The Agenda

How La Crosse, Wisconsin Slashed End-of-Life Medical Expenditures

Remember death panels? In a memorable Facebook post, Sarah Palin famously warned that Obamacare would lead to a world in which Americans would have to stand before “death panels” to justify access to medical care. My sense is that conservatives objected to Obamacare on rather more prosaic grounds — they suspected that despite the CBO’s claim that the legislation would be deficit-improving, its costs were being underestimated and its benefits were being overestimated, and that it would ultimately lead to a larger, more expensive, and (yes) more intrusive government, etc. But Palin’s reference to death panels captured the imagination of those who wanted to paint right-wing opposition to Obamacare as a delusional, fever-swamp phenomenon.

Not surprisingly, it is the humdrum conservative objections to Obamacare that are being borne out (IRS income verification isn’t working terribly well, the employer mandate has proven impracticable, long-term care insurance has been abandoned, and the individual insurance market has experienced enormous disruption, among other things) while the death panels have yet to materialize. One wonders if we might have been better off had we gotten death panels without the rest of Obamacare. No, not death panels in which the aged and the infirm are obligated to demonstrate their social value, but rather a process through which older Americans could offer advance directives for how they’d want to address various medical problems that might leave them incapable of making real-time decisions.

Episode 521 of the popular NPR program Planet Money recounts the experience of La Crosse, Wisconsin, where 96 percent of those who die have given clear instructions for what ought to be done in the event of serious illness. Note that this is over three times as high as the national average of 30 percent (50 percent for those with serious illnesses). And back in 2009, Joseph Shapiro of NPR covered the detail with which older La Crosse residents address difficult end-of-life questions. According to Shapiro, advance directives have helped sharply reduce end-of-life medical expenditures in La Crosse:

The Dartmouth Atlas of Health Care documents the vast difference in health care costs from one place in the country to another. At Gundersen Lutheran, the cost of care for someone in the last two years of life is about $18,000. The national average is close to $26,000. At one hospital in New York City, it’s more than $75,000.

“When people see the low cost in La Crosse, there are assumptions about rationing care, about denying care, about limiting — that we limit care for our patients,” says Hammes. But it’s not that dying people in La Crosse are denied care, he says. It’s that they’ve thought out their wishes in advance, so they get exactly the care they want. And often that means avoiding excessive and unwanted care.

We have to assume that there are other factors at work, but these numbers are pretty striking. A friend of mine observed that the success of advance directives in La Crosse vindicates Robin Hanson’s thesis that high end-of-life medical expenditures can be attributed to “loyalty signaling”; the relatives of the dying demonstrate their love and affection by pressing for aggressive treatment, at no (or at low) expense to themselves, even when the ailing individual might have preferred to rest in peace. There are a number of strategies for addressing this kind of overspending. I’ve touted the idea of “cash-for-care,” in which Medicare beneficiaries would have the option of choosing expensive treatment A or somewhat-less-expensive treatment B plus a lump-sum cash payment. Alas, many people find this idea uncomfortably transactional. By making advance directives a familiar feature of the landscape, La Crosse has made a somewhat taboo idea like cash-for-care less necessary. In effect, advance directives allow us to short-circuit the loyalty signaling process — no, you’re not a terrible daughter, granddaughter, sister, or what have you for allowing your aging relative to die.

Making detailed discussions about end-of-life care the norm rather than the exception won’t be easy, and it will probably require a fair bit of nudging. But if it meaningfully reduces medical expenditures, and if it helps ensure that older Americans get the treatment they want rather than the treatment their relatives want for them, it’s an effort well worth pursuing.


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