Are You Ready for a Glorious Sunset? A New Freakonomics Radio Episode

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(photo: Josep Ma. Rosell)

(photo: Josep Ma. Rosell)

Our latest Freakonomics Radio episode is called “Are You Ready for a Glorious Sunset?” (You can subscribe to the podcast at iTunes or elsewhere, get the RSS feed, or listen via the media player above. You can also read the transcript, which includes credits for the music you’ll hear in the episode.) The gist: we spend billions on end-of-life healthcare that doesn’t do much good. So what if a patient could forego the standard treatment and get a cash rebate instead?

Not long ago, we received an e-mail from a listener named Timothy Price:

Why don’t health insurance companies offer bonuses to patients who are willing to forego standard end-of-life medical care?  When a patient receives a terminal diagnosis, I have to believe that the healthcare companies have actuaries and data sets that would give them guidance on what the next 6-24 months of medical care would cost.  For patients willing to skip this type of care my idea is for a bonus according the following formula: immediate bonus = 50% of (actuarial underwriting of standard medical care – hospice care). The patient maintains control over the optionality, but an immediate benefit opens up to them (one last grand vacation, a lasting legacy for the next generation, etc).  The health insurer gets an actuarial gain and makes progress towards disincentivizing excessive consumption of health care in the final months of life.  Seems like a no-brainer to the economist in me (though my sociologist wife thinks I’m completely cold-blooded).

Whether you consider Price’s idea a no-brainer or completely cold-blooded probably says a lot about how you think about end-of-life healthcare costs and, more broadly, how we handle the end of life in modern society generally. Those are the themes we poke at in this episode. Among others, you’ll hear from:

+ Ezekiel Emanuel, the physician and medical ethicist at Penn who helped put together the Affordable Care Act. More recently, Emanuel outlined his end-of-life views in an Atlantic piece called “Why I Hope to Die at 75.”

+ Uwe Reinhardt, a healthcare economist at Princeton.

+ Thomas Smith, an oncologist and cancer researcher at Johns Hopkins.

+ A University of Chicago economist named Steve Levitt.

Which of these people do you think were most enthusiastic about Timothy Price’s proposal?


James

One problem with the whole end-of-life care thing is that it's often not the patient making the decisions, but the patient's relatives. I'm seeing this now with a friend (in her 90s) who wants to refuse further treatment, but is under intense pressure not to from her husband and about half of the family. Add a "glorious sunset" payout (or substantial inheritances, &c) to the mix, and you'd get half the family accusing the other half of wanting to kill mom off for the money.

It'd be even worse with a patient who's unconscious, or otherwise incapable of making their own decisions. I could even see the legal establishment getting involved. Say Joe refuses intensive treatment for his comatose, moribund parent, who dies leaving him a substantial legacy. Then the cops and/or ambitious DA claim its really murder for profit...

john

Your last statement doesn't make sense.

1. Either the program (glorious sunset) itself is legal or not.
2. Either the relative who is dieing has an end of life plan (living will) or not.
3. Either the person who is deciding to take the payment instead of giving care to the relative has that legal authority or not.
4. Finally that same person either had some legal culpability (directly caused) in that persons death, or not.

The DA just can't arbitrarily decide not giving medical care is murder, either it is a legal choice made by the person or it is not a choice they will be allowed to make by the medical/insurance establishment in the first place. There is just no way either of those two entities let alone politicians would allow a grey area situation like you describe, it would be a legal trainwreck for tons of people with too much money at stake.

James

Re "The DA just can’t arbitrarily decide...", I think perhaps you should pay more attention to how the legal system actually works in practice. It's full of purely arbitrary decisions.

rehajm

If money will incentivize Zeke to step off the policy making stage there's a long line of people ready to pony up...

Geoffrey B

I can understand why medical costs are such a big concern to us and the government. My grandmother recently passed away and the last 3 years of her life she survived with the help of dialysis. My family and I loved her very much and cherished the time we spent together. We were blessed in that Medicare covered all of her medical costs and I just recently realized how much of a gift she was given by the government.

Each dialysis treatment cost $6,000 and she went 3 times a week for 3 years
$6,000 x 3 times a week x 52 weeks in a year x 3 years =$2,800,000

I calculated that if I used every cent of my take-home pay from my $58,000 salary ($46,800) it would take me 60 years to pay for my grandmothers dialysis treatment......60 YEARS!!!!!
$2,800,000/$46,800= 59.82

This can't be sustainable unless, well I really have no idea how it could be.

John

I don't mean the following to be perceived as disagreeing with most of what you said or downplaying or trivializing the feelings you have about the events with your grandma.

I just wanted to point out that the government is not some altruistic being that has infinite resources from nowhere who has gifted your family with paying for your grandmother's treatment.

1. Yes it does seem unsustainable to do that for every person but they don't do it for every person and not even close to it.
2. Also the money they are using are all of our collective tax dollars so really you should think of it as thanking all Americans including all of your own family for allowing the government to spend tax dollars that way.
3. It is in the governments interest to do so because that 2.8 million props up a huge sector of the economy and generates a large amount of tax revenue. So they have recycled some of those dollars.
4. So when you think about a dollar it is not created one time then lost after being used one time. Now the idea of sustainability starts to become a bit more feasible. Granted our government goes hugely into debt but that includes many reasons besides just medicaid. But in the end you have to put oil in an engine to keep it running smoothly.
5. There are many more reasons I could list but they diverge into more and more cynical theories about government purposes for any action and are highly not really reasonable for this kind of forum.

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Jason

This whole argument seems quite hypocritical. People freak out about the Glorious Sunset proposition but are unwilling to take any action to save all the lives that are continuously lost due conflict, disease and environmental factors around the world.

Likewise its ok to spend billions on end of life but there is minimal support for improving living conditions for millions of Americans who live below the poverty line. The pitiful amount of support for that kind of thing dissipates further when we start looking at helping non-Caucasians or heaven forbid illegal immigrants.

But hey if people aren't born white, middle class and American its just too damn bad for them I guess.

James

Strange. Last time I looked at government spending, it appeared that we were spending multiple billions of dollars on supporting people living below the poverty line, and more billions on programs that, if used correctly, would get people OUT of poverty. Worked for me, anyway.

Ray

Fantastic, thought-provoking episode. I was just telling my wife yesterday to be prepared to let me go if I were ever in a medical situation where I was unlikely to ever be "me" again. She recoiled at the suggestion and I think that's where the premise runs into trouble. It could only work for the unattached and it's the unattached who have no reason to make the trade-off. Those of us with families would happily do it while those without would be more likely to cling to life... I mean, what's the alternative? Leaving more money to charity?

BTW, who narrates the Glorious Sunset commercial? His voice is very familiar, yet I can't quite place it.

Ryan

I've worked in health insurance for 10+ years. A great piece of the ACA law opened up a fee for service to fee for value transformation in terms of insurer compensation. In the next 5 years, a large amount (>75%) of costs in health will not be fee service based, but outcome and value based. The argument that the insurers want more "health volume" is changing rapidly. The last segment of the podcast outlines this with Tom Smith's interview.

Kam

I was surprised to not hear about Singapore and their use of Medical Savings accounts. These accounts can be transfered between family members. The enforced savings combined with transferability seems to be the closest example of the "Glorious Sunset" system proposed.

https://en.wikipedia.org/wiki/Medical_savings_account#In_Singapore

The Healthcare Triage video on youtube about Singapore and their health care system seems like a good overview on how the money is saved and how the patient would make the ultimate decisions.

David Shaheen

The main issue with this plan is that someone is determining whether a human life has value, based on the "quality of life" or perceived future enjoyment. As Tim says at the end of the episode, that he would have to determine whether that last part of his life has enough value to be worth the treatment. That is the wrong question.

If you say that human life (or some part of human life) does not have value, it opens up a dangerous situation for people to determine who does and does not have value. I think this is bad, even if a person decides it for themselves. It doesn't just affect that person, it affects society and our whole view of the human person. If we don't agree that human life has inherent value (not coming from ability, productivity, or usefulness), then someone could decide at any time that YOUR life doesn't have value.

This does not mean you have to do extraordinary things to stay alive thru a very bad sickness. But, it is important to realize that all human life has value until the very end, taking reasonable measures to promote overall health.

Thanks for the great episode and intriguing conversation.

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samiam

Hold on... We have a regulatory environment that intentionally shields end consumers from prices and upholds monopoly power for its suppliers, and then we blame the market for not working???
Honestly, the person making this comment, be they a health economist or not, cannot possibly claim that we in the United States have anything close to a real market for health care. You can't blame something that doesn't exist for not working the way you think it should.

Walter

What a fascinating discussion! But I think, if implemented, the "Golden Sunsets" insurance scheme would set the stage for its own destruction. The product appears to exploit an arbitrage between the market perception of reasonable end-of-life care vs. the care that individuals really want. As more people opt for cash payment in lieu of life-prolonging care, insurance companies will adjust downward the life-prolonging care they offer in their plans. As their costs go down, so will the premiums they charge. "Golden Sunsets" will have to reduce its premiums to remain competitive - but will have to finance this by reducing its end-of-life care package to match the market. Shrinking the care on offer will cause the cash payment option to shrink too. At some point - as with all arbitrage - the whole thing just disappears!

Ben Knox

how about a set rule that past a certain age (say 80) we become eligible for palliative care only.

Not actively prolonging the life of over 80s seems justifiable (on similar rationales outlined in Ezekiel Emanuel's Atlantic article). However, it importantly has no impact on fit and healthy over 80s.

It also removes the need for active human decision making (and all the moral complications this leads to) as in Timothy prices initial suggestion. Admittedly, the financial implications of this alternative wouldn't be as large. However, I presume, with many over 80s on expensive treatment, it will still save significant money which can be redistributed.

The suggestion could also have legislative benefits compared to alternatives such as assisted suicide, as there is no active taking of a life. (I think?)

David Sanderson

I really like this idea. I watched both of my parents slowly deteriorate over the last three years of each of their lives. I made a decision then that I wouldn't do any of that. Having an option where I could leave my family a security blanket in exchange for not suffering through all that indignity, and physical and mental pain would be ideal. I won't take the long suffering and painful route anyway, so getting money in exchange for that choice would be good for me.

This option would certainly be circumstantial and should never be forced on anyone. I suspect that most people would not want this option for various reasons, but I would feel much better knowing that this could be a choice for me.

Patricia Rivard

Palliative care versus standard of care needs to be discussed with each patient facing a terminal prognosis, but I believe monetizing it is not ethical.

eliza

Fascinating episode, but it didn't discuss what the "commercial" proposed, which is a relative making decisions about the patient's health care.

Andrew Kennelly

Love the idea, and wish the discussion of it could enter the mainstream of the national conversation. So sad the idea will likely never see the light of day on account of the fact that public policy is so often dictated by emotion and anecdote than by data and facts. Cultural conservatives would have a cow, and the bleeding heart types will raise objections about how "the rich" can have their extraordinary care while "the less fortunate" will put pressure on grandma to check out for the benefit of the family.