Spending Differences Related to Race and Gender Disappear During Last Year of Life for Medicare Recipients

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March 3, 2004

While health care spending on minorities, poor people and men is often lower than spending on whites, higher-income people and women, the spending gap narrows or disappears in the last year of life for Medicare patients, according to a RAND Corporation study issued today.

The study by RAND Health marks one of the first times that researchers have identified a segment of the health care system where spending differences do not exist based on race or gender. The findings are published in the February issue of the Journal of General Internal Medicine.

“We were very surprised to find that, while differences in medical expenditures vary greatly by gender, race and income among patients two and three years before they die, those differences narrow or disappear during the last year of life,” said Lisa Shugarman, a RAND Health researcher and lead author of the study. “This is the only area of health care where we do not see spending differences.”

Disparities in health care spending, quality and access based upon race are a growing national issue. The federal Agency for Healthcare Research and Quality released a widely cited report on the issue last year.

“End of life issues are very important, and rapidly attracting more attention,” Shugarman said. “The number of elderly people coming to the end of life is rising rapidly and will nearly double in the first quarter of this century. No one has looked before to see what happens to medical expenditures related to gender, race, income and age for people in their last years of life. Those costs have crucial impact in areas ranging from our personal finances to our national budget.”

RAND researchers examined the medical claims of 241,047 Medicare patients from across the nation. The youngest patients studied were 68, while the oldest were 90 and above.

The study acknowledged that, while large spending differences by gender, race and income are not apparent during the last year of life, “considerable disparities may yet exist in the array of services accessed or in the quality of end of life care.”

Shugarman and her colleagues suggest several possible reasons for small or non-existent differences in spending by gender, race and income in the last year of life. It may be that the combination of being seriously ill and having nearly universal access to health care through Medicare is enough to overcome the usual barriers to getting health care.

However, the project did not address these issues and more research will be needed to determine whether these or other factors influence the findings, researchers say.

While spending differences disappeared during the last year of life, they were evident in the study population earlier in life. During the second and third years before death, medical expenditures were lower for African Americans than for whites, and higher for women than for men.

Shugarman said that women's expenditures are higher than men's in part because women frequently have accumulated more physical disabilities than men and are more likely to see a physician. Additionally, while men often have a spouse at home to provide care, women frequently outlive their spouses, so they must rely more on the health care system to meet their health care needs.

The study also found that during the last year of life, spending was higher for younger patients compared with older patients. For example, the authors found that Medicare spending for recipients who were 90 or older when they died was 31 percent lower than expenditures for those between the ages of 68 and 74 when they died. The opposite is true for Medicare recipients in the second and third year before death, with older patients spending more in the two years prior to death.

Other authors of the report are Diane E. Campbell from RAND Health and Medical Outcomes Research and Evaluation Services in Vermont, Chloe E. Bird of RAND Health, Thomas A. Louis of the Johns Hopkins Bloomberg School of Public Health, Jon Gabel of Health Research and Education Trust, and Dr. Joanne Lynn of RAND Health and the Washington Home Center for Palliative Care Studies.

Support for the study was provided by the Agency for Healthcare Research and Quality, the National Institute on Aging, the Fan Fox-Leslie Samuels Foundation, and The Washington Home Center for Palliative Care Studies.

RAND Health is the nation's largest independent health policy research organization, with a broad research portfolio that focuses on medical quality, health care costs and delivery of health care, among other topics.


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