Why is End-of-Life Spending so High? Evidence from Cancer Patients

68 Pages Posted: 7 Dec 2020 Last revised: 18 Nov 2021

See all articles by Dan Zeltzer

Dan Zeltzer

Tel Aviv University - Eitan Berglas School of Economics

Liran Einav

Stanford University - Department of Economics; National Bureau of Economic Research (NBER)

afink@mit.edu Finkelstein

Massachusetts Institute of Technology (MIT)

Tzvi Shir

Clalit Health Services

Salomon Stemmer

Tel Aviv University - Rabin Medical Center

Ran Balicer

Ben Gurion University of the Negev

Date Written: December 2020

Abstract

The concentration of healthcare spending at the end of life is widely documented but poorly understood. To gain insight, we focus on patients newly diagnosed with cancer. They display the familiar pattern: even among cancer patients with similar initial prognoses, monthly spending in the year post diagnosis is over twice as high for those who die within the year than those who survive. This elevated spending on decedents is almost entirely driven by higher inpatient spending, particularly low-intensity admissions, which rise as the prognosis deteriorates. However, even for patients with very poor prognoses at the time of admission, most low-intensity admissions do not result in death, making it difficult to target spending reductions. We also find that among patients with the same cancer type and initial prognosis, end-of-life spending is substantially more elevated for younger patients compared to older patients, suggesting that treatment decisions are not exclusively present-focused. Taken together, these results provide a richer understanding of the sources of high end-of-life spending, without revealing any natural “remedies.”

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Suggested Citation

Zeltzer, Dan and Einav, Liran and Finkelstein, afink@mit.edu and Shir, Tzvi and Stemmer, Salomon and Balicer, Ran, Why is End-of-Life Spending so High? Evidence from Cancer Patients (December 2020). Available at SSRN: https://ssrn.com/abstract=3743894 or http://dx.doi.org/10.2139/ssrn.3743894

Dan Zeltzer (Contact Author)

Tel Aviv University - Eitan Berglas School of Economics ( email )

P.O. Box 39040
Ramat Aviv, Tel Aviv, 69978
Israel
+972(3)640-5824 (Phone)

HOME PAGE: http://www.tau.ac.il/~dzeltzer

Liran Einav

Stanford University - Department of Economics ( email )

Landau Economics Building
579 Serra Mall
Stanford, CA 94305-6072
United States
650-723-3704 (Phone)
928-223-4973 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Afink@mit.edu Finkelstein

Massachusetts Institute of Technology (MIT)

Tzvi Shir

Clalit Health Services

Israel

Salomon Stemmer

Tel Aviv University - Rabin Medical Center

Tikva
Israel

Ran Balicer

Ben Gurion University of the Negev ( email )

Beersheba
Israel

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