End-of-Life Spending

A Dartmouth Atlas study recently revealed that around 32% of total Medicare spending takes place during the last two years of life. What’s more, an estimated 20% to 30% of the Medicare expenses may have no meaningful impact. Bloomberg recently ran a story about a patient whose total end-of-life bills totaled $618,616 (almost two thirds coming from the patients last 24 hours), and no one is sure whether or not the treatments extended the patient’s life.

There are numerous reasons why patients and their families tend to spend so much during the patient’s last years, days, and hours. A list of some of the reasons behind this extensive end-of-life-spending are below:

1. No one wants to make the decision to end a life, and humans have a natural tendency to preserve life.
2. Some families and patients have unrealistic expectations of modern medicine.
3. In some situations, even politics can contribute to end-of-life-spending.
4. Many times family members feel guilty, especially when they have not seen the patient for years.
5. Current CPT coding allows practitioners to receive a higher payment when they order a test or prescribe a payment, so practitioners have an incentive to continue ordering tests and enlarging the patient’s bill.
6. Doctors and hospitals do not what to become involved in a malpractice suit due to the denial of treatment. This is especially the case when the patient has no living will or if there if family conflict.

See Robert Varipapa, Why Do We Lavish So Many Resources on End of Life Rather Than Enhancing the Young and Working-Age?, Forbes, Nov. 30, 2011.

Special thanks to Jim Hillhouse (WealthCounsel) for bringing this article to my attention.