On the Importance of Taking End-of-Life Expenditures into Account when Projecting Health-Care Spending

This paper examines health-care spending projections when the interaction between end-of-life care expenditures and declining mortality is taken explicitly into account. Based on Quebec's historical public health-care spending data and mortality rates for 20 age groups over the period 1998 to 2009, an econometric model is developed with the aim of differentiating "ordinary" health-care spending from end-of-life care expenditures. Numerical simulations reveal that the average annual growth rate of future health-care spending projected over the period 2009-2056 diminishes by about 0.19 to 0.23 percentage points. This implies a cumulative health-care savings of about 8.4 to 10.3 percent in 2056, independent of other health-related factors.