Hospital Expenditure at the End-of-Life: A Time-to-Death Approach

Document Type: Original Article

Authors

1 Health Management and Economics Research Center, Iran University of Medical Sciences, Tehran, Iran

2 Department of Health Education and Promotion, School of Public Health, Tehran University of Medical Sciences, Tehran, Iran

3 Department of Demography, Social Science Faculty, Tehran University, Tehran, Iran

4 Department of Economic Sciences, School of Management and Economics, Tarbiat Modares University, Tehran, Iran

5 Department of Health Management and Economics, School of Public Health, Tehran University of Medical Sciences, Tehran, Iran

Abstract

Background
In recent years the use of time to death (TTD) variables in the modeling of individual health expenditures has been of interest to health economics researchers. The aim of this study was to investigate the effect of age and TTD on hospital inpatient expenditure (HIE).

 
Methods
We used a claims database from Iran Health Insurance Organization of Tehran city that includes considerable proportion of Tehran residents and contains information on insured individuals’ HIE. We included HIE of all insured decedents (30 to 90 years old) who died during March 2013 and March 2014 (n = 1018). No sampling was required. According to the decedents’ date of death, we extracted their last 24 months HIE. The period of time March 30, 2011 until March 30, 2014 (3 years) was used to guarantee a full 24 months of observations for decedents. A two-part econometric model was employed to investigate the effect of age, TTD, and some demographic variables on probability and conditional amount of individuals’ hospital expenditure. Stata software (version 16.0) was used for data processing and analysis.

 
Results
Our results demonstrated that the month-based TTDs especially near months before death of decedents (TTD1 to TTD10) significantly affected both probability and conditional amount of HIE. One month before death incurred more HIE than the rest of the months. A further interesting finding is that after including TTD, age variable as a conditional driver of HIE loses its direct effect on decedents’ HIE, but age TTD interaction effect on HIE is still positive and statistically significant.

 
Conclusion
The results confirm that TTD as a proxy of mortality indicator has a considerable effect on decedents’ HIE. The age variable has not directly affected decedents’ HIE but indirectly and through its interaction with TTD has a statistically significant effect on HIE. In addition to age, policy-makers should consider TTD to make better predictions of future HIE.

Keywords


  1. de Meijer C, Wouterse B, Polder J, Koopmanschap M. The effect of population aging on health expenditure growth: a critical review. Eur J Ageing.2013;10(4):353-361. doi:10.1007/s10433-013-0280-x
  2. Häkkinen U, Martikainen P, Noro A, Nihtilä E, Peltola M. Aging, health expenditure, proximity to death, and income in Finland. Health Econ Policy Law. 2008;3(2):165-195. doi:10.1017/S174413310800443X
  3. Werblow A, Felder S, Zweifel P. Population ageing and health care expenditure: a school of 'red herrings?' Health Econ. 2007;16(10):1109-1126. doi:10.1002/hec.1213
  4. Seshamani M, Gray A. Ageing and health‐care expenditure: the red herring argument revisited. Health economics. 2004;13(4):303-314. doi:10.1002/hec.826
  5. Stearns SC, Norton EC. Time to include time to death? The future of health care expenditure predictions. Health economics. 2004;13(4):315-327. doi:10.1002/hec.831
  6. Hazra NC, Rudisill C, Gulliford MC. Determinants of health care costs in the senior elderly: age, comorbidity, impairment, or proximity to death? Eur J Health Econ. 2018;19(6):831-842. doi:10.1007/s10198-017-0926-2
  7. Howdon D, Rice N. Health care expenditures, age, proximity to death and morbidity: implications for an ageing population. J Health Econ. 2018;57:60-74. doi:10.1016/j.jhealeco.2017.11.001
  8. Moore PV, Bennett K, Normand C. Counting the time lived, the time left or illness? Age, proximity to death, morbidity and prescribing expenditures. Soc Sci Med. 2017;184:1-14. doi:10.1016/j.socscimed.2017.04.038
  9. van Baal PH, Wong A. Time to death and the forecasting of macro-level health care expenditures: Some further considerations. J Health Econ. 2012;31(6):876-887. doi:10.1016/j.jhealeco.2012.08.003
  10. Dormont B, Grignon M, Huber H. Health expenditure growth: reassessing the threat of ageing. Health Econo. 2006;15(9):947-963. doi:10.1002/hec.1165
  11. Karlsson M, Klohn F. Ageing, health and disability–An economic perspective. In:  Boppel M, Boehm S, Kunisch S, eds. From Grey to Silver: Berlin: Springer; 2011:51-67. doi:10.1007/978-3-642-15594-9_5
  12. United Nations, Population Division. World Urbanization Prospects: The 2018 Revision (ST/ESA/SER.A/420). New York: United Nations; 2019.
  13. Zeinalhajlu AA, Amini A, Tabrizi J-S. Consequences of population aging in Iran with emphasis on its increasing challenges on the health system (literature review). Depiction of Health. 2015;6(1):8.
  14. Mirzaie M, Darabi S. Population aging in Iran and rising health care costs. Iranian Journal of Ageing. 2017;12(2):156-169.
  15. Seshamani M, Gray A. Time to death and health expenditure: an improved model for the impact of demographic change on health care costs. Age Ageing. 2004;33(6):556-561. doi:10.1093/ageing/afh187
  16. Geue C, Briggs A, Lewsey J, Lorgelly P. Population ageing and healthcare expenditure projections: new evidence from a time to death approach. Eur J Health Econ. 2014;15(8):885-896. doi:10.1007/s10198-013-0543-7
  17. Payne G, Laporte A, Deber R, Coyte PC. Counting backward to health care's future: using time‐to‐death modeling to identify changes in end‐of‐life morbidity and the impact of aging on health care expenditures. Milbank Q. 2007;85(2):213-257. doi:10.1111/j.1468-0009.2007.00485.x
  18. Bjorner TB, Arnberg S. Terminal costs, improved life expectancy and future public health expenditure. Int J Health Care Finance Econ. 2012;12(2):129-143. doi:10.1007/s10754-012-9106-1
  19. Zweifel P, Felder S, Meiers M. Ageing of population and health care expenditure: a red herring? Health Econ. 1999;8(6):485-496. doi:10.1002/(SICI)1099-1050(199909)8:63.0.CO;2-4
  20. Zweifel P, Felder S, Werblow A. Population Ageing and Health Care Expenditure: New Evidence on the “Red Herring.” The Geneva Papers on Risk and Insurance - Issues and Practice. 2004;29(4):652-666. doi:10.1111/j.1468-0440.2004.00308.x
  21. Wei N, Zhou Ll. Time-to-death and health care expenditure: evidence from China. J Popul Ageing. 2019. doi:10.1007/s12062-019-09256-4
  22. Aldridge MD, Kelley AS. The myth regarding the high cost of end-of-life care. Am J Public Health. 2015;105(12):2411-2415. doi:10.2105/AJPH.2015.302889
  23. Hoover DR, Crystal S, Kumar R, Sambamoorthi U, Cantor JC. Medical expenditures during the last year of life: findings from the 1992–1996 Medicare current beneficiary survey. Health Serv Res. 2002;37(6):1625-1642. doi:10.1111/1475-6773.01113
  24. Karlsson M, Klein TJ, Ziebarth NR. Skewed, persistent and high before death: Medical spending in Germany. Fisc Stud. 2016;37(3-4):527-559. doi:10.1111/j.1475-5890.2016.12108