Serious Illness and Out-of-Pocket Spending

The last years of life are one of the most costly periods in terms of formal healthcare provision, often attributed to a high amount of critical care, hospital admissions, and care home stays. Some of these costs are borne directly by the patient and their family carers: out-of-pocket costs. Out-of-pockets costs include insurance premiums, deductibles, and all costs for services not covered by health insurance or government-funded healthcare. Specifically for the last phase of life, research has focused on insurer costs rather than out-of-pocket costs. The ability to design policy solutions is contingent on understanding the total societal costs, including both formal and out-of-pocket costs. While both the likelihood of out-of-pocket costs and the amount differ across healthcare systems and countries, they can have potentially serious consequences for patients and families, from refusing treatment to bankruptcy. In this chapter, we discuss the distribution of costs in different health care systems and how different types of health care systems can have an effect on out-of-pocket costs. Next, we discuss how certain diseases (such as cancer or Alzheimer’s disease) or vulnerable groups (people with a low income) may be particularly associated with higher out-of-pocket costs. Last, we review the impact of palliative care on out-of-pocket costs. We show how specialized palliative care can have a positive but limited impact on out-of-pocket costs and cannot on its own alleviate all out-of-pocket costs associated with serious illness.