The Value of Life Near its End and Terminal Care
AbstractMedical care at the end of life, which is often is estimated to contribute up to a quarter of US health care spending, often encounters skepticism from payers and policy makers who question its high cost and often minimal health benefits. It seems generally agreed upon that medical resources are being wasted on excessive care for end-of-life treatments that often only prolong minimally an already frail life. However, though many observers have claimed that such spending is often irrational and wasteful, little explicit and systematic analysis exists on the incentives that determine end of life health care spending. There exists no positive theory that attempts to explain the high degree of end-of life spending and why differences across individuals, populations, or time occur in such spending. This paper attempts to provide the first rational and systematic analysis of the incentives behind end of life care. The main argument we make is that existing estimates of the value of a life year do not apply to the valuation of life at the end of life. We stress the low opportunity cost of medical spending near ones death, the importance of keeping hope alive in a terminal care setting, the larger social value of a life than estimated in private demand settings, as well as the insignificance in quality of life in lowering its value. We derive how an ex-ante perspective in terms of insurance and R&D alters some of these conclusions.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 13333.
Date of creation: Aug 2007
Date of revision:
Note: HC HE
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Web page: http://www.nber.org
More information through EDIRC
Other versions of this item:
- I1 - Health, Education, and Welfare - - Health
- I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
- I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
- I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
- I39 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Other
- J0 - Labor and Demographic Economics - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-08-27 (All new papers)
- NEP-HEA-2007-08-27 (Health Economics)
- NEP-IAS-2007-08-27 (Insurance Economics)
- NEP-LTV-2007-08-27 (Unemployment, Inequality & Poverty)
- NEP-SOC-2007-08-27 (Social Norms & Social Capital)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- David Meltzer, 1997. "Accounting for Future Costs in Medical Cost-Effectiveness Analysis," NBER Working Papers 5946, National Bureau of Economic Research, Inc.
- Alan M. Garber, 1999. "Advances in Cost-Effectiveness Analysis of Health Interventions," NBER Working Papers 7198, National Bureau of Economic Research, Inc.
- Tomas J. Philipson & Gary S. Becker, 1998. "Old-Age Longevity and Mortality-Contingent Claims," Journal of Political Economy, University of Chicago Press, vol. 106(3), pages 551-573, June.
- Weinstein, Milton C. & Manning, Willard Jr., 1997. "Theoretical issues in cost-effectiveness analysis," Journal of Health Economics, Elsevier, vol. 16(1), pages 121-128, February.
- Meltzer, David, 1997. "Accounting for future costs in medical cost-effectiveness analysis," Journal of Health Economics, Elsevier, vol. 16(1), pages 33-64, February.
- Becker, Gary S & Murphy, Kevin M, 1993. "A Simple Theory of Advertising as a Good or Bad," The Quarterly Journal of Economics, MIT Press, vol. 108(4), pages 941-64, November.
- Hausman, Jerry, 2000. "Efficiency Effects on the U.S. Economy from Wireless Taxation," National Tax Journal, National Tax Association, vol. 53(n. 3), pages 733-42, September.
- Johannesson, Magnus & Weinstein, Milton C., 1993. "On the decision rules of cost-effectiveness analysis," Journal of Health Economics, Elsevier, vol. 12(4), pages 459-467, December.
- Dormont, Brigitte, 2009.
"Les dépenses de santé : une augmentation salutaire ?,"
Opuscules du CEPREMAP,
CEPREMAP, number 15.
- Dormont, Brigitte, 2009. "Les dépenses de santé : une augmentation salutaire ?," Economics Papers from University Paris Dauphine 123456789/3883, Paris Dauphine University.
- Dormont, Brigitte, 2010. "Les dépenses de santé : une augmentation salutaire ?," Economics Papers from University Paris Dauphine 123456789/3865, Paris Dauphine University.
- Kuhn, Michael & Wrzaczek, Stefan & Oeppen, Jim, 2010. "Recognizing progeny in the value of life," Economics Letters, Elsevier, vol. 107(1), pages 17-21, April.
- Lakdawalla, Darius N. & Sun, Eric C. & Jena, Anupam B. & Reyes, Carolina M. & Goldman, Dana P. & Philipson, Tomas J., 2010.
"An economic evaluation of the war on cancer,"
Journal of Health Economics,
Elsevier, vol. 29(3), pages 333-346, May.
- Moscone, Francesco & Tosetti, Elisa & Costantini, Marco & Ali, Maged, 2013. "The impact of scientific research on health care: Evidence from the OECD countries," Economic Modelling, Elsevier, vol. 32(C), pages 325-332.
- David M. Cutler, 2008. "Are We Finally Winning the War on Cancer?," Journal of Economic Perspectives, American Economic Association, vol. 22(4), pages 3-26, Fall.
- Dana Goldman & Darius Lakdawalla & Tomas J. Philipson & Wesley Yin, 2010. "Valuing health technologies at nice: recommendations for improved incorporation of treatment value in HTA," Health Economics, John Wiley & Sons, Ltd., vol. 19(10), pages 1109-1116.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.