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The economics of dying in one graph

economix-15healthspendinglastyearoflife-custom1.jpg

And that graph -- which shows different incomes groups -- still hides huge inequality:

The study estimated that out-of-pocket health-care spending in the last year of life amounted to $11,618 on average, with the 90th percentile equal to $29,335, the 95th percentile $49,907, and the 99th equal to $94,310.

Yes, you read that correctly: Health-care spending in the last year of life by the top 1 percent of Americans is nearly twice the annual income of the typical American household.

Source.

By Ezra Klein  |  July 19, 2010; 12:05 PM ET
Categories:  Charts and Graphs , Health , Health Economics  
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Comments

so the wealthy aren't allowed in Ezra's world to spend their own money towards trying to stave off death (no matter how futile the attempt)?

Can we please see a corresponding graph that shows WHERE these monies come from (ie insurance; personal, disposable income; Medicaid, Medicare etc?

Posted by: visionbrkr | July 19, 2010 12:13 PM | Report abuse

"Yes, you read that correctly: Health-care spending in the last year of life by the top 1 percent of Americans is nearly twice the annual income of the typical American household."

A lot of that expense has to be their ability to pay out of pocket for innovative (and usually very expensive) techniques, and their ability and desire for private suites, fully-staffed home healthcare, etc. None of which should be a burden to the public healthcare system, I wouldn't think.

Posted by: Kevin_Willis | July 19, 2010 12:20 PM | Report abuse

Yeah I don't see what the problem is here. If anything justifies the use of much or all of your resources, it's the possibility of death.

Notably this is something healthcare reform doesn't touch at all, and with good reason.

Posted by: NS12345 | July 19, 2010 12:21 PM | Report abuse

Ezra Klein makes a great point. The wealthy are really getting screwed by the system. If things were fair, more of their expenses would be borne by the lower quintiles. That is his point, right?

Posted by: Rob_ | July 19, 2010 12:27 PM | Report abuse

not to mention the fact that the "wealthy" could have afforded and been more proactive in purchasing Long Term Care insurance which is paying the cost of this care. I agree with most on here. Poor liberal talking point.

Posted by: visionbrkr | July 19, 2010 12:29 PM | Report abuse

Exhibit A would be Mr. Cheney's spanking new Left Ventricular Assist Device, which comes with an initial price tag of $100,000 plus three weeks of hospitalization. Sure hope he picked that up out of his own pocket!

Posted by: guesswhosue | July 19, 2010 12:30 PM | Report abuse

So what is the problem ?
The health spending by the top 1% is by far with their own money, very little, if any of it, paid by Medicare, etc.
People can spend their money on whatever they choose to.

Posted by: observer31 | July 19, 2010 12:30 PM | Report abuse

I would infer that the graph shows the disparity in palliative care. At that point in time, the level of care is dedicated to easing the disease condition and not towards extending the life. Just because the wealthier individuals can afford a better palliative care doesn't mean the less affluent patient didn't get sufficient care to ease their pain and suffering.

Posted by: SpecTP | July 19, 2010 12:35 PM | Report abuse

The Wealthy have tax loopholes that aren't available to the middle class - loopholes that (per Warren Buffet) allow Buffet's secretary to pay a HIGHER tax rate than he does.

Posted by: angie12106 | July 19, 2010 12:36 PM | Report abuse

The real question is if we assume that there is a finite amount of money a person spends on health care during his/her life, how do individuals (to the extent that they can) determine where and when those resources are used. If individuals don't determine when that money is spent, what is the govt's role in allocating that spending so that it enhances people's quality of life throughout the life span? Treating a poor or working poor person who has diabetes when they are first diagnosed, with lifestyle counseling, oral or injectable drugs, semi regular checkups to make sure that the treatment regime is working, etc. may well cost less than denying that care and having medicaid stuck with years of dialysis because simple preventative measures were not eligible for medicaid funding. Clearly, people with the means to spend extravagantly on their end of life care are welcome to do so. When is medicare or medicaid is involved, however, the govt. owes it to taxpayers to spend money in ways that allocates that finite amount of money in a way that promotes an individual's health throughout his/her life, and not to scrimp and deny care until that person is on his/her death bed and then spend huge sums of money in the last stage of life.

Posted by: srw3 | July 19, 2010 12:36 PM | Report abuse

My reading of what's written in the quoted bit is that across all individuals, the average medical spending in the last year of life is $11k (I assume this includes people who drop dead, and have little or no unusual medical spending in the prior year), but there's variation across individuals, and only 1% of individuals have medical spending in the last year of life that exceeds $94K. For that set of figures, income doesn't really come into it.

Posted by: bdballard | July 19, 2010 12:39 PM | Report abuse

So what do the little people care? I reacted to this, perhaps very wrongly, by thinking what a waste of time to sacrifice healthy years to endless work hours and butt kissing if it all just ends up being pushed into the last "all in" pot anyway. Given the high cost of last year of life treatment, does it essentially mean for most people it will eat through your money and then some anyway? If that's the case, who cares if your remaining savings are a few thousand or few hundred thousand?

Posted by: mrnegative | July 19, 2010 12:39 PM | Report abuse

This is completely meaningless. We could draw similar graphs on expenditures on food, shelter or other topics...so what? Rich people spend more money....wow, fascinating. I would only contrast it to Ezra's other redistributive whining where he complains that taking money from rich people is good for aggregate demand because they don't spend it.

Posted by: staticvars | July 19, 2010 12:40 PM | Report abuse

The U.S. Constitution is meant to guarantee, as far as humanly possible, a government that promotes equal OPPORTUNITY, not equal OUTCOMES, for every citizen. The difference between outcomes, according to the U.S. Constitution, will be determined by each individual citizen, not by the federal government.

Posted by: DoTheRightThing | July 19, 2010 12:42 PM | Report abuse

They all died. You just spend more if you're wealthy.

Did that extra spending help some of them live a higher-quality, longer life?

Posted by: RedBird27 | July 19, 2010 12:45 PM | Report abuse

@observer31:The health spending by the top 1% is by far with their own money, very little, if any of it, paid by Medicare, etc.

Where exactly are you getting this information? Medicare is not means tested as far as I know. Warren Buffett is just as entitled to medicare as his secretary is. Even if the plutocrats are paying lots of their own money for gold plated needles, extra nursing care, etc. they still receive medicare subsidies for hospitalization, approved medical devices, etc. I doubt that rich dying people receive less in medicare spending than poor people.

Posted by: srw3 | July 19, 2010 12:45 PM | Report abuse

Your graph is so hard to read the way you have it shown. The x-axis should be the income, and the Y-axis should be the age at death, not the fip side as you have it. Even though we're talking about the same data, the interpretation of the graph is much more difficult when presented your way!
Lastly, I do not see the economics of keeping people alive by taxing the rest of us more so we can subsidize low to middle income people's health care expenses to keep them alive! I am lower middle income, and do not wish to be burdened to pay for others, nor do I wish to have others to pay for me to stay alive. Rich people who pay out-of-pocket to keep themselves alive have every right to do so, since they are not burdening the rest of us! We pay enough taxes to support poor people, unemployed people, and people on welfare and medicaid who keep breeding more welfare people!

Posted by: genevieve2000 | July 19, 2010 12:49 PM | Report abuse

First, your graph is so hard to read the way you have it shown. The x-axis should be the income, and the Y-axis should be the age at death, not the fip side as you have it. Even though we're talking about the same data, the interpretation of the graph is much more difficult when presented your way!
Lastly, I do not see the economics of keeping people alive by taxing the rest of us more so we can subsidize low to middle income people's health care expenses to keep them alive! I am lower middle income, and do not wish to be burdened to pay for others, nor do I wish to have others to pay for me to stay alive. Rich people who pay out-of-pocket to keep themselves alive have every right to do so, since they are not burdening the rest of us! We pay enough taxes to support poor people, unemployed people, and people on welfare and medicaid who keep breeding more welfare people!

Posted by: genevieve2000 | July 19, 2010 12:50 PM | Report abuse

First, your graph is so hard to read the way you have it shown. The x-axis should be the income, and the Y-axis should be the age at death, not the fip side as you have it. Even though we're talking about the same data, the interpretation of the graph is much more difficult when presented your way!
Lastly, I do not see the economics of keeping people alive by taxing the rest of us more so we can subsidize low to middle income people's health care expenses to keep them alive! I am lower middle income, and do not wish to be burdened to pay for others, nor do I wish to have others to pay for me to stay alive. Rich people who pay out-of-pocket to keep themselves alive have every right to do so, since they are not burdening the rest of us! We pay enough taxes to support poor people, unemployed people, and people on welfare and medicaid who keep breeding more welfare people!

Posted by: genevieve2000 | July 19, 2010 12:51 PM | Report abuse

First, your graph is so hard to read the way you have it shown. The x-axis should be the income, and the Y-axis should be the age at death, not the fip side as you have it. Even though we're talking about the same data, the interpretation of the graph is much more difficult when presented your way!
Lastly, I do not see the economics of keeping people alive by taxing the rest of us more so we can subsidize low to middle income people's health care expenses to keep them alive! I am lower middle income, and do not wish to be burdened to pay for others, nor do I wish to have others to pay for me to stay alive. Rich people who pay out-of-pocket to keep themselves alive have every right to do so, since they are not burdening the rest of us! We pay enough taxes to support poor people, unemployed people, and people on welfare and medicaid who keep breeding more welfare people!

Posted by: genevieve2000 | July 19, 2010 12:52 PM | Report abuse

And guess what the outcomes were despite the difference in cost--EVERY ONE OF THEM EVENTUALLY DIED. There is no outwitting the grim reaper, no matter how much money you have.

Some of those costs by the wealthy are for private suites and nursing care, I assume, but some is for expensive and intrusive and in some cases painful treatments that hardly prolong life and make it pretty painful at the end. And some are Medicare-financed hip replacements, dyalisis, rescusitation, complex operations etc in the last year of life that don't really do much to prolong life (and in the case of many operations) hasten the end. This is where the savings is for Medicare.

For me the real issue is palliative care--make death less painful for everyone, since it is really the inevitable consequence of life. Having watched the process up close, I'd rather die from pneumonia at 85 than from cancer and multiple organ failure at 95.

But care is care. My mother paid $285 a day in a nursing home that also had Medicare (Medicaid?) patients that had no resources. My mother had long-term care insurance that paid all of $40 a day, but she paid the rest (it is deductible, though). All of her actual medical care (and there wasn't a whole lot of that) was paid by Medicare except $250 for her last hospital admission and a few $5 copays for medicine. She died at 96.

Posted by: Mimikatz | July 19, 2010 1:07 PM | Report abuse

@g2000:Lastly, I do not see the economics of keeping people alive by taxing the rest of us more so we can subsidize low to middle income people's health care expenses to keep them alive!

Every elderly person, regardless of income, is enrolled in medicare, so we subsidize the rich and poor alike. Exactly what is your alternative? Should we have a maximum age for medicare and medicaid benefits and after you reach that age, you are on your own? If that is your solution, we will need some additional funding for the dead body carts to roll through the streets to pick up all those old dead people.

"I am lower middle income, and do not wish to be burdened to pay for others, nor do I wish to have others to pay for me to stay alive."

Not sure what lower middle income means. If you are below the median income of about $50k for a family, then you are getting a subsidy from those wealthier than you.

No one is forcing you to use medicare services if you don't want them. It is a bit presumptuous of you to try to take other people's medicare benefits away from them since we, as a society, have decided that we don't want old people to suffer and die without medical care, which was the case before medicare. One of the reasons that medicare exists is that private insurers decided that they couldn't make money on insuring old poor people so they basically got out of that market for non-wealthy (below twice the median income) people.

"We pay enough taxes to support poor people, unemployed people, and people on welfare and medicaid who keep breeding more welfare people!"

If you are really below the median income, then you are getting subisdized, in effect, taking government benefits that others pay for.

Really, why don't you just say those brown skinned, cadillac driving, welfare queens, who keep breeding more of "them"?

Posted by: srw3 | July 19, 2010 1:12 PM | Report abuse

What does the top quintile get for their extra $15k in dying in their 90s? The end result seems similar.

Posted by: HardyW | July 19, 2010 1:17 PM | Report abuse

The point: There is a finite amount of health services. As a country we must decide how to allocate those health services. Right now we allocate by money. That means the rich may get a few extra years while the poor will die. It also means we are allocating a lot of health services to wealthy people near the end of their lives as opposed to kids or young mothers.

Posted by: ideallydc | July 19, 2010 1:18 PM | Report abuse

For those with taxable estates (yeah, I know, not applicable this year) out-of-pocket spending in the last year of life is win-win and then some. If it's deductible as a medical expense, that's 35% plus state taxes off the top. Insofar as it reduces the taxable estate, it's also 55% (or 45% or whatever) tax-subsidized. So if you live in a high-tax state, it's essentially free, or even profit-making. But you have to know you're in the last year of life...

Posted by: paul314 | July 19, 2010 1:20 PM | Report abuse

Just to clarify: Medicare pays for all doctor visits, drugs, hospitalization, operations etc that are on the Medicare-approved list, sometimes with copays, depending on the actual plan the person chooses. Nursing home care that is rehabilitative is paid by Medicare, but when it is just basically custodial, the patient pays, and it is expensive. When you have spent your income down to a very low level, or if you are poor to begin with, Medicaid pays for long-term nursing care.

If the patient is competent or there is an advance directive and/or aggressive family members who agree on the treatment plan, there is lots of leeway on what kinds of interventions to do in different situations. But sometimes there is really no one to consent, or the patient is compliant, and they do everything possible that Medicare will pay for regardless of prognosis or efficacy or intrusiveness or pain. This, and the family members who acquiesce out of guilt and/or ignorance is where the cost savings would be, if costs (physical and psychological as well as monetary) and benefits and alternatives were as freely discussed as in the plan my parents had (Kaiser) and the issue had been discussed as extensively as when my parents were fully competent, not in armies of private nurses and exotic, experimental treatments for rich people.

Posted by: Mimikatz | July 19, 2010 1:21 PM | Report abuse

PS. The Graph clearly says it is total OUT-OF-POCKET expenses in the last year of life. I assume this is largely nursing home care that is not paid by the gov't unless you are poor, or by insurance unless you have a long-term care plan that pays close to the actual costs, which are over $250 a day in a well-run facility. Plus co-pays for hospitalization and drugs.

Plus it looks like most if not all people in the graph are over 65 at death, so Medicare is paying, then Medigap insurance of you have it or a generous employer-paid Medicare plan, or Medicaid for most of it, and what shows up is out-of-pocket expenses.

This has little relation to Medicare savings, except to the extent people are paying copays for unnecessary hospitalizations, treatments and drugs. And as one commenter pointed out, it has little relation to comfort in the last year since Medicaid pays for nursing home care for the poor and palliative care should be covered for most everyone.

Posted by: Mimikatz | July 19, 2010 1:32 PM | Report abuse

I took this not as a comment on healthcare, but on income disparity. It's not that the poor are getting some kind of shoddy or unfair outcomes, though perhaps they are. It's that income disparity has gotten to the point where at the end of their lives the rich are spending more money to get whatever great things they're getting while the poor are left with whatever very basic care they can afford.

It'd be helpful to have this data tracked over time, which I assume would demonstrate that, like with salaries between CEOs and workers the rich were spending some amount more than the poor on end of life stuff back in the 70s but that spread has increased dramatically over the ensuing decades.

Posted by: MosBen | July 19, 2010 1:46 PM | Report abuse

Medicare has a very limited nursing care benefit. You have to medically require skilled nursing, and not just custodial care. There is a hospice benefit, but it is restricted to those with a life expectancy of 6 months or less.

Posted by: NoVAHockey | July 19, 2010 1:49 PM | Report abuse

The government can even this out real easily by killing everyone at age 30.

Posted by: FastEddieO007 | July 19, 2010 1:56 PM | Report abuse

What does a curve like this look like in countries like China, Russia, and North Korea? (including members of the powerful Communist government)

Posted by: FastEddieO007 | July 19, 2010 1:59 PM | Report abuse

Expensive end of life care or the estate tax. Take your pick.

Posted by: jnc4p | July 19, 2010 2:10 PM | Report abuse


@fe007:What does a curve like this look like in countries like China, Russia, and North Korea? (including members of the powerful Communist government)

What possible relevance does the care of elites in non-democratic (even if there are "elections") countries have to the debate about end of life care?

It looks like you are drawing a parallel between the plutocrats here and the non-elected elites in autocracies...Hey maybe there is a similarity between the two groups....

Posted by: srw3 | July 19, 2010 2:18 PM | Report abuse

How about labeling your chart properly. C-.

Posted by: Wallenstein | July 19, 2010 2:32 PM | Report abuse

just out of curiousity how does this compare with what's spent with the rest of the industrial countries around the globe?

sorry maybe that's more of a question for the research desk

Posted by: visionbrkr | July 19, 2010 2:37 PM | Report abuse

The government can even this out real easily by killing everyone at age 30.

Posted by: FastEddieO007 | July 19, 2010 1:56 PM | Report abuse

****************************************

Lastday Logan! Perhaps you'll be renewed at Carousel.

Posted by: Jeff08 | July 19, 2010 3:09 PM | Report abuse

Lastday Logan! Perhaps you'll be renewed at Carousel.

Posted by: Jeff08 | July 19, 2010 3:09 PM
_____________________________

I see what you did there. ;)

Posted by: lostinthemiddle | July 19, 2010 4:35 PM | Report abuse

To all who are saying so what it's their money. You are totally missing the point.

Health-care spending in the last year of life by the top 1 percent of Americans is nearly twice the annual income of the typical American household.

The point being. HEALTH CARE COSTS FOR ONE YEAR SHOULD NOT EQUAL TWO YEARS OF INCOME.

Get it?

The rich can spend their money on whatever they want.
I shouldn't have to stash two years of income, just to pay for health care costs.

Posted by: strictly_liberal | July 19, 2010 4:42 PM | Report abuse

Ezra, this graph is useless drivel -- I bet if you graph out the expenditures on weddings and break it down by income, it would look pretty much the same. The same goes for a graph on restaurant dining, automobile purchases, jewelry purchases, and private school tuition. In case you haven't figured it out yet, rich people have money, and they spend it.

Posted by: carpiodiem | July 19, 2010 5:02 PM | Report abuse

@strictly_liberal: The point being. HEALTH CARE COSTS FOR ONE YEAR SHOULD NOT EQUAL TWO YEARS OF INCOME.

Get it?

Yes I get it, but beyond the point that income inequality is at an all time high in the US, I am not sure what your point is IRT health care costs.

"The rich can spend their money on whatever they want.
I shouldn't have to stash two years of income, just to pay for health care costs."

These two sentences don't seem to relate to each other. No one is asking you to spend like a plutocrat in your last year of life. I would suggest that hospice is probably a more cost effective, sane and humane way to deal with end of life care as opposed to aggressive interventions to squeeze out a few more months of life (the 90K solution to end of life care). Having gone through the end of life experience with both parents recently, I can attest to the compassion and expertise of the hospice workers involved in my parent's end of life care.

Posted by: srw3 | July 19, 2010 5:28 PM | Report abuse

Need some survival curves to see if the extra money was effective.

Posted by: Beacon2 | July 19, 2010 5:46 PM | Report abuse

All I have to say after reading most of these comments is (a) you are ignorant and (b) shame on you. Since February I've been watching (and dealing with) my mother's end of life issues in a world where her only resources are Social Security and basic Medicare. You do not want to find out what Medicare does not pay for. Among other things, while Medicare will pay for hospice care, it will not pay for room and board IN a hospice. So, unless there's a charity in your area or you qualify for Medicaid (and there is a hospice in your area that will take Medicaid -- not all will), you better have the money somewhere to pay for it, at rates running from 125 to 400+ a day. Lucky for my mother and my family the local Catholic diocese runs a very compassionate charity hospice that does not charge for room and board.

Posted by: nolo93 | July 19, 2010 9:13 PM | Report abuse

"And that graph -- which shows different incomes groups -- still hides huge inequality:"

Just when you think you've got that dratted playing field all nice and level, you suddenly realize that the rich don't just rely on government and insurance. They have their OWN MONEY.

What to do. What to do.

I know! Let's make a rule. Nobody is allowed to spend their own money buying anything that is better than what the government says they should have. From each according to his ability to each according to his need.

Posted by: bgmma50 | July 19, 2010 11:24 PM | Report abuse

This fixation by some in the peanut gallery on the wealthy's "OWN MONEY" is absurd. The economic system funnels wealth up to those at the top of the pyramid far in excess of their economic contribution. Those who create the wealth subsidize those who reap it. If the majority who are creating wealth decide to fix this politically with a progressive tax regime, its no longer the rich's "OWN MONEY." It only ever was because the system was rigged in their favor.

Posted by: zenospinoza | July 20, 2010 12:40 AM | Report abuse

I can't find a free or draft version of the paper anywhere, but I don't think "out-of-pocket health-care spending in the last year of life amounted to $11,618 on average, with the 90th percentile equal to $29,335, the 95th percentile $49,907, and the 99th equal to $94,310" is referring to income percentiles, it's referring to "out of pocket health care spending in the last year of life" percentiles. Maybe Dylan could take this question on as a research undertaking, and contact one of the authors?

Posted by: bdballard | July 20, 2010 10:51 AM | Report abuse

You are not really looking at this correctly. It would be normal for a wealth person to spend more for additional care at the end of his life. A poor person would do the same at the end of his life, if he had it.
The statistic you need too look for is what are third party payers including medicare paying for the differing levels of wealth. Does the low middle class senior get the same services through medicare and other 3rd party carriers compared to the wealthy influential one per cent.
It really doesn't matter what a person pays out of pocket, but it does matter if different levels of individual income is handled differently by medicine. Do we overindulge the wealthy at tax payers expense? This is not meant as a condemnation. It is a serious question that would be interesting to evaluate. JB

Posted by: jameshblackburn | July 21, 2010 8:22 PM | Report abuse

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