Teaser Appetizer: Economics of Death

No, it is not about the death by the deranged beast in us that wages war and genocide, nor is it about the economics of episodic mania of nature unleashing its fury, but of that death which takes us away quietly in our un-heroic old age. It is about the economics of snatching a few extra days from the clutches of death when frayed emotions bargain with the inevitable.

How furiously should we ‘rage against the dying of the light’?

Here is a true story: cast your decision.

An 86 years old man, afflicted with shakes and frequent ‘fall attacks’ of Parkinson’s disease, stumbles at home. His skull crashes against the travertine and spews blood. The paramedics whisk him away; the neurosurgeon valiantly operates on him and admits him to the ICU. He is unconscious but his lungs bellow with the help of a respirator. The doctor says that the skull has fractured; the brain is lacerated and delivers ‘no hope’. You are the family; what would you do now?

1. Do every thing possible to keep him alive.
2. Disconnect the life support.

Both the answers are right; that is the dilemma.



‘I want to die on schedule.’

Man lived up to the age of 47 years in 1900 in the USA and many years less in other less fortunate lands in Asia and Africa. Good nutrition, improved sanitation, mass immunization and a few antibiotics increased the life expectancy to 67 years by 1960. But since then, in the past 40 years, it has struggled up by only 7 more years. (See table: Life expectancy of males at birth in the USA: National Center For Health Statistics):

1900-1902 47.9
1909-1911 49.9
1919-1921 55.5
1929-1931 57.7
1939-1941 61.6
1949-1951 65.5
1959-1961 66.8
1969-1971 67.0
1979-1981 70.1
1989-1991 71.8
1997 73.6
1998 73.8
1999 73.9
2000 74.3
2001 74.4
2002 74.5
2003 74.8
2003 74.8

Expenditure on health in1960 in the US was $144 per capita which amounted to 5% of the GDP. By 2003 the corresponding figures had escalated to $5,635 and 15%. The gluttonous medical industrial complex gobbled up hundreds of billions of dollars without proportionate improvement in health. Ironically, it is not the old age but the process of dying that devours a substantial part of this swollen sum; the last year before death consumes between 26% and 50% of total lifetime health care expenditure.

Investigators at Rutgers University compared expenditure of terminal year with non-terminal year for people over 65 years. Between 1992 and 1996 the mean expenditure was $37,581 in the terminal year compared to $7,365 for the non-terminal year.

US Medicare spends 28% of its budget in the last year of the life and most of it in the last 30 days. Death in the hospital is costly. 4,692,623 persons died in the US hospitals in 2003. The hospitals received an average of $ 24,429 per person for terminal care for an average stay of 23.9 days. [Dartmouth Atlas of health care.]

Larger percentage of older people in the population strains the healthcare financing, as far greater numbers at an advanced age are likely to die in the following year. According to the Canadian health tables ‘the probability that a male aged 40 will die during the next year is 0.2%, while at age 70 it is 3.0%, and at age 90 it is 18.6%’.

But people who express their wishes about terminal care fare differently. In a study done between 1990 and 1992, persons who had directed in advance about the intensity of service they wanted near death, spent much less: $30,478 compared to $ 95,305 by those without an advance directive. [Archives of Internal Medicine, 1994.] Those with an expressed ‘do not resuscitate’ before admission to the hospital spend much less than those who order this during the course of their hospital stay.

Can we afford the ever-increasing cost of the terminally sick? Maybe, it needs a different perspective.



‘Don’t agonize about prolonging life, just postpone my death.’

The flip side of cost is revenue. The cost to one business system shows up in the revenue column of another business. The transfer of this cash creates jobs in its transit and in this case, in an industry, which tends to the sick and attempts to keep the rest healthy.

In 2004, health care was the largest industry, had 545,000 establishments and employed 13.5 million people. About 19% of new jobs will be created by this industry up to 2014 — more than any other industry.

Hospitals comprise only 2% of the healthcare institutions but they employ 40% of all workers. It is calculated, that hospitals accounted for Medicare revenue of 114.6 billion dollars in 2003, for the care of the terminal 23 days of persons over 65 years.

Health expenditure in the US in 2005 was $1.7 trillion, which makes it probably the largest single industry in the world. One could make a reasonable argument that the economy generated by the health care industry is more desirable than many other industries like alcohol, tobacco and the other two big industries: war and religion.

Health care’s contribution to the GDP was 15.3% in 2005 and should increase in coming years. And why not!



‘Economics is the bastard child of ethics.’ –TS Elliot.

An isolated cost versus benefit matrix should not determine the end of life measures. The insatiable appetite for technology makes the choice between cost and ethics even more difficult for the family and the health care providers. In the absence of an advance directive, often, all the options in the care of the terminally sick seem ethically right. Sometimes, the quality of remaining life helps in deciding the course.

About 10% of all who die after age 65 are severely impaired and 14% are fully functional. Between these two ends of the spectrum are partially functional people. Disability increases with age. In a survey done in 1986, only 20% between the ages of 65 and 74 were completely functional and 3% were severely disabled. At age 85 about 22% were incapacitated and only 6% were functioning fully.

Most people will agree that prolonging life of everyone irrespective of the disability is the right choice, but standing by the bedside of the terminally sick person the questions are: is it worth it and at what emotional and financial cost? There are no wrong answers.

“Most Americans can’t afford a comfortable death. More than likely, their savings accounts won’t hold up after intense hospitalization. And, as the insurance system now works, benefits will cover ample surgeries and procedures, but once those limits are met there is nothing left for palliative care…”

“At least three barriers block the way for a more comfortable death… (1) The health-care system fails to offer an institutional structure to support appropriate choices for dying patients. (2) Insurance mechanisms fall short of providing adequate support beyond high-tech care. (3) American culture embraces high-tech medicine while harboring an overwhelming fear of painful death. Discussions of palliative care rarely enter into the picture.”— From the September 1996 Medical Ethics Advisor.

We can devise the cost controls, extol the virtuous revenue, debate the knotted ethics but which balm will soothe the emotions?


The cremated remains of my father slid from my fingers. The slow breeze hugged the ashes gently and floated them away into the heaving Ganges. His last remains bobbed and crested the waves and then merged with the primordial waters from whence he had sprung as ‘life’ many eons ago.

I saw him disappear –forever. But a thought lingered: maybe we shouldn’t have pulled the plug.