Healthcare spending in late life is not wasteful, predictive model shows

End-of-life health care spending in the United States is not wasteful, a new study says; many recipients of such expenditures aren't, in fact, certain to die, as the thinking goes. Rather, they represent a pool of sicker individuals whose odds are harder to predict. The findings contradict a common view that in America, large amounts of healthcare expenditures are wastefully used on those who surely will die, a view perpetuated by frequent reference in the press to the fact, say the authors, that one quarter of Medicare spending occurs in the last 12 months of life. According to Liran Einav et al., interpretations of end-of-life health spending as wasteful hinge upon a presumed and implicit understanding of who will die when – but death is often unexpected and notoriously unpredictable. The authors reassess this point of view by using a predictive model of annual mortality risk, built using detailed Medicare claims and machine learning techniques, to analyze how spending is distributed not just on those who end up dying, but also those expected to die. They find that while the U.S. spends a lot on people in their last year of life, very little of the total, less than 5%, is used on those with a mortality risk higher than 50%, nearly half of whom (45%) survive the year. Additionally, adjusting for the fact that more is spent on the sick, both on those who die and those who recover, 30 to 50% of the spending on the dead can be eliminated. Their results suggest a reinterpretation of the idea of so-called "end-of-life" spending; focusing on it as has been done does not improve the community's ability to identify wasteful spending. Instead, the focus should shift to identifying the impacts of specific interventions and procedures on survival rates and on the quality of life for the very sick.


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