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End-of-life healthcare expenditure: Testing economic explanations using a discrete choice experiment

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  • Fischer, Barbara
  • Telser, Harry
  • Zweifel, Peter

Abstract

Healthcare expenditure (HCE) spent during an individual’s last year of life accounts for a high share of lifetime HCE. This finding is puzzling because an investment in health is unlikely to have a sufficiently long payback period. However, Becker et al. (2007) and Philipson et al. (2010) have advanced a theory designed to explain high willingness to pay (WTP) for an extension of life close to its end. Their testable implications are complemented by the concept of ‘pain of risk bearing’ introduced by Eeckhoudt and Schlesinger (2006). They are tested using a discrete choice experiment performed in 2014, involving 1,529 Swiss adults. An individual setting where the price attribute is substantial out-of-pocket payment for a novel drug for treatment of terminal cancer is distinguished from a societal one, where it is an increase in contributions to social health insurance. Most of the economic predictions receive empirical support.

Suggested Citation

  • Fischer, Barbara & Telser, Harry & Zweifel, Peter, 2018. "End-of-life healthcare expenditure: Testing economic explanations using a discrete choice experiment," Journal of Health Economics, Elsevier, vol. 60(C), pages 30-38.
    • Handle: RePEc:eee:jhecon:v:60:y:2018:i:c:p:30-38
    DOI: 10.1016/j.jhealeco.2018.06.001
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    References listed on IDEAS

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    More about this item

    Keywords

    End-of-life healthcare expenditure; Terminal cancer; Societal willingness to pay; Health insurance;
    All these keywords.

    JEL classification:

    • C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J17 - Labor and Demographic Economics - - Demographic Economics - - - Value of Life; Foregone Income

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