The Cost of Health Care - Patients With Terminal Diseases

Terminal patients often receive high-technology intensive care that simply prolongs the dying process. Studies

TABLE 9.12
Nursing home residents 65 years of age and over, by age, sex, and race, selected years 1973–99
[Data are based on a sample of nursing home residents]

	Residents				Residents per 1,000 population
Age, sex, and race	1973–74	1985	1995	1999	1973–74	1985	1995	1999
Age
65 years and over, age adjusted¹	…	…	…	…	58.5	54.0	45.9	43.3
65 years and over, crude	961,500	1,318,300	1,422,600	1,469,500	44.7	46.2	42.4	42.9
65–74 years	163,100	212,100	190,200	194,800	12.3	12.5	10.1	10.8
75–84 years	384,900	509,000	511,900	517,600	57.7	57.7	45.9	43.0
85 years and over	413,600	597,300	720,400	757,100	257.3	220.3	198.6	182.5
Male
65 years and over, age adjusted¹	…	…	…	…	42.5	38.8	32.8	30.6
65 years and over, crude	265,700	334,400	356,800	377,800	30.0	29.0	26.1	26.5
65–74 years	65,100	80,600	79,300	84,100	11.3	10.8	9.5	10.3
75–84 years	102,300	141,300	144,300	149,500	39.9	43.0	33.3	30.8
85 years and over	98,300	112,600	133,100	144,200	182.7	145.7	130.8	116.5
Female
65 years and over, age adjusted¹	…	…	…	…	67.5	61.5	52.3	49.8
65 years and over, crude	695,800	983,900	1,065,800	1,091,700	54.9	57.9	53.7	54.6
65–74 years	98,000	131,500	110,900	110,700	13.1	13.8	10.6	11.2
75–84 years	282,600	367,700	367,600	368,100	68.9	66.4	53.9	51.2
85 years and over	315,300	484,700	587,300	612,900	294.9	250.1	224.9	210.5
White²
65 years and over, age adjusted¹	…	…	…	…	61.2	55.5	45.4	41.9
65 years and over, crude	920,600	1,227,400	1,271,200	1,279,600	46.9	47.7	42.3	42.1
65–74 years	150,100	187,800	154,400	157,200	12.5	12.3	9.3	10.0
75–84 years	369,700	473,600	453,800	440,600	60.3	59.1	44.9	40.5
85 years and over	400,800	566,000	663,000	681,700	270.8	228.7	200.7	181.8
Black or African American²
65 years and over, age adjusted¹	…	…	…	…	28.2	41.5	50.4	55.6
65 years and over, crude	37,700	82,000	122,900	145,900	22.0	35.0	45.2	51.1
65–74 years	12,200	22,500	29,700	30,300	11.1	15.4	18.4	18.2
75–84 years	13,400	30,600	47,300	58,700	26.7	45.3	57.2	66.5
85 years and over	12,100	29,000	45,800	56,900	105.7	141.5	167.1	183.1
… Category not applicable.
¹Age adjusted by the direct method to the year 2000 population standard using the following three age groups: 65–74 years, 75–84 years, and 85 years and over.
²Beginning in 1999 the instruction for the race item on the Current Resident Questionnaire was changed so that more than one race could be recorded. In previous years only one racial category could be checked. Estimates for racial groups presented in this table are for residents for whom only one race was recorded. Estimates for residents where multiple races were checked are unreliable due to small sample sizes and are not shown.
Notes: Excludes residents in personal care or domiciliary care homes. Age refers to age at time of interview. Civilian population estimates used to compute rates for the 1990s are 1990-based postcensal estimates, as of July 1.
SOURCE: "Table 96. Nursing Home Residents 65 Years of Age and Over, according to Age, Sex, and Race: United States, 1973–74, 1985, 1995, and 1999," in Health, United States, 2003, Centers for Disease Control and Prevention, National Center for Health Statistics, National Vital Statistics System, Hyattsville, MD, 2003

by the Health Care Financing Administration (HCFA; now the CMS) found that "medical services generally become much more intense as death approaches." In the United States the fear of malpractice suits, physicians' training to fight death to the end, and government reimbursement encourage continued medical care at all costs.

Acquired Immunodeficiency Syndrome

The incidence of deaths due to AIDS showed a marked decline from 1993 to 2001. AIDS is a syndrome—a set of signs, symptoms, and certain diseases occurring together when the immune system of a person infected with HIV becomes extremely weakened. HIV/AIDS continues to infect and kill members of the American population. In 2002, 42,745 new cases of HIV infection were reported to the Centers for Disease Control and Prevention (CDC). In 2001, 14,175 people died of AIDS. Cumulatively, the CDC estimates that, through 2002, 886,575 people in the United States have been diagnosed with AIDS, and 501,669 have died from the disease.

In 2002 the federal government spent nearly $15 billion on research, education and prevention, medical care, and cash assistance for HIV/AIDS patients—a seventy-two-fold increase over the $209 million spent in 1985. More than half (61 percent, or $9.1 billion) was spent on medical care. (See Table 9.13.) The per-person cost of AIDS medication was between $12,000 and $70,000 annually, depending on the patient's drug regimen. The costs of treatment are expected to increase in response to the rising costs of hospitalization, home health care, physician services, and insurance premiums and co-payments.

MEDICAID ASSISTANCE.

The financing of health care for AIDS patients has increasingly become the responsibility of Medicaid, the entitlement program that provides FIGURE 9.3
Growth in the number and percent of Medicare beneficiaries with disabilities or end stage renal disease, 1970–2030 medical assistance to low-income Americans. This is due, in large part, to the rising incidence of AIDS among poor people and intravenous drug users—the groups least likely to have private health insurance. Further, many patients who might once have had private insurance through their employers lose their coverage when they become too ill to work. These individuals eventually turn to Medicaid and other public programs for medical assistance.

Some people, whose employment and economic condition previously afforded the insurance coverage they needed, find their situation changed once they test positive for HIV. Some may become virtually ineligible for private health insurance coverage. Others require government assistance because insurance companies can declare HIV infection a "pre-existing condition," making it ineligible for payment of insurance claims. In addition, some insurance companies limit AIDS coverage to relatively small amounts.

THE RYAN WHITE COMPREHENSIVE AIDS RESOURCES EMERGENCY (CARE) ACT.

Currently, the CARE Act (PL 101-381) is the only federal program providing funds specifically for medical and support services for HIV/AIDS patients. It was initially passed in 1990 and was reauthorized in 1996 and 2000. Appropriations of CARE funds follow one of four formulas:

Under the Title I formula, the federal government provides emergency assistance to metropolitan areas disproportionately affected by the HIV epidemic. To qualify for Title I financing, eligible metropolitan areas (EMAs) must have more than 2,000 cumulative AIDS cases reported during the preceding five years and a population of at least 500,000. In fiscal year (FY) 2004, 51 EMAs in 21 states, the District of Columbia, and Puerto Rico received more than $595 million. (See Table 9.14.)
Under the Title II formula, funds are provided to state governments. Ninety percent of Title II funds are allocated based on AIDS patient counts, while 10 percent are distributed through competitive grants to public and nonprofit agencies. Since FY 1991, states have received nearly $3.3 billion. In addition, states receive funding to support AIDS Drug Assistance Programs (ADAPs), which provide medication to low-income HIV patients who are uninsured or underinsured. In 2004 alone, the federal government provided slightly more than $728 million for ADAPs funds and approximately $302 million for improved health care and support services for HIV/AIDS patients, totaling more than $1 billion. (See Table 9.15.)
Title III funds are designated for Early Intervention Services (EIS) and Planning. EIS grants support out-patient HIV services for low-income people in existing primary care systems, and Planning grants aid those working to develop HIV primary care.
Title IV programs focus on the development of assistance for women, infants, and children.

Cancer

Cancer, in all its forms, is very expensive to treat. Compared to other diseases, there are more options for cancer treatment, more adverse side effects that require treatment, and a greater potential for unrelieved pain. According to the American Cancer Society, hospitalization accounts for about 76 percent of cancer expenditures, while physician and other medical fees account for 18 percent.

Generally, the younger a cancer patient is, the higher the treatment cost. Younger people often fight the disease longer than older people. Most of these expenses occur at the end of life. Hospitalization for the initial phase of treatment costs only 38 percent as much as terminal care. In addition, physician charges for terminal care may be as much as three times higher than charges for initial treatment.

Some experts claim that if more cancer patients were offered hospice care or provided for advance directives limiting futile treatment—especially high-technology medical interventions—the costs of end-of-life cancer care would be dramatically reduced.

MEDICARE, CLINICAL TRIALS, AND CANCER.

Younger patients historically have had greater access to the newest

TABLE 9.13
Federal spending for human immunodeficiency virus (HIV)-related activities, by agency and type of activity, selected fiscal years 1985–2002
[Data are compiled from federal government appropriations]

Agency and type of activity	1985	1990	1995	1998	1999	2000	2001	2002¹
Agency	Amount in millions
All federal spending	209	$3,070	$7,019	$9,689	$10,779	$12,025	$14,184	$14,988
Department of Health and Human Services, total	201	2,372	5,200	7,537	8,494	9,621	11,406	12,039
Department of Health and Human Services discretionary spending, total²	109	1,592	2,700	3,537	4,094	4,546	5,226	5,789
National Institutes of Health	66	908	1,334	1,603	1,793	2,004	2,247	2,499
Substance Abuse and Mental Health Services Administration	–	50	24	66	92	110	157	169
Centers for Disease Control and Prevention	33	443	590	625	657	687	859	931
Food and Drug Administration	9	57	73	77	70	76	76	76
Health Resources and Services Administration	–	113	661	1,155	1,416	1,599	1,815	1,917
Ricky Ray Hemophilia Relief Fund³	…	…	…	…	…	75	580	…
Agency for Healthcare Research and Quality	–	8	9	2	2	2	3	3
Office of the Secretary⁴	–	10	6	7	12	13	15	14
Indian Health Service	–	3	4	4	4	4	4	4
Emergency Fund	…	…	…	…	50	50	50	50
Global AIDS Trust Fund	…	…	…	…	…	…	…	125
Centers for Medicare & Medicaid Services	75	780	2,500	4,000	4,400	5,000	5,600	6,250
Social Security Administration⁵	17	…	…	…	…	…	…	…
Social Security Administration⁵	…	239	881	1,092	1,158	1,240	1,259	1,351
Department of Veterans Affairs	8	220	317	378	401	345	405	391
Department of Defense	–	124	110	95	86	97	108	96
Agency for International Development	–	71	120	121	139	200	430	510
Department of Housing and Urban Development	–	–	171	204	225	232	257	277
Office of Personnel Management	–	37	212	253	266	279	292	297
Other departments	–	7	8	9	10	11	27	27
Activity
Research	75	1,013	1,460	1,727	1,900	2,125	2,368	2,614
Department of Health and Human Services discretionary spending²	75	974	1,417	1,682	1,869	2,085	2,328	2,580
Department of Veterans Affairs	–	6	5	7	7	7	7	8
Department of Defense	–	33	38	38	24	33	33	26

experimental drugs or procedures, in part because some health plans have been willing to cover all or a portion of the costs associated with clinical trials (research studies that offer promising new anti-cancer drugs and treatment to patients enrolled). Policies vary, and some plans decide whether they will pay for clinical trials on a case-by-case basis. Some health plans limit coverage to patients for whom no standard therapy is available. Others cover clinical trials only if they are not much more expensive than standard treatment, and many choose not to cover any costs involved with clinical trials.

On June 7, 2000, President Bill Clinton revised Medicare payment policies to enable beneficiaries to participate in clinical trials. Prior to this policy change, many older adults were prevented from participating in clinical trials because they could not afford the costs associated with the trials.

Alzheimer's Disease (AD)

Liese E. Hebert, et al., in "Alzheimer Disease in the U.S. Population: Prevalence Estimates Using the 2000 Census" (Archives of Neurology, vol. 60, no. 8, August 2003) estimate that in 2000 there were 4.5 million persons with Alzheimer's Disease (AD) in the U.S. population. AD is a form of dementia characterized by memory loss, behavior and personality changes, and decreasing thinking abilities. Care and treatment of those suffering from dementia cost the United States as much as $100 billion each year.