As the health economist with President Reagan’s Council of Economic Advisers from 1982 to 1984, I was upset when I learned that a large percent of spending under Medicare is for people in their last 6 months of life. I understood even then that going in you can’t always know that it’s the last 6 months of life. Still, it made sense to me, assuming we’re stuck with socialized health insurance for the elderly, for the government to give the elderly who are clearly terminal a choice: If the cost of treatment is x, you can get treated at the government’s expense or the government will give you 0.5x and you don’t get treated at government expense. That would give people an incentive to husband those dollars. They could go without government treatment and spend the money on other things, including a bequest to heirs, or they could try to find cheaper treatment, possibly in places like India. People who took the money would gain and the government would say taxpayers’ money.
That still makes sense to me.
But something in my thinking has changed. It’s not that the proposal above doesn’t make sense. What’s changed is my view on the percent of people who would likely take the money rather than the government expenditure on their health care. I used to think it was high. Now I think it’s lower than I thought. I can’t easily put numbers on it, but it’s lower.
And what led to it has been my wife’s and my experience in the last few weeks with our cat Joey. That’s his picture above. He was the sweetest cat and he was more like a human in his interaction with us than any other cat we’ve had–and we have had a lot of very good cats.
A little over 2 years ago, we found out that Joey had small-cell lymphoma and that he had probably had it for at least the previous half year. We put him on chemotherapy; I posted about it here. The chemo seemed to work–and then didn’t. So our vet put him on a different chemo. It seemed to work and then stopped working about 8 months ago. We should have been aggressive and gone to a cat oncologist–yes there are such people–for a third kind of chemo that, we learned too late, did exist. We started him on it about a month or two ago, but lost about 6 months of valuable time.
Even with the chemo not working and Joey’s weight having dropped from over 16 pounds before his disease to under 9 pounds recently, Joey seemed to be Joey. We agreed that we wouldn’t keep him alive just for us if we thought he was miserable. But we saw enough signs that he wasn’t miserable.
Last Tuesday, though, we thought we had seen enough to take him to the vet and euthanize him. But the vet did enough checks on him that we still held out hope that he would live maybe a few weeks more with a reasonable quality of life. At each stage that day when they did tests, they asked our approval and gave us the price tag in advance. We left there with some hope–and a bill of just a hair under $1,000.
Yesterday, it was clear that Joey was miserable and so we took him to our regular vet to be euthanized.
Do I regret spending that $1,000? Yes. But that’s because I know now that he lasted only 2 extra days and was miserable for almost the whole 48 hours. If I had thought that Joey could have a quality life for an extra 2 weeks, would I have regretted spending that $1,000? No.
And that’s my new insight. The value of keeping Joey alive for a few extra weeks–and remember that he’s a cat, not a person–was at least $1,000.
So now I’ve altered my prior view of the value of keeping a human alive for a few extra weeks or months.
Of course, the issue is: value to whom? In the case of our cat, the value to us. For a human, the value to the human and to those around him or her. I’m not arguing for government subsidies. I’m saying simply that the value is likely higher than I had expected.
Two additional points.
First, the late Gary Becker and co-authors Kevin Murphy and Tomas Philipson have written on this issue for humans and come up with high numbers based on different considerations.
Second, when bloggers discuss health care, they often point to Robin Hanson’s claim that people spend so much on health care because they want to show that they care. The slogan might be “health care shows I care.” That’s not what’s going on here. We weren’t tying to demonstrate anything to Joey and I’m pretty confident my wife and I were on the same page and not trying to impress each other. We simply badly wanted another few weeks with this precious, precious cat.
READER COMMENTS
John Alcorn
Jan 11 2019 at 7:57pm
William Blake: “You never know what is enough unless you know what is more than enough.”
Joey, your wife, & you got lucky when you found one another. He had a good run. May you cherish the memories.
David Henderson
Jan 12 2019 at 8:54am
Thanks, John.
mike
Jan 12 2019 at 9:47am
I think one underrated point that supports your original assumption that a lot would take the 0.5x amount, is that in this case you are viewing it as the survivor/living person, and the dieing entity is a cat who can’t reason and express their opinion.
If a grandparent who was 86 had the chance to leave $100k to his grandchildren in lieu of living 5 months instead of 3, many would make that trade gladly. Many wouldn’t too. I think that is a really valuable point into how people would address the issue vs the case of the parents / grandkids which would be more like you were with the cat.
Amy Willis
Jan 13 2019 at 11:50am
As it turns out, this exact sort of (terribly difficult) choice was discussed this week on EconTalk in the context of health care and health insurance/spending. Just FYI if you haven’t had a chance to check it out yet.
Steven G Horwitz
Jan 12 2019 at 12:29pm
Suffice it to say that I too have a different view of these things these days, as my insurance company continues to spend a ridiculous amount of money to keep me alive. Of course we’re not talking weeks here, but hopefully years.
At the same time, I understand more than I ever have before why people just decide to stop treatment (0f themselves). I’m far from there yet, but it’s exhausting to constantly be in fight mode and never quite feel like yourself. But… I’m still here. I’m still loving, living, and working. Gonna take a lot more than where I am right now to get me to think it’s not worth it.
Yaakov
Jan 12 2019 at 4:47pm
Israel is known for its low health care expenditure while still having high health ratings. Healthcare is paid by the government and supplied by four health providers. The levels of healthcare are defined by the government. One of the things Israel does to reduce costs is that when the physicians give up they just stop and leave you on your own, sometimes without telling you in a manner that you really understand. I once read a complaint of a family whose relative was in a terminal state. They ran around after the doctors but could not get any answers. They finally went to the professor privately to get the answer that there is nothing that can be done.
I saw different people react differently. Three families with children with terminal cancer reacted very differently. One family just gave up and took the advice that there is no point on having their child suffer additional treatments which will not help. Another family went for some experimental and alternative treatments. I do not know how they paid for it, but when my wife offered money they did not accept. The third family went for an experimental treatment abroad. They managed a wide scale fund raising initiative to cover the costs. Sadly, the children all passed away. I do not know if the experimental treatments helped at all. They surely did not add more than several months. I do not know what I would do and hope I never meet the need to make such decisions.
Greg G
Jan 12 2019 at 4:59pm
David,
First of all, sorry for your loss of Joey. Pets really are part of the family. I used to laugh at friends who paid what I thought to be outlandish vet bills until my dog skipped a meal and I found myself at the local animal Hospital in the middle of the night doing a lot of tests and spending hundreds of dollars for what turned out to be nothing but a brief case of indigestion.
I have been a Hospice volunteer for over 20 years. Hospice patients consistently turn down expensive and desperate interventions when they are assured of good palliative care and fully informed about their options.
The surest way to get the wrong answer is to ask the wrong question. The wrong question to ask the doctor is “What else can you do?” The right question is “Would you want this if you were the patient?”
Robin Hanson is right about a lot of things but he is wrong about this. People spend so much (often too much) because they really do care. Families often want more treatments than patients. People are not great at figuring out cause and effect in complex systems in general. That goes double for health with all the accompanying emotions involved.
People aren’t always very good at predicting how they will react in situations they have never been in. It is said that Winston Churchill was once asked “Who would ever want to live to be 95?” He replied, “Every 94 year old I’ve ever met.” It is very common for Hospice patients with no more than a few weeks to live to start talking about what they will do next year if they have a couple good days. Not that there’s anything wrong with that.
I believe Hospice was added to Medicare benefits during the Reagan administration but was only reimbursed if certain curative treatments were discontinued. It was believed in good faith that paying for both would be too expensive. I don’t have the citation but I’m pretty sure there is some good research now showing that paying for Hospice treatments even while allowing curative attempts results in lower overall spending being chosen in the end by the patient and family. That is consistent with my 22 years of anecdotal observations.
David Henderson
Jan 12 2019 at 6:11pm
Greg G,
First of all, sorry for your loss of Joey.
Thanks.
I used to laugh at friends who paid what I thought to be outlandish vet bills until my dog skipped a meal and I found myself at the local animal Hospital in the middle of the night doing a lot of tests and spending hundreds of dollars for what turned out to be nothing but a brief case of indigestion.
I remember about 20 years ago saying to my wife that I would never pay more than $500 for medical care for a cat. The first chance we had to pierce that ceiling was a few years later, when the bill would be $700. I didn’t even blink. I vaguely recall that that particular expenditure did a lot for our cat’s health. It was somewhat after that that we figured out that we should get health insurance for our pets. We hit the lifetime limit with Joey about $2,500 ago.
The right question is “Would you want this if you were the patient?”
I don’t think that is the right question. It’s one of the right questions. When I was deciding whether to have my vasectomy in 1987 or 1988, my urologist was saying that the surgery was no big deal. “Ok,” I said, “would you be willing to have it done on you?” “Not in a million years,” he answered.
People are not great at figuring out cause and effect in complex systems in general. That goes double for health with all the accompanying emotions involved.
Right. And in that last vet visit on Tuesday, we had all of a minute or two to decide whether to have an X-ray and then whether to have an injection of chemotherapy.
Tom
Jan 12 2019 at 7:07pm
Many years ago my mother in law was dying. She was reconciled to her demise, was suffering and was ready. Instead of discussing options with her, some stupid clinician set up a family meeting to discuss things. There were about 10 people in the room. Given the decision in that setting, I have no doubt, she made the choice that she thought her kids would want. A nd in fact it was easier in the moment for the family to see aggressive measures pursued than to accept her death. So she had a horrible couple of weeks in the hospital
Cloud
Jan 14 2019 at 12:40am
Sorry for your loss. And thank you for you insighs.
My dog has lymphoma for the last 12 months. I have never thought about the economics lesson behind this valuable experience. Thank you so much for enlightening us on the issue.
Amy Willis
Jan 14 2019 at 9:08am
Sending my best thoughts for your dog… And you.
Here’s another account (based on human experience) you might be interested in.
Matthias Goergens
Jan 14 2019 at 10:22am
This is all fine from a psychological point of view. But shouldn’t the question be, for any given finite amount of public healthcare spending, what’s the most QALYs we can buy?
Phil
Jan 14 2019 at 5:45pm
Indeed, but to David’s point, who decides what the cost per QALY should be? When deciding on government health care expenditures, QALY is not an easily aggregated measure. And attempts to do so have proven politically infeasible as evidenced by the Oregon experiment in the 1990s-2000s. QALY appears regularly in the health economics literature as an academic discussion, but there is practically nothing in the applied public budgeting literature.
David Henderson
Jan 16 2019 at 5:40pm
Phil asks a good question. But with my policies in place, that question wouldn’t matter: people paying the bills, that is, the patients, their families, or the insurers, would decide. You might say “Why should insurers get to decide?” With my policies in place, people would choose their insurers.
Mark Bahner
Jan 15 2019 at 9:41am
Hi David,
I’m so sorry to read about Joey’s death.
You wrote:
I think there’s a significant difference there. Unless the photo of Joey is very old, he looks like a very young cat. With Medicare, the last 6 months of life are frequently for people in their 80s or 90s. So the people have already lived long lives. Also, with Medicare, any money that is spent on the last six months of life of people who are in their 80s or 90s is money that is not going to be spent on young people.
David Henderson
Jan 16 2019 at 5:44pm
Thanks, Mark.
Joey was 12. That picture was taken a few years before that. But you’re right that he didn’t make the usual we get to, which is about 17.
With Medicare, the last 6 months of life are frequently for people in their 80s or 90s.
True. My guess is that you’re younger than me. My gut feel is that when I’m in 90 (if I’m 90) and don’t have dementia, I will treasure each day. But hopefully we’ll see.
Also, with Medicare, any money that is spent on the last six months of life of people who are in their 80s or 90s is money that is not going to be spent on young people.
The money comes from government so it’s hard to know what it would have been spent on. Are taxes higher because of it? Then you get one answer. Or does the government finance it with debt, which likely means future taxes. Then the odds that it would have been spent not just on, but by, young people increase.
Hazel Meade
Jan 15 2019 at 12:11pm
The older I get the more sympathetic I become to the idea of legal assisted suicide. There are likely many, many people, who are destined to spend their last few months or even years in severe pain. I am not sure that I would want to live like that, or that my loved ones would want to put me through that. And yet the law effectively mandates that people endure extreme suffering it in their last months. Wouldn’t it be better to allow people to pass away on their own terms and spare their family having to witness their suffering? Wouldn’t we all breathe a little easier knowing that when the end comes, it won’t have to be a long, drawn out, painful death?
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