2/21/2013· Life Expectancy
By: Vera Dolan
The advantages of a life expectancy using life insurance underwriting and life settlement methods include:
Originally publised in Journal of Life Care Planning, Vol 19, No. 1, (10-58)
The present paper is a review of life expectancy and life expectancy determination in forensic applications, including life care planning. Part One discusses basic aspects of life expectancy determination and five current approaches to the challenge. Part Two begins with general considerations regarding modification of the standard population life table for individual comorbidities and other influences on mortality, and then provides a stepwise analysis of life expectancy determination by this method, including selection of the baseline life table, identification of relevant medical comorbidities and other conditions, quantification of mortality effects of those factors with information from the medical literature, combination of mortality indices to generate adjusted mortality rates, and construction of a new, modified life table reflecting the effects of mortality influences. Part Three reviews potential future developments in life expectancy determination, and Part Four furnishes a summary. Appendices provide support for the text.
This article addresses some of the strengths, weaknesses, and controversies in current practice of life expectancy determination, with the goal of furthering understanding and application of the science (and art) involved in achieving the most scientifically-accurate and valid results in life care planning. Specific aspects discussed include a) selection of the baseline life table; b) identification of relevant influences for the individual under scrutiny, including the multiplicity of elements, both positive and negative; the effects of socioeconomic factors, functional status, and medical care; and potential sources of information; c) accurate quantification of influences, encompassing the proper use of mortality indices; d) combination of baseline mortality rates and comorbidity effects, including overlap in mortality effects of relevant conditions; “double-dipping” by use of standard life tables; and adjustment for secular trends in mortality; and e) generation of a modified life table and adjusted life expectancy. The article ends with a brief discussion of possible future advances in the science and practice of life expectancy determination.
Deutsch (2010) defined life care planning as “a consistent methodology for analyzing all of the needs dictated by the onset of a catastrophic disability through the end of life expectancy” (p. 4). Life expectancy determination is an integral component of the life care plan, including in litigation estate and pension planning (OEDC, 2011). The accuracy of the estimate is critical for the ethical nature economic and legal legitimacy of the proposal. Goodrich (2013) in an editorial opined that “… life expectancy is a critical issue and arguably the single most significant variable affecting the total value of the life care plan” (p. 1).
Most life care planners will defer the determination of accurate life expectancy to standard population life tables or other experts involved in a case. However, knowledge of the considerations and process behind life expectancy determination may assist the planner in generating the most valid strategy for a given individual. Kush et al. (2013) anticipated that:
As life care planners become more familiar with the concept and science of life expectancy, we are hopeful that collaborative efforts to advance the knowledge of the impact of one on the other may take place, and real scientific evidence may emerge. (p. 45)
There is still a relative lack of specific information on life expectancy determination for life care planning, although a series of articles in the July 2013 issue of the Journal of Life Care Planning presented some basic considerations (Krause & Saunders, 2013; Kush et al., 2013; Rosen et al., 2013; Shavelle & Strauss, 2013).
The human lifespan or survival time – the actual number of years that a person will live – is the outcome of a complex calculus including genetic, developmental, environmental, physiological, psychobehavioral, and sociocultural influences (Ben-Haim et al., 2018; Crosse, 2011). In the present context, life expectancy refers to the average anticipated survival time, or years of life remaining, of members of a defined population group of people (population) with certain identifying demographic characteristics such as gender, geographic location, nationality, and race, with which an individual of interest may be identified (Giannias et al., 2014). Life expectancy is a population parameter, a statistical construct based on the actual mortality rate of members of the group in a given time interval, determined by combining a series of age-specific mortality rates in a life table to replicate the mortality experience of the population (Vachon & Sestier, 2013).1 Day et al. (2015a) described life expectancy as “… the average for an individual represented by a given cohort [group of people] if such an individual could (hypothetically) live life repeatedly” (p. 1106).
By definition, life expectancy is an average value for members of a population; it is currently not possible to accurately predict any given individual’s exact lifespan or survival time (i.e., the number of years, months, and days of life remaining), but it is both necessary and feasible to determine summary measures of survival likelihood (Shavelle & Delaney, 2010). Tolley et al. (2016) observed that “…only an answer as a statistical probability can be obtained. A statistical answer entails an average or ‘expected value’ with an associated level of uncertainty” (p. 262). Singer (2005) concluded that “The best we can do in our precise life table calculation of life expectancy is to admit that this is a conditional estimate, and that its future forecast is NOT an equally precise estimate” (p. 105).
Life expectancy is not the same as median survival time, which is defined as the “middle” anticipated lifespan of a population (the 50th percentile), or the point at which half of the members will be deceased (i.e., live less) and half will be alive (i.e., live more).2 Median survival is generally less susceptible to the presence of unusual or outlying results (DeVivo, 2002), but may underestimate life expectancy in conditions with high initial or early mortality such as severe myocardial infarction (MI), cerebrovascular accident (CVA), or trauma (Anderson, 2002). Median survival may be used in the legal setting to satisfy the condition of “more likely than not”, but is a different quantity from life expectancy, with its own uses, such as determination of probabilities of survival at a particular age or for a given duration (Vachon, 2019). Tolley et al. (2016) argued that the most relevant measure of life expectancy probability, “more likely than not”, was the interval between the 25th and 75th percentiles (as determined from the life table), with the latter most important as the upper boundary of the range of most probable survival (p. 267).
Life expectancy serves as a key indicator of development and health in a population and is a basic guide to economic and social planning and policy, such as social security systems (Wilmoth, 2000).
Reasonably accurate estimation of life expectancy (i.e., prognosis) is important in determination of the validity, timing, and application of screening tests for medical conditions. It is critical for establishing appropriateness and cost-utility of treatment in disease conditions which are likely to result in limited lifespan, such as cancer (Gill, 2012; Yourman et al., 2012).
Life expectancy determination has obvious implications for disability, health, life, and long-term care insurance. It is used in underwriting and pricing of insurance products and essential to reasonable forecasting of future payments in annuity instruments such as those funding structured settlements (Reid, 2013; Ryan & Harbin, 2006) as well as valuation in life settlement investment (Bhuyan, 2009). Other related applications include Medical Cost Projections (MCPs) and Medicare Set-Asides (MSAs). Life expectancy determination has a prominent role in personal financial and particularly retirement planning (Krueger, 2011).
Life expectancy is widely employed as an index of reduced survival in the establishment of damages and compensation (Brookshire et al., 2007), e.g., in wrongful death actions (Ireland, 2016).
Accurate life expectancy determination is a crucial facet of both qualitative and quantitative life care planning (Day et al., 2015b). However, as noted, life care planners do not routinely perform life expectancy determination (unless they are specifically qualified to do so); many rely upon standard life tables such as those published by the U. S. National Center for Health Statistics (NCHS; Arias & Xu, 2019), without adjustment, for baseline values, and defer more precise opinion on life expectancy to other experts such as biostatisticians, epidemiologists, and forensic economists. Without specialized education and experience, physicians may have no expertise in life expectancy determination (see Anecdotal or Experiential Opinions by Clinicians below), although standalone certification in life care planning has been available for physicians, particularly specialists in physical medicine and rehabilitation, or physiatry, since 2013 (CPLCP Certification Board, 2020; Rosen et al., 2013).
In epidemiology, public health, biostatistics, and other areas of scientific evaluation, parameters such as life expectancy have several important characteristics. Validity is the extent to which the life expectancy determination measures what it is intended to measure (the average expected length of life), and accuracy is the degree to which the life expectancy represents the true value of the eventual lifespan) of the individual; in life expectancy determination they may be considered to be roughly synonymous. Both can be compromised by bias or systematic error, or uncontrolled and/ or unrecognized influences on life expectancy which are not considered or recognized in an analysis. Reliability is the degree to which repeated applications of the life expectancy determination procedure will provide the same or similar result, and precision is how close repeated trials will be to each other; these also be thought of as roughly synonymous, although reliability generally refers to the process, and precision to the end result, of such a determination (Trajkovic, 2008).
Inaccurate life expectancy determination in life care planning presents significant ethical and moral risks. Underestimation of life expectancy (in which case the individual outlives the expectancy) may result in unmet need for services not included in the life care plan and inadequate provision of resources for the individual’s requirements. Overestimation of life expectancy (in which case the person dies before the anticipated time) may result in unfair or wasteful provision of excessive assets for the reasonable needs of the individual. Goodrich (2013) declared that “…the life care planner has a fiduciary responsibility to adequately fund a plan that will allow the evaluee to maximize his or her health and independence regardless of retention from the plaintiff or the defendant” (p. 1-1). There are a number of other sources of ethical guidance for the life care planner:
There are at least six methods of life expectancy appraisal presently in common use: this section addresses a) anecdotal opinion by clinicians, b) use of unmodified population life tables, c) “rating up”, d) use of observed life expectancy, and e) clinical prediction models, and Part Two concentrates on life table modification.3 (It should be noted that all of these techniques focus predominantly or completely on negative influences on life expectancy. Positive influences on life expectancy are discussed in Part Two, Step Two below.).
This approach involves a subjective impression or judgment of the individual providing the life expectancy determination, usually a physician, relying heavily or solely upon clinical professional observations, and experience. However, Day & Reynolds (2015) asserted that “A medical degree (and/or clinical experience) is neither a necessary nor a sufficient qualification for being an expert on life expectancy” (p. 2 of 6). This tactic often does not include application of formal statistical analysis or use of the life tables (the latter of which is basic to life expectancy determination; see discussion in next section), or any systematic process leading to the conclusion. Vachon (2020) commented that “Life expectancy derives from a scientific calculation based on mortality rates, not from medical insight. No amount of clinical introspection will generate a life table.” Physicians are often not aware of medical evidence on longevity for a given condition, and their clinical experience may be limited to those with recent injuries, excluding long-term survivors (Krause, 2002). As a result of these shortcomings, these life expectancy opinions are not robust, subject to many sources of bias and error (Christakis, 1999; Vachon, 2019), and vulnerable to multiple lines of attack by opposing counsel (Rice et al., 2000; Strauss & Shavelle, 1998a). Sammon et al. (2015) found accuracy of anecdotal appraisal to be inferior to actuarial methods; clinicians generally underestimate life expectancy (Clarke et al., 2009b; Leung et al., 2012) and demonstrate great variability in their estimates (Wirth & Sieber, 2012); they are particularly inaccurate in cancer patients (Glare et al., 2003; Walz et al., 2007; Wilson et al., 2005).
Life expectancy is determined in defined collections of individuals, either by use of census and other demographic data to generate standard life or mortality tables or use of proprietary client information to produce insurance tables. The final life expectancy value represents a summary of the much more extensive information contained in the life table, such as age-specific mortality rates and annual survival probabilities (Kush et al., 2013). Day et al. (2015b) contended that “Any rational, evidence-based assessment of life expectancy must be associated with a corresponding life table” (p. 254).
Life tables express the survival experience of a group under the influence of a process, in this case mortality (Burch. . .
Garson M. Caruso, MD, MPH, PA, CLCP, FACOEM, FIAIME, is a board certified Occupational Physician in private consulting practice with extensive clinical and administrative experience in emergency and occupational medicine. In litigation matters, his services include Independent Medical Evaluations, written reports, depositions, and trial testimony as needed. As a consultant, Dr. Caruso has performed occupational health services and consulting for organizations including Lockheed Martin, Bechtel Aberdeen, PepsiCo, Dean Foods, The New York Transit Authority, and multiple Johns Hopkins Medical Institutions. He has very broad and in-depth case management and file review experience involving complex disability and workers’ compensation claims.
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2/21/2013· Life Expectancy
By: Vera Dolan
The advantages of a life expectancy using life insurance underwriting and life settlement methods include:
3/26/2015· Life Expectancy
How funds are handled after the settlement of a case reflects the competency and knowledge of attorneys and recognizes their outstanding legal skills. This article focuses on the management of settlement proceeds and the maintenance aspect of the care of a client with a disability when that client's financial health is turned over to a trust attorney, relationship manager, financial planner, trust officer or estate planner.
4/28/2015· Life Expectancy
THIS ARTICLE DESCRIBES HOW Life Care Planners can help trust officers, relationship managers, estate planners and attorneys determine the future monetary requirements, in actual dollars, of a catastrophically disabled, pediatric or geriatric client. This can be done through the creation of a Life Care Plan for that individual's lifetime. Case histories are used to demonstrate how LCPs address the complex needs of such clients. The article concludes with a discussion of the ways in which the discipline of Life Care Planning complements the expertise of the trust officer.