Abstract
The aim of this paper is to investigate the expenditure incurred by health insurers arising from the provision of benefits during the 12 months preceding a beneficiary's death. Concern is expressed in parts of the international literature about the extent of resources directed towards those at the end of life, particularly given increased longevity and technological advancement. Two types of investigation are discussed : first, a comparison of costs in the last year of life with costs in earlier years prior to death and, second, a comparison of decedent and survivor costs within a calendar year. Within each investigation,further detailed analyses were performed with particular emphasis on the distribution of last-year-of life costs by age and category of expenditure. A South African dataset is used to illustrate the suggested methodology. The average cost in the last year of life is found to be 3.3 times higher than the average cost in the second last year of life. Average decedent costs are found to be 17.85 times higher than average survivor costs in 2012, on a risk-adjusted basis. The majority of these costs (83.35% in 2012) form part of the Prescribed Minimum Benefit package.
Highlights
There currently exists an extensive international body of research focusing on the examination of healthcare expenditures incurred by health insurance beneficiaries in their last year of life
These two findings illustrate the significant medical expenditure that health insurers incur on beneficiaries in their last year of life
These findings reveal that the significance of costs in the last year of life has increased since the investigation by Moodley and McLeod (2001)
Summary
There currently exists an extensive international body of research focusing on the examination of healthcare expenditures incurred by health insurance beneficiaries in their last year of life. More than four decades later this topic is still of great interest to members of the global healthcare industry These studies have been driven by concerns over the effect of ageing (leading to the postponement of death) on healthcare expenditure (Breyer & Felder, 2006), as well as the need to predict future expenditure in light of technological advancements and the increase in demand for medical care (Stearns & Norton, 2004). The average last-year-of-life costs are compared with the average costs in preceding years before death with the aim of investigating the relationships that exist between them This part of the investigation makes similar comparisons according to category of healthcare expenditure and age at death. The disease grouper system considered is the Adjusted Clinical Groups (ACGs) system
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