Any debate about health care policy isn’t complete without adequately addressing its third rail—end-of-life care—and the financial stress it puts on the Medicare budget.  

Total federal spending on health care eats up nearly 18 percent of the nation’s output, about double what most industrialized nations spend on health care. In 2011, Medicare spending reached close to $554 billion, which amounted to 21 percent of the total spent on U.S. health care in that year. Of that $554 billion, Medicare spent 28 percent, or about $170 billion, on patients’ last six months of life. 

“You can imagine someone thinking, ‘Wow, what a waste of money’,” said Leonard Fleck, professor of philosophy, medical ethics and health policy at Michigan State University. “The argument is that the government wants to save money by denying the elderly the health care they need. The truth is that rationing is inescapable if we’re going to control costs.”

To better understand the recent polarization of the issue, one must look no further than a 2009 comment by former Republican vice presidential candidate Sarah Palin, when she referred to a provision in the Affordable Health Care Act (ACA) that would have offered patients end-of-life consultations with their physicians as “death panels.” That comment, and the ensuing rhetoric surrounding it, forced the elimination of the provision from the ACA.

Palin’s comment “was focused on a valuable and sensible provision in the Medicare budget that would’ve encouraged doctors to talk with patients about their goals and preferences,” said David Casarett, M.D., director of hospice and palliative care at Penn Medicine Center for Bioethics. “It’s difficult to see anything objectionable about those sorts of conversations, and yet Palin succeeded in politicizing it for her own gain.”

While Palin’s reference to death panels mischaracterized the provision, it did have the effect of stoking the national debate about whether cost should be a factor in offering end-of-life medical treatment.   

“I think the issue of rationed care is a part of the premise behind the ACA in controlling costs,” and a negative outcome of the law, said Sally Pipes, president of the conservative Pacific Research Institute, which has spoken out against the ACA. Pipes points out that the full impact of the ACA won’t be realized until 2014, when most of the provisions are implemented. “Medical treatment decisions should be left up to doctors, patients and their families,” not dictated by a government cost-benefit analysis, Pipes said.

With technological advances in medicine, some patients are able to live longer, quality lives. The problem is that it’s difficult to predict which sick Medicare patient is going to die imminently, as opposed to miraculously getting better without lots of expensive care, Fleck said. That uncertainty puts pressure on physicians, often from patients’ family members, to take heroic measures to keep their loved ones alive, even when the chances of prolonged life are slim.

Financial Interest in the Debate

So, why did the comment about death panels gain so much traction? And are there parties that are financially invested in the ongoing financial costs for lengthy and expensive end-of-life care? These are questions analysts have asked to try to gain a better understanding of the debate.

Hospitals, contrary to what one might think, are typically not incented to keep Medicare patients for longer than necessary. In 1984, in an effort to curb the tendency of hospitals to fill their most expensive beds—those in intensive care units—Medicare put in place 720 diagnosis-related groups (DRGs). These DRGs dictate that Medicare will pay the hospital a fixed amount for different conditions, regardless of the number of days the patient is in the hospital.

"While some believe that hospitals could increase revenue by prolonging stays or increasing their intensity, the reality is that Medicare and Medicaid reimbursement formulas severely limit what can be collected on a DRG basis and established caps for almost all charges," said Julie Coffman, director at global management consulting firm Bain & Co., and a leader in their health care practice division. "The vast majority of providers we work with fully understand the imperative to eliminate spending that is not driving measurable improvements in quality outcomes, both clinically and in the realm of patient quality of life."

Some might argue that pharmaceutical companies have a big stake in patients’ last months of life. However, pharmaceutical companies typically prefer to invest research dollars on blockbuster drugs that treat chronic conditions.

“Although it’s true that drug manufacturers have an incentive to extend life as long as possible, just as insurance companies arguably have an incentive to do the opposite, it’s not clear that either of those constituencies is fueling the debate over end-of-life care,” Casarett said.

Some experts point out that the costs associated with end-of-life care are, by nature, going to be high because people seek medical treatment when they are sick, not when they are young and healthy. Thus, addressing unnecessary and unproductive medical interventions should be a priority, first and foremost, as part of an effort to provide the most comfortable experience as a patient approaches death.

“It could well be that this is one area where doing the right thing happens to be less expensive,” said Mildred Solomon, M.D., president of The Hastings Center, a nonpartisan bioethics research center.

A uniquely American attitude toward the management of death is also likely inflaming the debate, according to Daniel Callahan, research scholar and president emeritus at The Hastings Center. Health care policy has occupied much of the political arena’s focus for at least a decade. Rather, some analysts say, time and money would be better spent reforming the goals of medicine and focusing on preventative care that would create a higher quality of life without as many medical interventions, as well as palliative care at the end of life that would lessen symptoms and provide comfort.

“We have a culture that has bought into the idea that medicine is supposed to save your life,” Callahan said. “But no matter how (many) medical treatments we get, it’s never good enough because people eventually die. You can save them from one thing, but then death gets (them) one way or another. We’re not in a winnable war against death.”

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