The Cost of an Additional Disability-Free Life Year for Older Americans: 1992-2005

• Published in: Health services research 2013-02, Vol.48 (1), p.218-235
• Main Author: Cai, Liming
• Format: Article
• Language: English
• Subjects: Activities of Daily Living; Age Factors; Aged; Aged, 80 and over; American people; Americans; Beneficiaries; Costs and Cost Analysis; Costs of Care; Demographic aspects; Disability; Disability insurance; Disabled Persons - statistics & numerical data; Economic aspects; Expenditure; Female; Forecasts and trends; Health; Health aspects; Health Care Costs; Health care expenditures; health care spending; Humans; Life Expectancy; Male; Market trend/market analysis; Medical care, Cost of; Medicare; Medicare - statistics & numerical data; microsimulation; multistate life table; Older people; population aging; Quality of Life; Sex Factors; Socioeconomic Factors; Statistics; Studies; Surveys; United States; Value of spending
• ISSN: 0017-9124; 1475-6773
• DOI: 10.1111/j.1475-6773.2012.01432.x

Objective To estimate the cost of an additional disability‐free life year for older Americans in 1992–2005. Data Source This study used 1992–2005 Medicare Current Beneficiary Survey, a longitudinal survey of Medicare beneficiaries with a rotating panel design. Study Design This analysis used multistate life table model to estimate probabilities of transition among a discrete set of health states (nondisabled, disabled, and dead) for two panels of older Americans in 1992 and 2002. Health spending incurred between annual health interviews was estimated by a generalized linear mixed model. Health status, including death, was simulated for each member of the panel using these transition probabilities; the associated health spending was cross‐walked to the simulated health changes. Principal Findings Disability‐free life expectancy (DFLE) increased significantly more than life expectancy during the study period. Assuming that 50 percent of the gains in DFLE between 1992 and 2005 were attributable to increases in spending, the average discounted cost per additional disability‐free life year was $71,000. There were small differences between gender and racial/ethnic groups. Conclusions The cost of an additional disability‐free life year was substantially below previous estimates based on mortality trends alone.