IDEAS home Printed from https://ideas.repec.org/a/eee/jhecon/v60y2018icp30-38.html
   My bibliography  Save this article

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

Author

Listed:
  • 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
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S016762961730437X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jhealeco.2018.06.001?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Amy Finkelstein & Erzo F. P. Luttmer & Matthew J. Notowidigdo, 2009. "Approaches to Estimating the Health State Dependence of the Utility Function," American Economic Review, American Economic Association, vol. 99(2), pages 116-121, May.
    2. Michael Clark & Domino Determann & Stavros Petrou & Domenico Moro & Esther Bekker-Grob, 2014. "Discrete Choice Experiments in Health Economics: A Review of the Literature," PharmacoEconomics, Springer, vol. 32(9), pages 883-902, September.
    3. Stirling Bryan & Paul Dolan, 2004. "Discrete choice experiments in health economics," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 5(3), pages 199-202, September.
    4. Chris Skedgel & Allan Wailoo & Ron Akehurst, 2015. "Societal Preferences for Distributive Justice in the Allocation of Health Care Resources," Medical Decision Making, , vol. 35(1), pages 94-105, January.
    5. Hirshleifer,Jack & Glazer,Amihai & Hirshleifer,David, 2005. "Price Theory and Applications," Cambridge Books, Cambridge University Press, number 9780521523424, October.
    6. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    7. Mickael Bech & Dorte Gyrd‐Hansen, 2005. "Effects coding in discrete choice experiments," Health Economics, John Wiley & Sons, Ltd., vol. 14(10), pages 1079-1083, October.
    8. Louis Eeckhoudt & Harris Schlesinger, 2006. "Putting Risk in Its Proper Place," American Economic Review, American Economic Association, vol. 96(1), pages 280-289, March.
    9. James Andreoni & Charles Sprenger, 2012. "Estimating Time Preferences from Convex Budgets," American Economic Review, American Economic Association, vol. 102(7), pages 3333-3356, December.
    10. Tomas J. Philipson & Gary Becker & Dana Goldman & Kevin M. Murphy, 2010. "Terminal Care and The Value of Life Near Its End," NBER Working Papers 15649, National Bureau of Economic Research, Inc.
    11. Emily Lancsar & Jordan Louviere, 2006. "Deleting ‘irrational’ responses from discrete choice experiments: a case of investigating or imposing preferences?," Health Economics, John Wiley & Sons, Ltd., vol. 15(8), pages 797-811, August.
    12. Laitner, John & Ohlsson, Henry, 2001. "Bequest motives: a comparison of Sweden and the United States," Journal of Public Economics, Elsevier, vol. 79(1), pages 205-236, January.
    13. Zweifel, Peter & Manning, Willard G., 2000. "Moral hazard and consumer incentives in health care," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 8, pages 409-459, Elsevier.
    14. Gary Becker & Kevin Murphy & Tomas Philipson, 2007. "The Value of Life Near its End and Terminal Care," Levine's Working Paper Archive 122247000000001428, David K. Levine.
    15. Philip J. Cook & Daniel A. Graham, 1977. "The Demand for Insurance and Protection: The Case of Irreplaceable Commodities," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 91(1), pages 143-156.
    16. Louviere,Jordan J. & Hensher,David A. & Swait,Joffre D. With contributions by-Name:Adamowicz,Wiktor, 2000. "Stated Choice Methods," Cambridge Books, Cambridge University Press, number 9780521788304, October.
    17. Liesbet Wetering & Job Exel & Ana Bobinac & Werner Brouwer, 2015. "Valuing QALYs in Relation to Equity Considerations Using a Discrete Choice Experiment," PharmacoEconomics, Springer, vol. 33(12), pages 1289-1300, December.
    18. Peter Zweifel & Stefan Felder & Markus Meiers, 1999. "Ageing of population and health care expenditure: a red herring?," Health Economics, John Wiley & Sons, Ltd., vol. 8(6), pages 485-496, September.
    19. Andreoni, James, 1990. "Impure Altruism and Donations to Public Goods: A Theory of Warm-Glow Giving?," Economic Journal, Royal Economic Society, vol. 100(401), pages 464-477, June.
    20. Tomas J. Philipson & Gary Becker & Dana Goldman & Kevin M. Murphy, 2010. "Terminal Care and The Value of Life Near Its End," NBER Working Papers 15649, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Alene Sze Jing Yong & Yi Heng Lim & Mark Wing Loong Cheong & Ednin Hamzah & Siew Li Teoh, 2022. "Willingness-to-pay for cancer treatment and outcome: a systematic review," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 23(6), pages 1037-1057, August.
    2. Dickie, Mark & Adamowicz, Wiktor & Gerking, Shelby & Veronesi, Marcella, 2022. "Risk Perception, Learning, and Willingness to Pay to Reduce Heart Disease Risk," Journal of Benefit-Cost Analysis, Cambridge University Press, vol. 13(3), pages 363-382, October.
    3. Peter Zweifel, 2020. "The COVID‐19 crisis: A public choice view," Economic Affairs, Wiley Blackwell, vol. 40(3), pages 395-405, October.
    4. Genie, Mesfin G. & Nicoló, Antonio & Pasini, Giacomo, 2020. "The role of heterogeneity of patients’ preferences in kidney transplantation," Journal of Health Economics, Elsevier, vol. 72(C).
    5. Ola Andersson & Pol Campos‐Mercade & Fredrik Carlsson & Florian H. Schneider & Erik Wengström, 2022. "The impact of stay‐at‐home policies on individual welfare," Scandinavian Journal of Economics, Wiley Blackwell, vol. 124(2), pages 340-362, April.
    6. Janina Nemitz, 2022. "Increasing longevity and life satisfaction: is there a catch to living longer?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 35(2), pages 557-589, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Haghani, Milad & Bliemer, Michiel C.J. & Hensher, David A., 2021. "The landscape of econometric discrete choice modelling research," Journal of choice modelling, Elsevier, vol. 40(C).
    2. Emily Lancsar & Jordan Louviere, 2008. "Conducting Discrete Choice Experiments to Inform Healthcare Decision Making," PharmacoEconomics, Springer, vol. 26(8), pages 661-677, August.
    3. Cao, Ying (Jessica) & Cranfield, John & Chen, Chen & Widowski, Tina, 2021. "Heterogeneous informational and attitudinal impacts on consumer preferences for eggs from welfare enhanced cage systems," Food Policy, Elsevier, vol. 99(C).
    4. Zweifel Peter & Courbage Christophe, 2016. "Long-Term Care: Is There Crowding Out of Informal Care, Private Insurance as Well as Saving?," Asia-Pacific Journal of Risk and Insurance, De Gruyter, vol. 10(1), pages 107-132, January.
    5. Colin Green & Karen Gerard, 2009. "Exploring the social value of health‐care interventions: a stated preference discrete choice experiment," Health Economics, John Wiley & Sons, Ltd., vol. 18(8), pages 951-976, August.
    6. Krucien, Nicolas & Heidenreich, Sebastian & Gafni, Amiram & Pelletier-Fleury, Nathalie, 2020. "Measuring public preferences in France for potential consequences stemming from re-allocation of healthcare resources," Social Science & Medicine, Elsevier, vol. 246(C).
    7. Haghani, Milad & Bliemer, Michiel C.J. & Rose, John M. & Oppewal, Harmen & Lancsar, Emily, 2021. "Hypothetical bias in stated choice experiments: Part I. Macro-scale analysis of literature and integrative synthesis of empirical evidence from applied economics, experimental psychology and neuroimag," Journal of choice modelling, Elsevier, vol. 41(C).
    8. Meng Li & Anirban Basu & Caroline S. Bennette & David L. Veenstra & Louis P. Garrison, 2019. "Do cancer treatments have option value? Real‐world evidence from metastatic melanoma," Health Economics, John Wiley & Sons, Ltd., vol. 28(7), pages 855-867, July.
    9. Hansen, Lise Desireé & Kjær, Trine, 2019. "Disentangling public preferences for health gains at end-of-life: Further evidence of no support of an end-of-life premium," Social Science & Medicine, Elsevier, vol. 236(C), pages 1-1.
    10. Peter Zweifel, 2022. "Preference measurement in health using experiments," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 30(1), pages 49-66, March.
    11. Stefano DellaVigna & Devin Pope, 2018. "What Motivates Effort? Evidence and Expert Forecasts," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 85(2), pages 1029-1069.
    12. Mickael Bech & Trine Kjaer & Jørgen Lauridsen, 2011. "Does the number of choice sets matter? Results from a web survey applying a discrete choice experiment," Health Economics, John Wiley & Sons, Ltd., vol. 20(3), pages 273-286, March.
    13. Emily Lancsar & Denzil G. Fiebig & Arne Risa Hole, 2017. "Discrete Choice Experiments: A Guide to Model Specification, Estimation and Software," PharmacoEconomics, Springer, vol. 35(7), pages 697-716, July.
    14. Peyron, Christine & Pélissier, Aurore & Béjean, Sophie, 2018. "Preference heterogeneity with respect to whole genome sequencing. A discrete choice experiment among parents of children with rare genetic diseases," Social Science & Medicine, Elsevier, vol. 214(C), pages 125-132.
    15. Chiara Seghieri & Alessandro Mengoni & Sabina Nuti, 2014. "Applying discrete choice modelling in a priority setting: an investigation of public preferences for primary care models," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 15(7), pages 773-785, September.
    16. Mandeville, Kate L. & Ulaya, Godwin & Lagarde, Mylène & Muula, Adamson S. & Dzowela, Titha & Hanson, Kara, 2016. "The use of specialty training to retain doctors in Malawi: A discrete choice experiment," Social Science & Medicine, Elsevier, vol. 169(C), pages 109-118.
    17. Trey Malone & Jayson L. Lusk, 2019. "Releasing The Trap: A Method To Reduce Inattention Bias In Survey Data With Application To U.S. Beer Taxes," Economic Inquiry, Western Economic Association International, vol. 57(1), pages 584-599, January.
    18. Bansback, Nick & Brazier, John & Tsuchiya, Aki & Anis, Aslam, 2010. "Using a discrete choice experiment to estimate societal health state utility values," MPRA Paper 29933, University Library of Munich, Germany.
    19. repec:dau:papers:123456789/6796 is not listed on IDEAS
    20. Eileen Tipoe & Abi Adams & Ian Crawford, 2022. "Revealed preference analysis and bounded rationality [Consume now or later? Time inconsistency, collective choice and revealed preference]," Oxford Economic Papers, Oxford University Press, vol. 74(2), pages 313-332.
    21. Shah, Koonal K. & Tsuchiya, Aki & Wailoo, Allan J., 2018. "Valuing health at the end of life: A review of stated preference studies in the social sciences literature," Social Science & Medicine, Elsevier, vol. 204(C), pages 39-50.

    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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jhecon:v:60:y:2018:i:c:p:30-38. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/505560 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.