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Why end-of-life planning saves money
October 4th, 2011
04:00 PM ET

Why end-of-life planning saves money

It's something no one wants to think about, but a reality if worst happens: What do you want to happen if you are on the brink of death and can't communicate?

A new study in the Journal of the American Medical Association finds that advance directives are linked to less Medicare spending, lower likelihood of dying in a hospital, and higher usage of hospice care in areas of the U.S. that tend to spend the most on end of life care generally.  Advance directives, also called living wills, are documents that specify what kind of treatment you do or don't want to be given in various situations when your life is on the line.

"It absolutely highlights some of the reasons why you should both talk to family, friends and physicians about the type of care you might want to receive, should you be unable to make your own decisions," said Lauren Hersch Nicholas, lead study author and health economist at the University of Michigan.

The study looked at information from 3,302 Medicare beneficiaries from a nationally representative study at the University of Michigan called the Health and Retirement Study. Participants included in the end-of- life research died between 1998 and 2007.

Researchers conducted interviews with next-of-kin about experiences at the end of life, and whether the people who died had advance directives.

They found that in regions of the country where there tends to be a more aggressive treatment style for end-of-life care, Medicare spending was about $5,600 less per person who died with an advance directive. There was no significant spending difference found in locations with low to average end-of-life expenditures. Most participants with advance directives specified that they wanted to limit treatment.

For people in high-spending regions with advance directives specifying limitation of treatments at the end of life, 41% received hospice care, compared with 24% among people without these documents.

How much weight an advance directive carries differs by state. You can explore your state's regulations and fill out a state-specific form at Caringinfo.org, run by the National Hospice and Palliative Care Organization.

Registries for advance directives are also available online, such as the U.S. Living Will Registry and Google Health.

Previous research has supported the idea that if doctors spoke with their patients about end-of-life wishes, millions of dollars could be saved in health care costs - specifically, more than $76 million per year could be saved if half of the people who die from cancer annually had end-of-life conversations with their doctors, according to a March 2009 study in the Archives of Internal Medicine.

Having these kinds of talks with anyone is difficult, but organizations such as Engage with Grace are trying to make them easier for you and your family. Check out this article and these videos for more information about how to ensure that your loved ones have end-of-life plans in place.


soundoff (10 Responses)
  1. Bob

    Thanks to Sarah Palin this was not included in the recent health care act. Thanks Sarah. Now people waste money and die in a place they don't want to go.

    October 4, 2011 at 18:55 | Report abuse | Reply
    • DEALWITHIT

      How could Palin influence the the deal that was made in Congress? She had no vote on the matter dummy!

      October 5, 2011 at 10:40 | Report abuse |
    • jeff

      Yes, her juvenile ranting about 'death panels' showed that she was either grossly uninformed, or deliberately trying to scare people. Either way, she needs to stay out of issues she knows nothing about (which pretty much covers everything outside of Alaska).

      October 5, 2011 at 14:02 | Report abuse |
  2. kFocused56

    I think everyone should partake in advance directives. No one wants 2 think about their death but it makes sense 2 have sum sort of plan ahead of time which could possibly make da end much less stressful for all involved.

    October 5, 2011 at 00:42 | Report abuse | Reply
  3. Raine

    For me, I would perfer the Dr Jack K way....if I am terminal I would choose to "take a pill or injection" and quietly "go to sleep"...permanently. I do not want to linger with IV lines, tubes, suction devices, oxygen masks, diapers etc just to keep me around. Why extend my "life" if there is little to no quality to it?
    Everyone should have their own choice. If you or your religion won't allow this choice, that is up to the individual.
    Sadly, hospitals & nursing homes are overwhelmed as we all age with terminally ill patients for linger for months, some of whom wish to "leave this world" with dignity and grace.
    This should be a choice.

    October 5, 2011 at 07:29 | Report abuse | Reply
  4. Paul

    The medical profession defaults to a 'prolong life' approach which will of course cost money for the drugs, the hospital beds, the staff etc. However, for many individuals, a prolonged life without quality is no life at all and would prefer it to end, as would most of their loved ones. The time has come for the ailing old and terminally ill to have a personal death plan which they fill in with the involvement of close family and medical professionals. This will enable the subject to be discussed calmly and with the patient's wishes being understood. There is a good death plan template in the My Last Song website which I used when a dear friend was dying. It covers all bases and the result was a death that was as comfortable and comforting as possible.

    October 5, 2011 at 12:04 | Report abuse | Reply
  5. pete

    A living will is one type of advance directive, but the two are NOT the same thing. The living will is simply a written statement expressing the patient's wishes. It can be revoked by the patient at any time and by any means. The living will is also open to highly varying interpretation by doctors and family members. However, what is actually necessary is for a person to appoint someone as a durable power of attorney with health care proxy. This person makes all of your legal and healthcare decisions, if you are incompetent for whatever reason. There are forms for this on-line, and they merely need to be completed and notarized. This is the ONLY advance directive that makes any sense and is more likely to result in the patient's wishes being followed.

    October 5, 2011 at 12:29 | Report abuse | Reply
  6. susan

    Living wills mean that patients have had discussions with their doctors about the kind and extend of the care they want at the end of their lives. This type of communication is key to better relations between the patient/provider. The reality is we all will die, and having some control over the process must be reassuring. It's a conversation worth having. http://whatstherealcost.org/video.php?post=five-questions

    October 5, 2011 at 16:54 | Report abuse | Reply
  7. Pmac

    I am pro living wills n advance directives. I simply want to do my way.

    October 6, 2011 at 09:21 | Report abuse | Reply
  8. Shahin

    hay brad you know I found out that life is full of changes tihngs can't always be the same but God is always the same peopel may change but God dosen't and because of that I can always find a great scorce of wisdom to make my plans and let God be in controol carl

    November 14, 2012 at 14:19 | Report abuse | Reply

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