What is it about?

Planners, actuaries and others involved in forecasting capacity and costs must manipulate historical data. Data from calendar/financial year totals has been assumed to be adequate and reliable. This relies on the assumption that year-to-year differences do not arise from patterns concealed in the data. While the seasonal cycle is widely recognised, longer term patterns such as disease outbreaks will act to modify annual demand and costs. Monthly data relating to deaths in local government areas in England and Wales is used to demonstrate curious semi-permanent bursts of “high” behaviour. There is no seasonal pattern for the start of these events and the sudden switch to high deaths can occur at any time, even in immediately adjacent areas. Higher deaths, and related demand and costs, endure for around 12-months before they suddenly revert to the former level where they stay until the next of these curious “high” events. In England and Wales (and many other countries), a period of unexplained higher deaths, reduced life expectancy and health care and life insurance costs since 2011 appears to be coming to an end, and looks to have arisen from a coincidence of these events at sub-national level.

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Why is it important?

Death is a retrospective proxy for end-of-life costs. The trends in deaths are following patterns which are beyond anything expected from actuarial science.

Perspectives

This is part of a longer series showing that death, and end-of-life, is driving the marginal changes in health care demand and costs. If the trends in death are behaving in unique ways it then follows that health care costs may also be behaving in unique ways, beyond that previously thought possible. See http://www.hcaf.biz/2010/Publications_Full.pdf Also see a 4-part series on financial and capacity risk in health care at http://www.healthfinancejournal.com/~junland/index.php/johcf/issue/view/40

Dr Rodney P Jones
Healthcare Analysis & Forecasting

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This page is a summary of: The calendar year fallacy: The danger of reliance on calendar year data in end‐of‐life capacity and financial planning, The International Journal of Health Planning and Management, July 2019, Wiley, DOI: 10.1002/hpm.2838.
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