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Health Care Costs and Financing

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Patient age has more influence on Medicare costs for end-of-life care than race, income, or sex

Medicare is the major payer for end-of-life health care. For two decades, care in the last year of life has represented over one-fourth of Medicare's budget. A new study supported by the Agency for Healthcare Research and Quality (HS10561) explored Medicare patient characteristics that influence expenditures in the 3 years prior to death and found age to be the major determinant of costs during this time.

For the study, the researchers analyzed Medicare data on a random sample of 241,047 Medicare patients who died during 1996 to 1999. They estimated differences in mean Medicare expenditures by year before death and by age, sex, race, and area income, after adjustment for coexisting illnesses and Medicaid enrollment.

Overall mean Medicare expenditures in years 2 and 3 before death were less than $10,000, but they rose to $24,700 in the last year of life (LYOL). Older Medicare patients had higher expenditures in the second and third years before death but lower expenditures in the LYOL. On average, expenditures for the youngest group were $8,017 more in the LYOL relative to the oldest group, whereas in the third year before death, expenditures for the oldest group were $5,270 more than those for the youngest group. Expenditure patterns for women versus men varied by age. Among the younger groups (68 to 74 years and 75 to 79 years), expenditures were higher for women than men in all 3 years before death. This difference was weaker among older groups; in the oldest group (90+ years), expenditures for men exceeded those for women by 11 percent in the LYOL.

The biggest differences in expenditures by sex, race, and area income occurred during the second and third years before death, and they became small or disappeared in the last year of life. For example, total annual Medicare expenditures for blacks were lower in the second and third years before death but were not significantly different from whites in the LYOL. Expenditure differences between decedents with area incomes over $35,000 compared with under $20,000 also weakened by the LYOL.

See "Differences in Medicare expenditures during the last 3 years of life," by Lisa R. Shugarman, Ph.D., Diane E. Campbell, Ph.D., Chloe E. Bird, Ph.D., and others, in the February 2004 Journal of General Internal Medicine 19, pp. 127-135.

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