The Wall Street Journal’s David Wessel, in an Oct. 4 article, puts it this way: Yes, the US spends a lot of money on people in the last year of their life, but no, finding a socially acceptable way to stop doing that won’t slow health-care spending.
According to Wessel, who cites the Centers for Medicare and Medicaid Services, about 25% of all Medicare spending is done in the last year of life.
That’s a lot of money (about $125 billion a year) spent on the 2.5 million people – about 5% of Medicare beneficiaries — who die every year.
But Wessel argues that it’s a mistake to extrapolate that data to the general population. After all, he says, more than 70% of everybody who dies is older than 65, and nearly all of those people are in Medicare. Estimates are that about 10% of health-care dollars are spent on the 1% of the population who die every year.
That’s not to downplay the increasing impact of seniors on national healthcare costs. The Pew Internet & American Life Project estimates that 7,000 to 10,000 Baby Boomers will turn 65 every day for the next 17 years. The Senior Care motif, which includes stocks of companies that focuses mainly on dialysis providers, medical devices and assisted living operators, is up 2.9% for the past month, compared with a 0.1% fall for the S&P 500.
For Wessel, a significant problem exists on defining end of life care – i.e., how can you tell the difference between what is care to extend or improve a life and useless care for a dying person?
In addition, Wessel argues that while good reasons exist to encourage people to share end-of-life wishes with doctors and family or to make it easier for people to die comfortably in hospice care rather than in intensive-care units, there’s no evidence it saves a lot of money.
Instead, Wessel says, it might pay – literally – to look at care of the chronically ill, which he says is a hugely growing part of the Medicare and overall healthcare tab. About 5% of the whole population has five or more chronic conditions (high blood pressure, diabetes, etc.) and they account for 21% of all healthcare spending.
Even more stark: 21% of Medicare beneficiaries have five or more chronic conditions and caring for them consumes 79% of Medicare spending. They see more doctors, they go to the hospital more – and they’re most likely to benefit from pre-emptive, preventive care.
Wessel is less than optimistic about the current system being able to provide coordinated and efficient healthcare, but it appears to be a better bet than trying to trim end-of-life care.
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