Exploring the influence of proximity to death on disease‐specific hospital expenditures: a carpaccio of red herrings

Albert Wong, Pieter H. M. van Baal, Hendriek C. Boshuizen and Johan J. Polder

Health Economics, 2011, vol. 20, issue 4, 379-400

Abstract: It has been demonstrated repeatedly that time to death is a much better predictor of health care expenditures than age. This is known as the ‘red herring’ hypothesis. In this article, we investigate whether this is also the case regarding disease‐specific hospital expenditures. Longitudinal data samples from the Dutch hospital register (n=11 253 455) were used to estimate 94 disease‐specific two‐part models. Based on these models, Monte Carlo simulations were used to assess the predictive value of proximity to death and age on disease‐specific expenditures. Results revealed that there was a clear effect of proximity of death on health care expenditures. This effect was present for most diseases and was strongest for most cancers. However, even for some less fatal diseases, proximity to death was found to be an important predictor of expenditures. Controlling for proximity to death, age was found to be a significant predictor of expenditures for most diseases. However, its impact is modest when compared to proximity to death. Considering the large variation in the degree to which proximity to death and age matter for each specific disease, we may speak not only of age as a ‘red herring’ but also of a ‘carpaccio of red herrings’. Copyright © 2010 John Wiley & Sons, Ltd.

Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:wly:hlthec:v:20:y:2011:i:4:p:379-400

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