Study rebuts idea that Medicare is wasted on the dying

Share this content:

New findings from a team of academic researchers firmly contradict a widely held theory that Medicare futilely spends too much on seniors in their final year of life.

Estimates place final-year-of-life spending at around 25% of all Medicare outlays. Investigators studied records of almost 6 million randomly selected individuals and found that a small portion of that was spent on beneficiaries expected to die within a year.

"What we discovered is, very little money is spent on people who we know with high probability are going to die in a short amount of time," says Amy Finkelstein, a professor in MIT's Department of Economics. She co-authored the paper, "Predictive modeling of U.S. healthcare spending in late life," which appears in the journal Science.

"I do hope we stop pointing to end-of-life spending as an obvious problem," Finkelstein said. "That's not to say there aren't problems in the U.S. healthcare system, but this is not a symptom of them."

Researchers found that death is “highly unpredictable.” Less than one in 10 people who die in a year have a predicted one-year mortality rate above 50%, they said. Further, of all people admitted to the hospital in their final year of life, fewer than 4% of them had a one-year mortality rate of 80% or above when admitted.

Finkelstein and colleagues say that rather than drawing conclusions from aggregate numbers for final-year-of-life spending, the focus should be on specific procedures and treatments to assess their respective effectiveness.