Australians in their last year of life spend 14 times as much on key health services than other Australians do, according to a new report by the Australian Institute of Health and Welfare (AIHW).

The report, The last year of life: patterns in health service use and expenditure, is the first-ever comprehensive examination of health services used by Australians in the final 12 months of life and of the cost of those services to the health system.

The AIHW used deidentified data in the National Integrated Health Services Information Analyses Asset (NIHSI AA) to look at hospital admissions, emergency department presentations, services provided under the Medicare Benefits Schedule (MBS), and prescriptions supplied under the Pharmaceutical Benefits Scheme and Repatriation Pharmaceutical Benefits Scheme for people in their final 12 months of life.

“More than 161,000 people died in Australia in 2020, and each death has wide-reaching impacts on families, friends, and communities,” AIHW spokesperson Richard Juckes said.

“Understanding how people interact with the Australian health system in the period leading up to death provides vital information on health care provision. This information is essential to assess and evaluate health service planning and policy.”

Of the 1.14 million people who died between 1 July 2010 and 31 December 2016, 97 per cent used at least one of the studied health services in their last year of life. A total estimated cost of $296.1 billion was spent on these services during this time; 8 per cent ($23.6 billion) of the total cost was for people in their last year of life.

Overall, the average annual health service cost per person for people in their last year of life was 14 times as high as for those not in the last year of life ($24,000 and $1,700 respectively).

On average, people who died used more of these health services in their last year of life than the rest of the population used over a 12-month period.

The largest difference was for hospital admissions: an average of 2.6 admissions per person in their last year of life compared with 0.1 admissions per person per year among those not in the last year of life.

Overall, expenditure on these admissions was 30 times as high for people in their last year of life compared with those not in their last year.

Some people had no contact with the health system in the 12 months before their death. These tend to be young people and people who die suddenly from causes such as injury, including self-inflicted injury.

The highest proportion was among people who died by suicide, where 10 per cent of people had not used one of these services in the previous 12 months, compared with the overall figure of 2.7 per cent.

The average annual cost for the four health services combined for a person in their last year of life was $24,000.

However, the average cost ranged from $16,600 per person aged 20–29 to $37,100 per person aged 60–69.

Average costs per person fell after the age of 70, down to $17,000 per person aged 80 and over. This coincides with when people most often enter permanent residential aged care.

For people aged 85 and over, the average annual cost for the health services combined was 27 per cent lower for people who used residential aged care (permanent residential and/or respite care) in their last year of life than for those who did not use such care in their final year ($12,500 and $17,000 per person).

“However, given that costs of a range of health care services provided in residential aged care were not included in this study, total health care costs for people using residential aged care are likely to be underestimated,” Mr Juckes said. “Further work is needed to examine what proportion of aged care costs are for people in their last year of life.”

Total health service costs were highest among people who died from cancer, followed by those who died from cardiovascular diseases. These two disease groups had the highest number of deaths over the period.

The NIHSI AA is an enduring linked data asset that brings together deidentified information on hospital care, deaths, residential aged care services, prescription medication, and services under the MBS. Examining this linked data asset can provide greater insight on of the health of Australians, their care pathways and the associated costs to Australia’s health and aged care systems. 

“By bringing together different sources of data to tell a more complete story, the study provides an opportunity to address gaps in our understanding of the impacts of population growth, ageing, increased longevity, a growing economy, and increased spending on health,” Mr Juckes said.

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