WPVII - health care costs prior to death Final conference AHEAD Brussels, 29 June 2007 S. Gabriele, M. Raitano and F. Tediosi Istituto di Studi e Analisi Economica, ISAE Roma

WPVII - health care costs prior to death Outline 1)Rationale of the WPs 2)Main results of the literature review 3)Health care costs/expenditure prior to death in Italy:  Objectives and methodology  Results 4)Relevance of results for policy making

WPVII Rationale  Exploring the link between age and health care expenditure  It is usually stated that ageing will boost HCE  There is empirical evidence that the bulk of health care costs is concentrated in the last months of life  The correlation between age and HCE could be (at least in part) a spurious one, depending on the high correlation between age and death  The relationship between ageing and HCE is more complex than usually stated

WPVII Rationale  Exploring the link between age and health care expenditure  Increase in longevity will decrease the mortality rate in the “medium old” age group, postponing “death costs”  Declines in age specific mortality lead to declines in age specific costs because declining mortality reduces the proportion of high costs users (i.e. those near to death)  There are important consequences for health expenditure projections

WPVII Rationale  Are the risks for health systems sustainability due to ageing overstated?  Is it a way to claim for more resources that will increase the income of health care providers?  Ageing as a justification for past increases in spending, which can distract from the actual causes of growth and from considerations of appropriateness or effectiveness?  Dilemma between good management - and appropriateness - and sales/employment maximisation  The study of health costs prior to death can help policy making

WPVII Literature review on health care costs prior to death worldwide 3 types of studies:  “Descriptive” - evaluating the evolution of death costs per age of death, and the ratio, by age, between health care expenditures of decedents and survivors (N=18)  “Econometric” - estimating if age and distance from death are significant drivers of health care costs (N=7)  “Projection” studies - calculating the difference emerging between health care costs projections including or not the “death costs” assumption (N=13)

Descriptive studies  The bulk of health care costs is concentrated in the last years (or months) of life  The Decedent/Survivors health costs ratio is very high and decreases with age  wide consensus (shown by econometric analysis too) that in the health sector death costs decrease at higher age  e.g. Lubitz et al. show that Medicare costs in the last 2 years of life for a 70 yrs old decedent were over 50% higher than for a 90 yrs old decedent WPVII Literature review on health care costs prior to death worldwide

Descriptive studies  But long term care costs increase in the last years of life in the oldest age group as well  This may be due to the different kind of care needed by the oldest old near to death  Then, the age-decreasing pattern of health care death costs may be partially offset by the age-increasing pattern of long term care death costs WPVII Literature review on health care costs prior to death worldwide

Econometric studies  Wide debate on econometric methods to be used to estimate the drivers of HCE…...but also consensus on the results  Proximity to death have significant effects on health care costs, while some studies show that age is not significant e.g.:  Zweifel et al. find that age isn’t a significant driver of health care costs; they conclude that the relationship between age and health care expenditure is a red herring  Seshamani & Gray show that age is significant, but it is not the main driver of HCE; the main driver is proximity to death …….age is, at least in part, a red herring in relation to health care expenditure WPVII Literature review on health care costs prior to death worldwide

Projection studies  Age alone is not a good basis for predicting the effects of ageing….time to death method yields lower projections, but it doesn’t offset the impact of ageing  The projections strongly depend on the method chosen to include the death costs assumption  No wide consensus on how to include the death related costs assumption WPVII Literature review on health care costs prior to death worldwide

WPVII Health costs prior to death in Italy Objectives  To estimate health care expenditure:  by “distance from birth” - i.e. age  by distance from death - i.e. the cost of the last months of life  To distinguish between “old age costs” and “death costs” for informing health care expenditure projections

WPVII Health costs prior to death in Italy Record linkage - through fiscal number and RECLUST approach Methods a) Assemble a database of health care consumptions at patient level Administrative databases of health care consumptions Death abstracts database Database of health care consumptions with data at individual level

 Expenditure estimated using national tariffs Methods b) Compute health care expenditure by age and gender c) Compute health care consumption/expenditure prior to death – i.e. last 12 months – by age and gender WPVII Health costs prior to death in Italy

 National versus regional  Decentralization of Italian NHS implies that differences among regional health systems, already relatively wide, are increasing  In different Regions of Italy now the health care model is relatively different Methods - data WPVII Health costs prior to death in Italy

 National versus regional  Lack of good quality data at national level - e.g.  Detailed data on mortality available on request, but record linkage with health care consumption databases is hard  Health care consumption data at patient level not available  Better quality data at regional level:  In a number of Regions data at patient level are available at least for hospital sector Methods - Data WPVII Health costs prior to death in Italy

 4 Regions  Lombardia (north - over 9 m. residents)  Toscana (centre m. residents)  Abruzzo (south 1.3 m, residents)  Puglia (south – 4.1 m. residents)  All together these Regions account for around 34% of the Italian population Methods Main focus on hospital sector (43-49% of health care budget)

 The Regional Health Systems of the 4 Regions are relatively different in terms of:  Inputs  Organisation  Public private mix  The population structure is also different  Explorative analysis on outpatient specialist care, laboratory tests, and prescription drugs in one Region (Toscana) WPVII Health costs prior to death in Italy Methods

WPVII Health costs prior to death in Italy Methods - data Mortality:  regional death abstracts databases, and a national database provided by the national statistical institute (ISTAT, Mortalità per causa nelle regioni) - year 2000 and 2001 Hospital discharge abstracts:  of year 1999, 2000, and 2001

WPVII Health costs prior to death in Italy  “Cases”: subjects deceased in year 2000  deceased in 2000 and admitted in hospital in 2000  deceased in 2000 and admitted in hospital in 1999 within 12 months before dying  deceased in 2000 and never admitted in hospital in the last 12 months of life To compute health care expenditure in the last year prior to death, the subjects were distinguished in “cases” – deceased – and “controls” Methods

WPVII Health costs prior to death in Italy  “Controls”:  Subjects alive at , and surviving at least 12 months after the hospital admission:  admitted in 2000 and in 1999 too - only admissions in 2000 are included  admitted between 1999 and 2000 or 2000 and are considered only the days of stay in 2000  deceased in 2001 and admitted in 2000 only for the days of stay precedent the 12 months from death  Subjects never admitted and alive at  Hospital admissions in the last year of life of subjects deceased in 2001 were excluded Methods

WPVII Health costs prior to death in Italy Average expenditure: € € '000 1'200 1'400 1'600 1'800 2'000 2' Age Expenditure per capita € Puglia Abruzzo Toscana Lombardia Results: Hospital expenditure by age and gender of survivors '000 1'200 1'400 1'600 1' MenWomen

Average expenditure: €5,481- €5, '000 10'000 15'000 20'000 25' Age Expenditure per capita € 0 5'000 10'000 15'000 20'000 25' Men Women Puglia Abruzzo Toscana Lombardia WPVII Health costs prior to death in Italy Results: Hospital expenditure by age and gender of deceased

WPVII Health costs prior to death in Italy Results: Hospital expenditure by age and gender of survivors and deceased Age Expenditure per capita € Deceased - men Deceased - women Survivors - men Survivors women

WPVII Health costs prior to death in Italy '000 1'200 1'400 1'600 1'800 2'000 2'200 2'400 2' Age Expenditure per capita € '000 1'200 1'400 1'600 1' Puglia Abruzzo Toscana Lombardia MenWomen Results: Hospital expenditure by age and gender of survivors and deceased

WPVII Health costs prior to death in Italy _4 10_14 20_2430_3440_4450_5460_6470_7480_ Age Ratio _4 10_14 20_2430_3440_4450_5460_6470_7480_ Puglia Abruzzo Toscana Lombardia MenWomen Results: Hospital expenditure of deceased and survivors - ratio (deceased/survivors) Ratios all ages: 10.2 – 14.0

WPVII Health costs prior to death in Italy Age Puglia Abruzzo Toscana Lombardia MenWomen _4445_4950_5455_5960_6465_6970_7475_7980_8485_ Ratio _4445_4950_5455_5960_6465_6970_7475_7980_8485_ Results: Hospital expenditure of deceased and survivors - ratio (deceased/survivors)

WPVII Health costs prior to death in Italy Results: Hospital expenditure of deceased in the last 12 months – by proximity to death - Lombardia Men Months to death Expenditure per capita - € AllAge 65+Age 1-44 Women Months to death Expenditure per capita - € AllAge 65+Age 1-44

WPVII Health costs prior to death in Italy Results: Hospital expenditure of deceased in the last 12 months – by proximity to death - Toscana Men Months to death Expenditure per capita - € AllAge 65+Age 1-44 Women Months to death Expenditure per capita - € AllAge 65+Age 1-44

WPVII Health costs prior to death in Italy Results: Hospital expenditure of deceased in the last 12 months – by proximity to death - Puglia Men Months to death Expenditure per capita - € AllAge 65+Age 1-44 Women Months to death Expenditure per capita - € AllAge 65+Age 1-44

WPVII Health costs prior to death in Italy Results: Hospital expenditure of deceased in the last 12 months – by proximity to death - Abruzzo Men Months to death Expenditure per capita - € All Age 65+Age 1-44 Women Months to death Expenditure per capita - € AllAge 65+Age 1-44

WPVII Health costs prior to death in Italy Results: Expenditure for outpatient specialist care, laboratory tests, and prescription drugs by age – deceased - Toscana Age Expenditure per capita - € Outpatient specialist care Laboratory tests Prescription drugs

WPVII Health costs prior to death in Italy Months to death Expenditure per capita - € Outpatient specialist care Laboratory tests Prescription drugs Results: Expenditure for outpatient specialist care, laboratory tests, and prescription drugs by age – deceased in last 12 months

WPVII Health costs prior to death in Italy  This WP confirms the results of other studies  (Italian) socio-economic and institutional regional differences do not seem to affect significantly the results  No significant impact on health care costs prior to death, expenditure by age, and ratio expenditure decedents/survivors Relevance of results for policy making

WPVII Health costs prior to death in Italy  From a macro economic perspective distinguishing “death costs” from “old age costs” can inform health expenditure projections  From a micro economic perspective distance from death is an important factor for explaining health expenditure concentration in specific population groups Relevance of results for policy making