk at us dot net, or leave a comment below.