Academic journal article Applied Health Economics and Health Policy

The Importance of Proximity to Death in Modelling Community Medication Expenditures for Older People: Evidence from New Zealand

Academic journal article Applied Health Economics and Health Policy

The Importance of Proximity to Death in Modelling Community Medication Expenditures for Older People: Evidence from New Zealand

Article excerpt

Published online: 21 August 2014

© Springer International Publishing Switzerland 2014

Abstract

Background Concerns about the long-term sustainability of health care expenditures (HCEs), particularly prescribing expenditures, has become an important policy issue in most developed countries. Previous studies suggest that proximity to death (PTD) has a significant effect on total HCEs, with its exclusion leading to an overestimation of likely growth. There are limited studies of pharmaceutical expenditures in which PTD is taken into account.

Objective This study presents an empirical analysis of public medication expenditure on older individuals in New Zealand (NZ). The aim of the study was to examine the individual effects of age and PTD using individual-level data.

Methods This study uses individual-level dispensing data from 2008/2009 covering the whole population of medication users aged 70 years or older and resident in NZ. A case-control methodology was used to examine individual cost and medication use for a 12-month period for decedents (cases) and survivors (controls). A random effects two-part model, with a Probit and generalized linear model (GLM) was used to explore the effect of age and PTD on expenditures.

Results The impact of PTD on prescription expenditure is not as dramatic as studies reporting on acute and/or long-term care. The 12-month decedent-to-survivor mean expenditure ratio was 1.95; 2.09 for males and 1.82 for females. The additional cost of dying in terms of prescription drugs decreases with age, with those who die at 90 years of age or older consuming fewer drugs on average and having a lower mean expenditure than those who died in their 70s and 80s. The following variables were found to have a decreasing effect on the mean monthly prescription expenditures: a reduction of 2.2 % for each additional year of age, 4.2 % being in the Maori ethnic group, and 7.8 % for Pacific Islanders. Increases in monthly expenditure were associated with being a decedent 32.1-62.6 % (depending on month), being of Asian origin 16.2 %, or being a male 12.6 %.

Conclusions Given the variance reported between survivors and decedents, future projections should include PTD in their models to improve accuracy. Policies targeted at reducing expenditures should not focus on age but on ensuring appropriate and cost-effective prescribing, particularly towards the end of life.

(ProQuest: ... denotes formulae omitted.)

1 Introduction and Background

Concerns about the long-term sustainability of increasing healthcare expenditure has become an important policy issue in most developed countries. Such growth is increasing pressure on government budgets, healthcare providers and individuals. Understanding drivers of this growth should enable us to more accurately forecast future expenditures and inform appropriate policies. The New Zealand (NZ) population over 65 years of age is predicted to more than double in the next two decades, similar to the majority of other developed countries [1, 2]. In addition, the working population (15-64 years) will only increase marginally [1, 2], or even decline [2], leading to an increase in the old-age dependency ratio of those aged 70 years or more to those aged 15-64 years [2, 3]. As a result of this demographic shift, a reduced proportion of the population will be supporting an increased older popula- tion. Policy makers in NZ and other developed countries with similar ageing populations are concerned about a significant health care cost increase associated with the anticipated population shift.

Studies frequently associate ageing with higher health care costs relative to the younger population [4, 5]. While age may be important to an extent, Fuchs [6] proposed the idea of proximity to death (PTD) having an important positive effect on health care costs. The premise being, the closer someone is to death, the more health care resources they use, resulting in higher health care expenditure (HCE). …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.