The Importance of Proximity to Death in Modelling Community Medication Expenditures for Older People: Evidence from New Zealand (proximity to Death and Community Medication Expenditures)

Background Concerns about the long term sustainability of health care expenditures and in particular prescribing expenditures has become an important policy issue in most developed countries. Previous studies suggest that proximity to death (PTD) has a significant effect on total health care expenditures, with its exclusion leading to an overestimation of likely growth. There are limited studies of pharmaceutical expenditures taking PTD into account. Objective This paper presents an empirical analysis of public medication expenditure on older individuals in New Zealand (NZ). The aim of the study is to examine the individual effects of age and proximity to death (PTD) using individual level data. Methods This study uses individual level dispensing data from 2008/2009 covering the whole population of medication users age 70 years or more and resident in New Zealand. A case control methodology is used to examine individual cost and medication use for a 12 month period for decedents (cases) and survivors (controls). A random effects two part model, with a Probit and Generalized Linear Model (GLM) is used to explore the effect of age and proximity to death on expenditures. Results The impact of proximity to death on prescription expenditure is not as dramatic as studies reporting on Acute and/or long term care. The 12 month decedent to survivor mean expenditure ratio was 1.95, 2 2.09 for males and 1.82 for females. The additional cost of dying in terms of prescription drugs decreases with age, with those who die at 90 years of age or older consuming fewer drugs on average and having a lower mean expenditure than those who died in their 70s and 80s. The following variables were found to have a decreasing effect on the mean monthly prescription expenditures, a reduction of 2.2% for each additional year of age, 4.2% being in the Mãori ethnic group and 7.8% for Pacific Islanders. Increases in monthly expenditure were associated with being a decedent 32.1%62.6% (depending on month), being of Asian origin 16.2% or a male 12.6%. Conclusions Given the variance reported between survivors and decedents, to improve accuracy future projections should include PTD in their models. Policies targeted at reducing expenditures should not focus on age but on ensuring appropriate and cost effective prescribing especially towards the end of life. Key points for decision makers:  Despite prescription medications being the most common medical intervention there is limited evidence on how proximity to death and ageing affect prescribing expenditures for older people.  In terms of expenditure on prescription medications, proximity to death would appear to be a more important driver than ageing and should therefore be considered in any future expenditure projections.