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The valuation of medical interventions at the end of life

English title The valuation of medical interventions at the end of life
Applicant Hintermann Beat
Number 145090
Funding scheme NRP 67 End of Life
Research institution Wirtschaftswissenschaftliche Fakultät Universität Basel
Institution of higher education University of Basel - BS
Main discipline Economics
Start/End 01.03.2013 - 28.02.2017
Approved amount 234'342.00
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Keywords (3)

value of life; end of life; health care

Lay Summary (German)

Lead
Das Projekt entwickelt eine Theorie für die Messung des Gesamtnutzens von lebensverlängernden Massnahmen. Die wichtigsten Grössen werden empirisch geschätzt und mit den dabei anfallenden Kosten verglichen. Das Projekt liefert ökonomische Grundlagen für die Regulierung von Gesundheitsleistungen am Lebensende.
Lay summary

Hintergrund

Industrialisierte Länder brauchen einen immer grösseren Anteil des Volkseinkommens für das Gesundheitswesen. Rund ein Viertel dieser Ausgaben fallen im letzten Lebensjahr an. Aufgrund herkömmlicher Bewertungsmethoden scheinen den hohen Ausgaben aber relativ geringer Nutzen in Form von zusätzlicher Lebenszeit (oft nur wenige Monate) oder höherer Lebensqualität gegenüberzustehen. Es stellt sich daher die Frage, ob und wie der Zugang zu lebensverlängernden Massnahmen rationiert werden soll.

Ziele

Im Zentrum steht die ökonomische Analyse der medizinischen Versorgung am Lebensende. Einerseits befasst sich das Projekt mit der theoretischen Valuierung von lebensverlängernden Massnahmen bei hohen Mortalitätsrisiken, da herkömmliche Methoden für die Einschätzung dieser Situation ungeeignet sind. Andererseits definiert das Projekt den Nutzen, der über die eigentliche Lebensverlängerung hinausgeht, z.B. die Weiterentwicklung von Medikamenten oder die Möglichkeit des Abschiednehmens von Familie und Freunden.

Bedeutung

Die im Projekt entwickelte Theorie dient als Grundlage für die empirische Ermittlung des relevantesten, direkten und indirekten Nutzens von lebensverlängernden Massnahmen, der den Kosten gegenübergestellt wird. Dazu werden Patientendaten (Diagnose, Behandlung und dazugehörende Kostenpauschalen) von Schweizer Krankenhäusern sowie Zeitreihen von Medikamentenpreisen verwendet. Eine Umfrage über die Zahlungsbereitschaft von Patienten, Angehörigen und Gesunden bei verschiedenen Eingriffen soll den nicht direkt messbaren Nutzen erfassen.

Die theoretischen und empirischen Resultate dieser Studie sind von Interesse für Gesundheitspolitiker, Krankenhäuser und Krankenkassen sowie für alle Mitglieder der Gesellschaft in ihrer Doppelfunktion als Prämienzahler und potentielle Bezüger von lebensverlängernden Leistungen.  

Direct link to Lay Summary Last update: 27.08.2013

Lay Summary (French)

Lead
Ce projet élabore une théorie permettant de mesurer le bénéfice global de mesures destinées à prolonger la vie. Les principales dimensions qui s’y rapportent sont évaluées empiriquement et comparées avec les coûts encourus. Le projet fournit des bases économiques à la réglementation de prestations de santé en fin de vie.
Lay summary

Contexte

Les pays industrialisés utilisent une part croissante de leurs revenus pour des prestations de santé. Environ un quart de ces dépenses de santé ont lieu au cours de la dernière année de vie. Les méthodes d’évaluation classiques ne semblent révéler qu’un bénéfice relativement faible en termes de longévité supplémentaire (souvent juste quelques mois) ou d’amélioration de la qualité de vie par rapport aux dépenses extrêmement élevées. On peut donc se demander s’il faudrait rationner l’accès aux mesures destinées à prolonger la vie et si oui, comment.

But

Au premier plan de ce projet, on trouve une analyse économique de la prise en charge médicale en fin de vie. Ce projet se penche d’une part sur l’évaluation théorique des mesures destinées à prolonger la vie dans le cas de risques de mortalité très élevés, car les méthodes classiques ne conviennent pas à l’évaluation d’une telle situation. D’autre part, il définit aussi le bénéfice allant au-delà du pur prolongement de la longévité, comme le progrès des médicaments ou la possibilité pour le mourant de faire ses adieux à sa famille et ses amis.

Portée

La théorie élaborée dans le cadre du projet sert de base à la détermination empirique du bénéfice pertinent, direct et indirect de mesures destinées à prolonger la vie et le met en regard des coûts. Nous utilisons à cet effet des données des patient-e-s d’hôpitaux suisses (diagnostic, traitement, tarifs forfaitaires appliqués) ainsi que des séries chronologiques de prix des médicaments. Afin de saisir le bénéfice non mesurable directement, nous allons mener une enquête sur la disposition des patient-e-s, des proches et des personnes en bonne santé à payer pour diverses interventions.

Les résultats théoriques et empiriques de cette étude sont intéressants pour les milieux politiques de la santé, les hôpitaux et les caisses-maladie, mais aussi pour tous les citoyens dans leur double fonction de payeurs de primes et de bénéficiaires potentiels d’interventions destinées à prolonger la vie.

Direct link to Lay Summary Last update: 27.08.2013

Lay Summary (English)

Lead
This project will develop a theory for assessment of the total utility of life-prolonging measures. The most important associated variables will be estimated empirically and compared with the costs incurred. The project will deliver economic bases for the regulation of health care services at the end of life.
Lay summary

Background

Industrialized countries are spending an increasing percentage of the national income on health. Approximately one-fourth of these health care costs are incurred in the last year of life. Based on traditional valuation methods, the very high costs appear to produce a very low benefit in the form of additional lifetime (often only a few months) or better quality of life. This raises the question as to whether and how access to life-prolonging measures should be rationed.

Aims

The central aim of this study is an economic analysis of medical care at the end of life. On the one hand, the project examines the theoretical valuation of life-prolonging medical interventions in cases with very high mortality risks, as traditional methods for assessing this are not appropriate. On the other hand, the project will define benefits that go beyond the actual prolonging of life, such as further development of drugs or the possibility to say goodbye to family and friends.

Significance

The theory developed in this project will serve as a basis for empirical estimation of the most important direct and indirect benefits of life-prolonging measures, which can be compared with the costs. The study will use patient data (diagnosis, treatment and the associated flat rate) from Swiss hospitals and time series of medication prices. To capture benefits that cannot be measured directly, a survey will be conducted with patients, family members and healthy persons on their willingness to pay the cost of various interventions.

The theoretical and empirical results of this study are of interest to health care policy makers, hospitals and health insurance providers but in the end for all members of society in their dual function as payers of premiums and potential recipients of life-prolonging health care services.

Direct link to Lay Summary Last update: 27.08.2013

Responsible applicant and co-applicants

Employees

Scientific events

Active participation

Title Type of contribution Title of article or contribution Date Place Persons involved
22nd Spring Meeting of Young Economists Talk given at a conference Hospital payment reform and treatment intensity at the end-of-life 23.03.2017 Halle, Germany Minke Matthias;
9. Jahrestagung der Deutschen Gesellschaft für Gesundheitsökonomie Talk given at a conference Why Life is so valuable at its End: Health Care Allocation in the Presence of Learning Spillovers 09.03.2017 Basel, Switzerland Minke Matthias;
21st Spring Meeting of Young Economists Talk given at a conference Allocation of health resources at the end-of-life: The case of learning spillovers 31.03.2016 Lisbon, Portugal Minke Matthias;
2nd EuHEA PhD student-supervisor and early career researcher (ECR) conference Poster Quantifying survival improvements per cost unit of hospital treatments in Switzerland 02.09.2015 Paris, France Minke Matthias; Hintermann Beat;
EuHEA PhD student-supervisor and early career researcher (ECR) conference Talk given at a conference Valuation of medical interventions at the end of life: The case of endogenous health technology and learning spillovers 01.09.2014 Manchester, Great Britain and Northern Ireland Hintermann Beat; Minke Matthias;
10th World Congress on Health Economics: Health Economics in the Age of Longevity Talk given at a conference Valuation of medical interventions at the end of life: The case of endogenous health technology and learning spillovers 14.07.2014 Dublin, Ireland Minke Matthias;


Abstract

Health care expenditure accounts for an increasing share of GDP in OECD countries, about a quarter of which occurs in the last 12 months of life. Medical spending at the end of life is therefore an important issue not only for patients and insurance companies, but also for public finance. Using traditional value of life measure, the disproportionate amount of health spending in the final year of life seems excessive, because relatively small gains in life years and quality of life are traded off against large costs. However, the value of a statistical life (VSL) is derived in the context of marginal risk changes and usually at very low levels of risk. In contrast, medical interventions at the end of life are often made in a context of near certain death in case of inaction, and the risk reduction is not marginal but discrete. In addition, there are important externalities associated with treating terminal care patients, such as utility to family members, spillovers to research and development, and the option value of living until a new treatment becomes available. For all these reasons, valuing medical interventions at the end of life by means of the VSL alone is inappropriate. We propose to investigate the value of end-of-life spending from a theoretical as well as an empirical perspective. We extend the decision-theoretical framework by Weinstein et al. (1980) to investigate potential nonlinearities in the willingness to pay (WTP) for a risk reduction by means of a medical intervention. Specifically, we focus on the WTP for a medical intervention at the transition from high to certain mortality risk, and from low to zero life years gained, and examine how this transition depends on altruism, a wish for a bequest, risk aversion, the presence of annuity and life insurance markets, as well as the quality of the life gained. In addition, we examine the normative implications of the possibility that people are willing to pay more for “known” (i.e. patients) as opposed to “statistical” lives, which has been suggested in the literature. This could be an argument for valuing end-of-life spending by more than implied by marginal ex-ante valuations. In order to obtain values for some of the parameters in our theoretical model we propose to carry out a contingent valuation (CV) study with a representative sample of the Swiss population. We will focus on the difference between discrete and marginal risk changes, ex-ante vs. ex-post valuation of terminal care interventions, altruistic preferences and the demand for annuities. Lastly, we will carry out an empirical study of end-of-life spending in Switzerland, using data from the Swiss medical statistics database. We will make use of the fact that hospitals rules and payment schemes vary across Cantons and time to identify the determinants for medical spending in the last year of life, and to evaluate the effectiveness of different payment schemes.
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