Time to death and the forecasting of macro-level health care expenditures: Some further considerations

Baal, Pieter van; Wong, Albert

doi:10.1016/j.jhealeco.2012.08.003

Cited by 35 publications

(24 citation statements)

References 34 publications

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“…In contrast a Dutch study examining macro level data suggests that accounting for PTD may not simply reduce future projections of HCE due to growth from other unidentified causes which were not included in previous modelling attempts [14].…”

Section: Discussionmentioning

confidence: 89%

“…Other studies have reported that ageing is more important [12], that proximity to death is minor in magnitude [12], or indeed a proxy for disability [13]. Van Baal and Wong [14] suggest that PTD may be a better predictor of expenditure than age as it includes both age and mortality risk. There remains general consensus on a PTD effect, what is contentious is the magnitude.…”

Section: Introductionmentioning

confidence: 98%

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The Importance of Proximity to Death in Modelling Community Medication Expenditures for Older People: Evidence From New Zealand

Moore

Bennett

Normand

2014

Appl Health Econ Health Policy

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BackgroundConcerns about the long term sustainability of health care expenditures and in particular prescribing expenditures has become an important policy issue in most developed countries. Previous studies suggest that proximity to death (PTD) has a significant effect on total health care expenditures, with its exclusion leading to an overestimation of likely growth. There are limited studies of pharmaceutical expenditures taking PTD into account. ObjectiveThis paper presents an empirical analysis of public medication expenditure on older individuals in New Zealand (NZ). The aim of the study is to examine the individual effects of age and proximity to death (PTD) using individual level data. MethodsThis study uses individual level dispensing data from 2008/2009 covering the whole population of medication users age 70 years or more and resident in New Zealand. A case control methodology is used to examine individual cost and medication use for a 12 month period for decedents (cases) and survivors (controls). A random effects two part model, with a Probit and Generalized Linear Model (GLM) is used to explore the effect of age and proximity to death on expenditures. ResultsThe impact of proximity to death on prescription expenditure is not as dramatic as studies reporting on Acute and/or long term care. The 12 month decedent to survivor mean expenditure ratio was 1.95, 2 2.09 for males and 1.82 for females. The additional cost of dying in terms of prescription drugs decreases with age, with those who die at 90 years of age or older consuming fewer drugs on average and having a lower mean expenditure than those who died in their 70s and 80s. The following variables were found to have a decreasing effect on the mean monthly prescription expenditures, a reduction of 2.2% for each additional year of age, 4.2% being in the Mãori ethnic group and 7.8% for Pacific Islanders. Increases in monthly expenditure were associated with being a decedent 32.1%-62.6% (depending on month), being of Asian origin 16.2% or a male 12.6%. ConclusionsGiven the variance reported between survivors and decedents, to improve accuracy future projections should include PTD in their models. Policies targeted at reducing expenditures should not focus on age but on ensuring appropriate and cost effective prescribing especially towards the end of life. Key points for decision makers: Despite prescription medications being the most common medical intervention there is limited evidence on how proximity to death and ageing affect prescribing expenditures for older people. In terms of expenditure on prescription medications, proximity to death would appear to be a more important driver than ageing and should therefore be considered in any future expenditure projections.

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Section: Discussionmentioning

confidence: 89%

Section: Introductionmentioning

confidence: 98%

The Importance of Proximity to Death in Modelling Community Medication Expenditures for Older People: Evidence From New Zealand

Moore

Bennett

Normand

2014

Appl Health Econ Health Policy

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“…To what extent this results in an overestimate or underestimate of the threshold is difficult to assess. Second, we have not been able to deal with-or test for-potential reverse causality, which may stem from the fact that most spending occurs in the last years before death, implying that (conditional on age) lower mortality rates should be accompanied by lower health care spending (van Baal & Wong, 2012). Hence, reverse causality would mean that our estimate of the impact of health spending on mortality is an underestimate and the k-threshold estimate is an overestimate.…”

Section: Figurementioning

confidence: 97%

A cost‐effectiveness threshold based on the marginal returns of cardiovascular hospital spending

et al. 2018

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Traditionally, threshold levels of cost‐effectiveness have been derived from willingness‐to‐pay studies, indicating the consumption value of health ( v‐ thresholds). However, it has been argued that v‐ thresholds need to be supplemented by so‐called k‐ thresholds, which are based on the marginal returns to health care. The objective of this research is to estimate a k‐ threshold based on the marginal returns to cardiovascular disease (CVD) hospital care in the Netherlands. To estimate a k ‐threshold for hospital care on CVD, we proceed in two steps: First, we estimate the impact of hospital spending on mortality using a Bayesian regression modelling framework, using data on CVD mortality and CVD hospital spending by age and gender for the period 1994–2010. Second, we use life tables in combination with quality of life data to convert these estimates into a k ‐threshold expressed in euros per quality‐adjusted life year gained. Our base case estimate resulted in an estimate of 41,000 per quality‐adjusted life year gained. In our sensitivity analyses, we illustrated how the incorporation of prior evidence into the estimation pushes estimates downwards. We conclude that our base case estimate of the k ‐threshold may serve as a benchmark value for decision making in the Netherlands as well as for future research regarding k‐ thresholds.

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“…These estimates are roughly in line with findings from previous studies. For example, Riley and Lubitz [24] found that the 5 % of decedents account for about 25 % of total Medicare expenditures, which implies that decedents spend about six times as much as survivors; van Baal and Wong [32] estimate a factor even as high as 20.…”

Section: Main Specificationmentioning

confidence: 99%

Health Care Expenditures and Longevity: Is There a Eubie Blake Effect?

2012

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It is still an open question whether increasing life expectancy as such causes higher health care expenditures (HCE) in a population. According to the ''red herring'' hypothesis, the positive correlation between age and HCE is exclusively due to the fact that mortality rises with age and a large share of HCE is caused by proximity to death. As a consequence, rising longevity through falling mortality rates may even reduce HCE. However, a weakness of many previous empirical studies is that they use cross-sectional evidence to make inferences on a development over time. In this paper, we analyse the impact of rising longevity on the trend of HCE over time by using data from a pseudo-panel of German sickness fund members over the period 1997 2009. Using (dynamic) panel data models, we find that age, mortality and 5-year survival rates each have a positive impact on per-capita HCE. Our explanation for the last finding is that physicians treat patients more aggressively if the results of these treatments pay off over a longer time span, which we call ''Eubie Blake effect''. A simulation on the basis of an official population forecast for Germany is used to isolate the effect of demographic ageing on real per-capita HCE over the coming decades. We find that, while falling mortality rates as such lower HCE, this effect is more than compensated by an increase in remaining life expectancy so that the net effect of ageing on HCE over time is clearly positive.

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Time to death and the forecasting of macro-level health care expenditures: Some further considerations

Cited by 35 publications

References 34 publications

The Importance of Proximity to Death in Modelling Community Medication Expenditures for Older People: Evidence From New Zealand

The Importance of Proximity to Death in Modelling Community Medication Expenditures for Older People: Evidence From New Zealand

A cost‐effectiveness threshold based on the marginal returns of cardiovascular hospital spending

Health Care Expenditures and Longevity: Is There a Eubie Blake Effect?

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