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Maybe you have heard the refrain before: The U.S. spends too much money on the dying. Every year, 5 percent of Medicare beneficiaries die, but one-quarter of spending occurs in the last year of life. Side by side, these stats have fed a widely held belief that, in an exorbitantly expensive health care system, much of end-of-life care goes to waste.

A new study, published in the journal Science, pushes back on this notion. The researchers, a team of three economists and one physician, used machine learning to predict mortality and re-examine spending. In their new estimate, patients with the highest one-year mortality risk account for less than 5 percent of spending, much less than the original one-quarter claim.


But the conclusion that most surprised author and Massachusetts Institute of Technology economist Amy Finkelstein: Death is highly unpredictable.

Before their analysis, Finkelstein and her co-authors at Stanford, Harvard, and the National Bureau of Economic Research thought that patients who die within the year would have had extremely high mortality risks at the time of hospital admission. Instead, the data revealed that patients in the group with the steepest risk still were slightly more likely to survive the year than not. Even with rich data and sophisticated algorithms, predicting life and death has odds similar to flipping heads or tails.

“We spend money on sick people — some of them die, some of them recover,” Finkelstein said in an interview. “Maybe some recover, in part, because of what we spent on them.”


If neither physicians in the hospital nor economists behind the scenes can predict death with some degree of certainty, are resources really wasted on providing care?

Implicit in the dialogue about wasting money in the last year of life is the assumption that there is a good way to distinguish the sick and dying patient from the sick patient who will survive.

Imagine you paid $5 at a parking meter on a Sunday, unaware that street parking is free on weekends. If you happened to miss the giant, neon sign that reads “free parking,” then you wasted five bucks. If, on the other hand, there was no such sign, then it would have been impossible to know, when feeding the meter, that your payment went to waste. Similarly, if a physician who opts to keep a patient in the ICU on a ventilator for $1,500 per day is unable to predict her patient’s fate, the care is less decidedly inefficient.

“Just because someone is seriously ill with an uncertain prognosis doesn’t mean that their health care spending is wasteful,” said Dr. Stephanie Harman, who works in palliative care and biomedical ethics at Stanford.

Harman was not involved in the new research but has also applied machine learning techniques in her field to identify patients who may benefit from palliative care interventions. This new study, she said, underscores the key problem that arises when working backward from known deaths — researchers erroneously assign terms like “wasteful” due to the inherent bias in a retrospective approach. That $5 only seems like a waste once you realize that parking was free all along.

As a general rule, the sickest patients require the most expensive interventions, and a large fraction of the concentrated spending before death can be explained by how seriously ill these patients are. The study’s authors estimate that this fact accounts for 30 to 50 percent of spending in the last year of life.

The authors acknowledge possible shortcomings in their research. They wondered whether their algorithm — generated using data from millions of Medicare enrollees — fell short. “Maybe we just suck at predicting,” said Finkelstein.

To address this concern, the team test-drove a more accurate model. They built an “oracle,” a machine learning algorithm that weighs both real deaths and predicted deaths. Even under this superior model, the data barely budged — patients with high mortality risk still accounted for only a small fraction of spending.

One implication of these findings is that evaluations of end-of-life care need to look at more than just spending and whether a patient dies. “We need to also consider the quality of the care that’s delivered and the patients’ quality of life,” Harman said. Finkelstein said it is time to begin the challenging but critical work of combing through, “intervention by intervention,” to determine which policies, procedures, and treatments produce health benefits and which, unfortunately, do not.

There is undoubtedly tremendous waste in the medical system. Dr. Atul Gawande drew attention to the problem in a 2015 New Yorker article, which examined the forces that contribute to a medical culture of “overtesting, overdiagnosis, and overtreatment.” The waste is real, but Finkelstein said maybe cutting care in the last year of life is not a fruitful way to clean it up.

Quoting the movie “The Princess Bride,” with a mixture of humor and sincerity in her voice, Finkelstein said, “‘I do not think it means what you think it means.’ We need to be a little more careful and a little more sensible when leaping from fact to conclusion.”

  • It looks like some people on this thread, ddon’t know have Medicare works. The mass media has been running an alternative version of reality for quite a while. Nearly all of the people who benefit paid into the system their entire working lives, with the expectation of medical care when they retired. The US already spends 10K per person overall for the ineffective healthcare we are already getting.
    The media outlets have been leaving out the facts, because the dysfunction is profitable. Easily duped people believe the facts the profiteers have been using media to repeat. Medicare is much more efficient than the current available private models of healthcare. Other countries have better outcomes and cost far less per person. The US is #27 and getting worse by the day. The only reason the American people are allowing this, is because they got misled by constant deception by the media. The only problem with Medicare is the broken system that views it as a profit generating vehicle. The same can be said of the A.C.A,, there are too many Industry loopholes, because our politicians allowed industry insiders to write the laws to profit from it.

    • Agree that Medicare seems to be more efficient than the private health insurance programs & profits. But there is room for even more efficiency. As I see it, doctors are taking advantage of this government pot of money by stringing patients along. Some patients/consumers unabashedly go to a myriad of specialists and seem like they never get well. My friends keep getting more prescriptions that keep giving them side effects. No one is looking at it from a holistic approach & the PCP’s can’t keep up with it. Unethical practices are at it again. And hospital chains keep referring to doctors within their system. The rich get richer at our (government’s) expense.

    • Why can you not see that government is always going to be forced to ration transferred wealth, (government does not produce anything)? If prices were more in line with the rest of life, you could choose yourself how much or how little to spend.

      Costs are the issue that needs to be addressed, not wealth transfers. Wouldn’t it be better for you to hire your own doctor that you could afford than have government assign you one if it’s choosing that it paid for? All of these comments seem to say that the central planners choose poorly. I would never disagree. The problem with the majority of these comments is that they seem to think that giving more money and power to the same central planners will somehow produce different results. It can not and will not.

  • The assertion that “researchers erroneously assign terms like ‘wasteful’ due to the inherent bias in a retrospective approach” is important.
    However, I hope the authors recognize another assumption – that just because someone has a chance of living means they must have an intervention and that those interventions are NOT wasteful is equally erroneous. Seems like the only conclusion the authors can make from the science is that death is unpredictable. Whether the interventions leading up to death are “wasteful” is a very personal and intimate discussion which big data methods will never really inform. I hope some doctor has the guts to tell me that while I have a chance to live from some unidentified invasive intervention, that I don’t necessarily have to do it if it isn’t right for me.

    • Dan,

      You might be interested in a 2015 book by Stephen Jenkinson titled “Die Wise.” I’m an MS student in thanatology and found the book compelling in my class on Aging and Thanatology. I think you might appreciate the book.

  • Another long standing myth dispelled. The long running false narrative about “Big Bad Government Healthcare.” The real problem with Medicare is the tactics the industries use to game the billing and increase profits. We can clearly see the corruption, price gouging and outright theft by big Pharma, yet their marketers and lobbyists portray them as “innovators.” Not one of those questioners even brought up the fact that the advertising and marketing is so pervasive and generally misleading, but then enough of them have taken money from the industry. Hospitals have really good bean counters, and so does the entire industry. They know a few billing code changes can easily avoid liability and increase profitability. This country has gone fact and science free. Industry Insiders sit on the regulatory boards, and the Official in charge of any of this are guided by Fake News” and Alternate Facts.

    • How about the lucrative harms inflicted on elder patients like an unnecessary trach which should have been removed, but wasn’t between day three and seven, a poorly treated decubitus ulcer which only got larger under “expert” care. Trach was left in because of “staffing problems” exhausting an amazingly healthy man’s Medicare, finally billing him $6900.00 per day and preventing him from being moved to a far less expensive facility. Even one of his many doctors who said to put him into hospice right away because “he will be dead in less than a year” right in front of the patient, admitted my Dad’s vital signs and labs were better than most of the doctors at K_____d Hospital (oops, did I say that???…yes I did, that hell hole).
      So soon they will be taking fitness away from elders, like my very healthy Dad who should have been in and out quickly, but wasn’t allowed due to prejudice and ageism. Fit people do not die easily! The hospitals, doctors, etc. are gaming the system because CMS (also JCAHO) is NOT doing their job, even when tipped off. Why would a patient be admitted with only 3 DRGs and finally be transferred to a post acute facility with 47 over a year later? That is elder abuse!!!

    • Gretchen, I am sorry what happened to your father but the things you mention are related to costs, aren’t they? Do you really feel that government making more money available, meaning taken from someone else, will make those same costs go up or down?!!

      Medical care is hugely expensive so the only alternative is to have that most efficient of entities, the government, run it? What could possibly go wrong?!! Just a few more bureaucrats hired and a few billions of wealth transferred and THEN costs will really start to come down?

      And you actually end with the comment about how government isn’t doing it’s job?! It is as if you have never visited a DMV or spoken to any people employed as “social workers”.

  • How would the author know how much money I spend on end of life treatments?

    “We” don’t do anything. Government run by unionized bureaucrats takes money from the productive and transfer it to others. When someone other than government does this it is called “stealing”.

    If you do not think that you spend enough of the sweat of your brow on end of life treatments, I encourage you to spend more. Please note that this is not an acknowledgment that you should steal from me to do so.

    “I” spend exactly the right amount on the elderly dying. The amount that I choose.

    • Mr. Gill- ‘…takes money from the productive and transfers it to others’? Wow- first- Medicare is something that those who work pay into during their working lives so that they can have (minimal) health care benefits when they retire. No one is ‘stealing’ from your hard work. And second- I sincerely hope that you can continue to be ‘productive’, but if you are not able to do so at some point, hopefully you will have the benefit of some government sponsored programs to help you out. That is what a civil society does- we take care of one another during times of need. No man is an island…

    • Thanks, Marsha. Needed saying about what Mr. Gill said.

      No one can be assured of eternal health, and my sister (who used to be an occupational therapist) said some of those who had the hardest time coping were those who did imagine they were so healthy nothing would ever happen – and then had a stroke or something. It’s not ‘stealing’ for the community to help the sick — it’s solidarity and humanity.

    • Never heard of charity? The only way to treat our elderly is to steal from our neighbors to pay for it?! When the “community” taxes you it isn’t theft because? Something something?! Sure, the government will ultimately come and tax that money at gun point but that still isn’t stealing because 14 bureaucrats will pay themselves generously and then throw some of the “taxed” money at the needy!!!

      Sicking that human beings believe government action is like personal action. When my neighbor, who I barely knew, came down with colon cancer I did not look to anyone else to care for her. I spent my own money and even moved her into my house for her final weeks of life. It has been six years and I still care for her dog, like I promised her.

      Empowering government bureaucrats is NOT compassion.

  • Thank you for reporting on this data. From my own experience with my mom & others, I believe, now that we have methods of keeping people alive longer, in some cases it is a travesty in terms of their quality of life.
    My mom got Alzheimer’s around the age of 72. She lived with us for two + years but started wandering. My husband & I both worked. I had heard horror stories about having someone come to the house, plus it really is quite expensive for one-to-one care. Since she only had Social Security & no other income she became eligible for Medicaid. She went into a nursing home but within a few months stopped eating. They said that’s how the Alzheimer’s had affected her. The doctor advised me to do nothing & within 6 weeks she would pass. At the time she was up & about, even got out & walked into town once! I mistakenly opted to put a tube in her stomach. It was a downhill battle, but she was relatively healthy so she lasted TEN years. She was pretty much a vegetable when she died. I told my kids I would duct tape my mouth if this occurred, NOT go into a nursing home (at the tune of $7000/month?) & hold on for six weeks, as hard as that may be for them.
    Quality of life is an important consideration. I’ve seen this scenario played out often, usually not for ten years, but for several. You just need to visit a nursing home to see what I mean.
    If I had Senior Day Care, available like Child Daycare, open 6:00am-6:00pm, I could have kept my mom at home for a good part of those ten years. I truly believe her quality of life would have been better. I could have hired someone from a place like to come in on some evenings or during a vacation when she needed supervision. WHY aren’t Senior Day Care Centers a part of the options available to many people my age (55 when she entered the nursing home) who are caregivers of ailing parents? Some, but few churches offer it. I was told by one developer of an assisted living facility it was not in their “business plan” I took that to mean they couldn’t make enough money on it.
    Medicaid paid the difference between my mom’s Social Security (~$1200/Mo) & the cost of a nursing home. That probably amounted to -$4800/Mo. THAT my friends, is a BIG WASTE of our tax dollars, compared to Senior Day Care. I would have gladly paid the difference between her SS & the cost, which (after looking into some care Centers; church sponsored) amounts to -&350-$400/week. Even $2000/month would have saved the taxpayers $4000/month for just ONE person!
    Where are our Medicare/Medicaid/Government watchdogs who are a part of this inefficient, abusive system to the Joe Taxpayer?

    • Nancy Keenan’s comments are apposite. We’ll spend money on ICU care, respirators, etc., but there is no public money for stuff that isn’t specifically medical care, even when it would lower overall spending and improve people’s lives. We’d all benefit from spending tax money on stuff like elderly day care centers.

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