healthcare spending

When Nelson Mandela passed away. Facebook was filled with lamentation (from the moved and the exhibitionistic), gratitude (from those celebrating their renewed sense of national identity) and derision (the hipster crowd, for whom he was just a guy, and what’s all this sanitisation of saints?).

For the most part, I was just offended by the over-usage of “RIP”.

Because if you’re going to take the trouble to write a status, then don’t use an acronym. Write it out, for goodness sake. And if you’re too tired to go all the way, at least punctuate correctly. It’s R.I.P. With periods.*
*Shout out to Alex, with whom I shared this gripe over a Butcher’s Block draught.

Nelson Mandela was 95 when he passed away, which is incredible in a country where the average life expectancy is around 53. And I guess that no one is really unaware of the fact that modern medicine has made it (and is continuing to make it) easier to live longer lives. A graph:

life expectancy over timeAnd while we’re at it, a map:

life expectancy at birthMainly because I like maps.

Longer life presents all manner of exciting business possibilities: geriatric medical specialisation, geriatric insurance, geriatric psychology, geriatric holiday planning, geriatric housing developments… This is all new ground on a new scale. We’ve never had to deal with such large populations of the elderly. True – the elderly are not the most productive segment of the population. But if you’re old and wealthy, then you have almost zero incentive to save. So if we want to close the inequality gap, then we should be pushing for a little more spending and a little more altruism.

I love a silver lining.

That said, here is another graph:

annual per capita healthcare costs by age

Now obviously, the US has some problems. Namely: the fact that Medicare kicks in at age 65, after which, things get paid for by the US government. And if the patient and the person paying are two different people, then it’s relatively easy for the healthcare system to just prescribe and preventatively operate without any interference from private medical insurers and the threat of non-payment.

But regardless of your geography, your annual healthcare spend goes up rapidly once you start heading past 50. And that’s not surprising – up to that point, your body is relatively fit; and the major diseases that might have threatened you a few centuries ago are now a hazy memory of vaccinations and jabs. Thereafter, it’s your body that’s the real cost.

That said, I want to make one more observation about the above graph: the data refers to the aggregate, not the individual. So it’s not necessarily saying that a particular person is likely to spend $30,000 per year in his/her 70s or whatever. You need to read that graph in conjunction with this statement by Dr Jonathan Bergman of UCLA:

We end up spending about a third of our overall healthcare resources in the last year of life.”

What you are seeing in that graph is more people dying each year after the age of 55. And if the equation is:

Total Healthcare Spend ÷ Total People in Age Group = Annual Per Capita Spend

and you have fewer people in each age group (reducing the denominator), alongside more end-of-life costs for each person that died (increasing the numerator), then you’re obviously going to end up with a higher annual per capita spend.

Which is problematic in a number of ways: but mainly because you have a healthcare industry which generates a significant portion of its revenue stream from patients that are about to die. So there is a clear vested interest to keep you in hospital, to resuscitate, to extend the number of nights spent in ICU, to scan, to operate, and to medicate. Especially in countries where you have a healthcare industry that’s privately owned and a medical insurance industry that’s government-funded.

In addition, the healthcare spend is not on palliative care that extends quality of life. There are studies out there that show the higher the amount of money spent in the last year of life, the worse the death experience*.
*Although this hardly seems like a real result. I mean, it’s not like you can ask “So how did this time compare to last? You reckon you’ll go with the chemo again?”

And given the massive macroeconomic problems that the world economies will face with their aging populations, it seems like there is a win-win here for everyone but the healthcare industry. Although I realise that I’m now dicing into euthanasia grounds*.
*For the record, I’m completely against it. 

A simple solution: Advance Directives.

Families should discuss death in advance and deal with some of the more difficult issues (“What to do if I’m braindead”; “Do I want to be resuscitated?”; etc). Because it’s not just about your last year of life: a third of the end-of-year cost is spent in that final month.

Is it an easy conversation? Obviously not. But it’s certainly easier than just leaving that decision to your loved ones while you recline in induced coma.

And for those of us that don’t want too much suffering toward the end (which, empirically, will be most of us), it’ll reduce your cost of dying.

As for me, I want my life to be extended to its bitterest end. Consider that my advance directive*.
*Along with burial over cremation.

Because only then will I be ready to RIP.