6-STEPS Living Will
Cost of care: should you consider it?
We all know that the cost of health care for individuals and governments is rising astronomically. (Have you been to the drug store lately?) Since the rhetoric of “death panels” emerged during recent elections, many people are reluctant to mention the cost of end-of-life treatment options. But cost is an inescapable reality, not just for dying patients but also for their survivors. In a 2011 national poll, cost ranked as the highest concern when people thought about end-of-life treatment. Contrary to the cliché about a group of people deciding to “let granny die because it is too expensive to keep her alive,” granny is well advised to create a living will so she can make decisions about the type of end-of-life care she wants, including whether she wants cost to be considered.
If the treatments cured terminal illnesses, cost would not be an important factor. If treatments restored an acceptable quality of life for a meaningful period of time, costs might be an important consideration, but not a decisive one. But when the treatments prolong lives with a quality that is often unacceptable to patients, costs should be factored into treatment decisions on par with taking patient distress into account. This is particularly true if, as often the case, the treatments are so expensive that they bankrupt the patient and possibly their families as well.
BLACK BOX WARNING
Here are just some of the economic realities:
Impact on individuals and their families
A 2012 study found that in the 5 years before death, out of pocket costs for the medical care of single individuals averaged $36,688 and $55,412 for married individuals
For 25% of the patients this exceeded total household assets and 43% of non-household assets
In 2007, illness or medical bills contributed to 62.1% of all bankruptcies
The Kaiser Family Foundation reported that 49 percent of American households would not have enough liquid assets to meet what their out-of-pocket obligations would be if they were in a plan with a $2,500 individual deductible and $5,000 family deductible
Impact on society
27.4% of the Medicare budget has traditionally been spent in the last year of life, 78% of these expenditures coming in the final month
Among the 1.8M Medicare beneficiaries who died in 2008, 31.9% underwent major surgery in the year before they died and 18.3% had a major inpatient procedure, often occurring in the last month or even week of their lives
Between the years of 2001 and 2005, 54% of the Medicare money was spent in hospitals, 15% in skilled nursing homes, and only 5% and 4% respectively on hospice and home health
1/3 of Medicare and Medicaid expenditures pay for only 5% of these deaths
1% of beneficiaries consume 21.8% of Medicare expenditures, or $90,061 per person
Approximately 78% of the cost of care in the final year of life is spent in the last month on high-intensity treatments that are associated with poor quality deaths , treatments that are likely to destroy the quality of lives they seek to extend
Deciding whether to consider cost is the easy part: finding out which good and procedures are covered by insurance and how much each costs before undergoing the treatment is far more difficult.
Many people over-estimate the goods and procedures covered by their insurance. For example 37% of those who responded to a 2013 survey believed incorrectly that Medicare pays for ongoing care in a nursing home and 44% believed that it pays for on-going care by a home health aid. In addition 58% underestimated the cost of nursing home care and only 35% set any money aside to pay for the long-term care they might need.
Predicting cost is an even greater challenge. The amount charged for a procedure is determined by the hospital or clinic chargemaster and by the professionals who deliver the service. The amount that insurance will reimburse for a procedure is the company’s decision.
Unfortunately chargemasters set many different prices for the same procedure and add institutional and disposable costs to that amount. In the same facility a blood transfusion might cost $500, $1500, $4500 or more. In addition to this procedure fee, you will also be expected to pay a facility fee that might also be $500, $1500, $4500 or more. And don't assume that the facility fee includes all of the disposables needed to offer the service, e.g. alcohol cleansing pad, needle, tubing, and covering for the gurney on which you will lie when the blood is infused: these will appear on a third set of charges on your bill. Nor should you assume that hospital charges are necessarily reasonable. A study of hospital charges in 2012 that was published in Health Affairs in 2015 found that the average US hospital charged 3.4 times the amount allowed by Medicare with the top 10% of hospitals, mostly under private auspices, charged 9.1 times the Medicare allowance. Since it is difficult to escape medical debts without declaring bankruptcy, whenever possible it is wise to do some hospital price comparisons before agreeing to recommended interventions.
Providers also have a range of fees for each service depending on such factors as when or where the service is delivered, how much follow-up care will be provided, and the amount of consultation with other professionals that will be required. As another surprise, you can be billed, if the service is provided by a professional who is not a member of your insurance company’s network, you can be charged 2 to as much as 10 times as the in-network fee. Just it is wise to decide which hospital to use, assuming that you have options, it is also wise to decide which provider to use, assuming the alternatives are equally qualified.
If you have health insurance, your company has many different agreements with institutions and providers, each of which reimburses the facilities and providers and you at different levels.
You might think that all you have to do is ask in advance how much the procedure will cost. But it is often the case that no one can tell you with any certainty, making it as difficult to understand the fees for a procedure as it is to understand the causes, course, and expected outcomes associated with your illness.
Nevertheless, you are not powerless. You can learn ballpark idea of common costs for the procedure you are considering by consulting any of several websites, a few of which are:
Healthcare Blue Book
FH Consumer Cost Lookup
American Society of Clinical Oncology
(framework for assessing the value of cancer drugs)
Assuming that you are conscious and not being transported in an emergency, you can contact the institution and provider to ask whether they will deliver the service for the amount that you are prepared to pay. You can also contact your health insurance company to learn how much of that charge will be reimbursable.
It used to be said that death and taxes were unavoidable. Today, people do have some success in avoiding taxes, so the adage has to be revised to “Two things are in life are unavoidable: death and medical bill sticker shock”.
A final thought. A survey conducted by AARP in 2013 reported that only one third of people in their 50s have even considered the potential cost of end-of-life care. When pressed, only 16% express confidence that they will be able to meet the probable costs. Although it is difficult to predict one's future health care needs, it is strongly advised that everyone do a little research to estimate a range of what the costs might be in light of any illnesses they already have and any that have been experienced by close family members who share their lifestyle (e.g. smoking, alcohol and drug use etc.).