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Medical Risk Appraisaland

Life Expectancy Program Illustration

Illustrating a Basic Approach to Life Expectancy in Medically Impaired People

Anthony F. Milano, M.D., M.P.H. July 4, 2005

AMDG

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CONTENTS SLIDES

Communicating with Dr. Milano 3

Life Expectancy Program Overview 4

Preface Disclaimer 5, 6

Acknowledgements 7

Life Expectancy Procedures & Methods for Preparing Reports 8

Hypothetical Example: Male at Attained Age 66 Years 8

Caveats: The Impact of Comorbidity on Life Expectancy 9

Observed Male Life Expectancy at Attained Age 66-Years 10

Expected (Normal) Male Life Expectancy at Attained Age 66 years 11

Graph of Comparative Life Expectancy 12

Report Conclusion 12

Life Expectancy Table: Column Designations 13

Glossary and Life Table Descriptive Summary 13, 14

References 15, 16

Adapted from: U.S. Decennial Life Tables for 1989-19911 , Richard B. Singer, M.D2,3,4 Terry W. Anderson, MD, PhD5

and the American Academy of Insurance Medicine (AAIM).9

3

ANTHONY F. MILANO, MD, MA, MPH Milano Life Expectancy Services, Inc.

Consultant Medical Risk Appraisal & Life Expectancy

Phone: (508) 362-3695 P.O. Box 127 amilanomd@comcast.net

Fax: (508) 362-3695 Cummaquid, MA, 02637 www.LifeExpectancyAmerica.com

Colonel, USAF, MC, FS, Retired

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This illustration is a brief abstract of the most salient points contained in the complete 29-page program used by the author. I t highlights procedures and methodologies with a hypothetical example of a 66-year old medically impaired male. Tabular summations of multiple risk factor excess death rates (EDRs) are used for the calculation of reduced individual life expectancy for future attained ages. Age and sex-specific tables & graphic presentations of comparative mortality and life expectancy are highlighted. Spreadsheet software technology for automated life table construction is not included with thisillustrated abstract.

Life Expectancy Program Overview

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PREFACE

Epidemiologic principles and standard actuarial methods provide the scientific framework foraccurately measuring reduced individual life expectancy caused by the additional mortality associated with various risk factors, diseases and disabilities. These have been well described by Doctors R. B. Singer, T. W. Anderson and others interested in the Vital Statistics of the United States and in the preparation of population-based life tables (References 1-9).

Mortality rates by age, sex and race for a specific period may be summarized by the life table method to obtain measures of comparative longevity. The life tables contained herein are based on age, sex & race-specific death rates and use the current U.S. Decennial Life Tables

for the period 1989-911 as the the standard of comparison for individual life expectancy.

This spreadsheet computer program incorporates an enabling software technology designed to make explicit the automated construction of impairment-specific life expectancy tables. With its accompanying analytic report, it is intended to provide physicians, lawyers, risk managers and others a succinct understanding of the short and long term impact of the additional mortality associated with various diseases, injuries, disabilities & other risk factors, and their morbid contribution to diminished longevity in biostatistical, social, legal and economic terms.

As a part of the assessment of damages or lifetime expenses, it has special relevance for providing fact-based expert opinion on reduced life expectancy in negotiating economic damages limited to the number of years of life lost in medical malpractice tort cases.

Also in this context, very long-term future mortality has special insurance and legal relevance. As a part of life expectancy, the financial risk here resides not in early mortality but in longevity, as emphasized in the articles on Structured Settlement annuities by Schmidt and

Singer,6,7 and on life expectancy in persons with chronic disabilities by Strauss and Shavelle. 8

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The index of mortality inputs to the software for the calculation of reduced life expectancy is an individual's profile of risk factors expressed as summated excess death rate values (EDRs) to 4 decimal places for future attained age intervals. The output is the life table to age 109 and it's derived quantities including projected excess mortality and life expectancy matched by age, sex and race with the appropriate U.S. Decennial Life Table for each year of attained age (see illustrations in Methods and Examples sections).

A subject-classified source to provide follow-up data for risk factor excess death rates (EDRs)

by age and duration is contained in a recently published bibliographic index.9 Other reliable sources for mortality information such as the National Cancer Institute's Surveillance,

Epidemiology and End-Results (SEER) database10 are available as well as published clinical follow-up studies in the medical and actuarial literature.

This Program I llustration may be helpful to doctors and lawyers in deciding whether expert Medical Risk Appraisal and Life Expectancy services will be appropriate in tort cases of medical malpractice advocacy or defense.

DI SCLAI MER

The sources quoted are believed to be reliable, but scientific information is constantly updatedand more pertinent sources may be available. The author disclaims any responsibility with respect to loss or damage caused, or alleged to be caused, directly or indirectly by the information contained in this program.

Anthony F. Milano, MD, MPH

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ACKNOWLEDGEMENTS

I am most grateful to Richard B. Singer, M.D. – retired life insurance medical director and insurance industry consultant – for his friendship, formal and informal tutorials, practical advice and scholarly encouragement, and, many medical-actuarial and technical publications concerning medical risk appraisal and life expectancy. This succinct Program I llustration of the complete 29 page program borrows heavily from the methodology, formats, scholarship and practical experience of Dr. Singer in preparing legally acceptable reports on the life expectancy of the principal in a tort case and serving as an expert witness in cases of medical malpractice advocacy or defense.

I also wish to thank the American Academy of Insurance Medicine (AAIM) for providing aspectsof the index of mortality in the official text of courses sponsored by the Board of InsuranceMedicine useful in the development of impairment-specific life expectancy tables by age, sex and race.

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Life Expectancy Procedures & Methods for Preparing Reports

1. Describe the situation; legal suit, structured settlement, annuity, disability, viatical, etc.2. Briefly summarize the medical history3. Describe each risk factor in turn & cite the most suitable mortality data for each risk factor4. Prepare a table summating the EDR values (excess death rates) for future attained age intervals as far as the data permit, starting at the client's current age of Age x years, (see hypothetical example).5. Use the total EDR added up as the sum of the individual EDR values for the subject's life table preparation6. Construct by computer, a life table for the most accurate possible calculation of life expectancy in a group of men (or women) with a risk pattern similar to the client's.7. Render conclusion Conclusion for hypothetical example: See slide 128. Provide references to the studies cited at the end of the report

Hypothetical Example: 66 year old male (Mr. J ohn Doe) with multiple risk factors.

Summated Risk Factor EDR Values for Future Attained Age Intervals.Risk Factor Age 60-70 71-75 76-80 81 and upOverweight 10 10 10 10Systolic hypertension 10 30 30 30Smoking history 5 10 10 15Bladder cancer 37 28 12 12Aneurysm repair 38 49 49 49Paraplegia 18 33 37 41Mild Obstr. Sleep apnea 0 0 0 0Traumatic Leg Amputation 0 0 0 0Preliminary total 118 143 148 157Adjusted totals

These are the EDR values used in decimal format in the observed (subject) life table.(See observed life table example: slide 10)

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Observed (Male Subject) LE Using Summated EDRs for Future Attained Ages*

Age x q' EDR Proj. q lx dx Lx Tx ex

life expectancy

66 0.02586 0.1180 0.1439 1000.00 143.86 928.07 5,465.33 5.4767 0.02793 0.1180 0.1459 856.14 124.94 793.67 4,537.26 5.3068 0.03030 0.1180 0.1483 731.20 108.44 676.98 3,743.59 5.1269 0.03301 0.1180 0.1510 622.77 94.04 575.74 3,066.60 4.9270 0.03607 0.1180 0.1541 528.72 81.46 487.99 2,490.86 4.7171 0.03945 0.1430 0.1825 447.26 81.60 406.46 2,002.87 4.4872 0.04310 0.1430 0.1861 365.66 68.05 331.63 1,596.41 4.3773 0.04690 0.1430 0.1899 297.61 56.52 269.35 1,264.77 4.2574 0.05079 0.1430 0.1938 241.09 46.72 217.73 995.42 4.1375 0.05492 0.1430 0.1979 194.37 38.47 175.14 777.69 4.0076 0.05943 0.1480 0.2074 155.90 32.34 139.73 602.55 3.8677 0.06430 0.1480 0.2123 123.56 26.23 110.45 462.82 3.7578 0.06969 0.1480 0.2177 97.33 21.19 86.74 352.37 3.6279 0.07576 0.1480 0.2238 76.14 17.04 67.62 265.63 3.4980 0.08283 0.1480 0.2308 59.11 13.64 52.28 198.01 3.3581 0.09078 0.1570 0.2478 45.46 11.26 39.83 145.73 3.2182 0.09911 0.1570 0.2561 34.20 8.76 29.82 105.90 3.1083 0.10718 0.1570 0.2642 25.44 6.72 22.08 76.08 2.9984 0.11497 0.1570 0.2720 18.72 5.09 16.17 54.00 2.8885 0.12378 0.1570 0.2808 13.63 3.83 11.71 37.83 2.7886 0.13424 0.1570 0.2912 9.80 2.85 8.37 26.11 2.6687 0.14560 0.1570 0.3026 6.95 2.10 5.90 17.74 2.5588 0.15770 0.1570 0.3147 4.84 1.52 4.08 11.84 2.4489 0.17058 0.1570 0.3276 3.32 1.09 2.78 7.76 2.3490 0.18460 0.1570 0.3416 2.23 0.76 1.85 4.98 2.2391 0.19998 0.1570 0.3570 1.47 0.52 1.21 3.13 2.1392 0.21596 0.1570 0.3730 0.95 0.35 0.77 1.92 2.0493 0.23158 0.1570 0.3886 0.59 0.23 0.48 1.16 1.9594 0.24618 0.1570 0.4032 0.36 0.15 0.29 0.68 1.8795 0.26004 0.1570 0.4170 0.22 0.09 0.17 0.39 1.8096 0.27536 0.1570 0.4324 0.13 0.05 0.10 0.22 1.7397 0.28943 0.1570 0.4464 0.07 0.03 0.06 0.12 1.6698 0.30390 0.1570 0.4609 0.04 0.02 0.03 0.06 1.6099 0.31910 0.1570 0.4761 0.02 0.01 0.02 0.03 1.53

100 0.33505 0.1570 0.4921 0.01 0.01 0.01 0.02 1.47101 0.35181 0.1570 0.5088 0.01 0.00 0.00 0.01 1.41102 0.36940 0.1570 0.5264 0.00 0.00 0.00 0.00 1.35103 0.38787 0.1570 0.5449 0.00 0.00 0.00 0.00 1.29104 0.40726 0.1570 0.5643 0.00 0.00 0.00 0.00 1.23105 0.42762 0.1570 0.5846 0.00 0.00 0.00 0.00 1.16106 0.44900 0.1570 0.6060 0.00 0.00 0.00 0.00 1.10107 0.47145 0.1570 0.6285 0.00 0.00 0.00 0.00 1.02108 0.49503 0.1570 0.6520 0.00 0.00 0.00 0.00 0.90109 0.51978 0.1570 0.6768 0.00 0.00 0.00 0.00 0.66110

*Basis of expected mortality: U.S. Decennial Life Tables 1989-91; general population

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Expected (Normal) Male Life Expectancy at Attained Age 66 Years*life expectancy

Age x q' EDR Proj. q lx dx Lx Tx ex

66 0.02586 0.0000 0.0259 722.01 18.67 712.68 10,456.52 14.4867 0.02793 0.0000 0.0279 703.34 19.64 693.52 9,743.84 13.8568 0.03030 0.0000 0.0303 683.70 20.72 673.34 9,050.32 13.2469 0.03301 0.0000 0.0330 662.98 21.88 652.04 8,376.99 12.6470 0.03607 0.0000 0.0361 641.09 23.12 629.53 7,724.95 12.0571 0.03945 0.0000 0.0395 617.97 24.38 605.78 7,095.42 11.4872 0.04310 0.0000 0.0431 593.59 25.58 580.80 6,489.64 10.9373 0.04690 0.0000 0.0469 568.01 26.64 554.69 5,908.84 10.4074 0.05079 0.0000 0.0508 541.37 27.50 527.62 5,354.15 9.8975 0.05492 0.0000 0.0549 513.87 28.22 499.76 4,826.53 9.3976 0.05943 0.0000 0.0594 485.65 28.86 471.22 4,326.77 8.9177 0.06430 0.0000 0.0643 456.79 29.37 442.10 3,855.55 8.4478 0.06969 0.0000 0.0697 427.42 29.79 412.52 3,413.45 7.9979 0.07576 0.0000 0.0758 397.63 30.12 382.57 3,000.93 7.5580 0.08283 0.0000 0.0828 367.51 30.44 352.29 2,618.36 7.1281 0.09078 0.0000 0.0908 337.06 30.60 321.77 2,266.07 6.7282 0.09911 0.0000 0.0991 306.47 30.37 291.28 1,944.31 6.3483 0.10718 0.0000 0.1072 276.09 29.59 261.30 1,653.03 5.9984 0.11497 0.0000 0.1150 246.50 28.34 232.33 1,391.73 5.6585 0.12378 0.0000 0.1238 218.16 27.00 204.66 1,159.40 5.3186 0.13424 0.0000 0.1342 191.16 25.66 178.33 954.74 4.9987 0.14560 0.0000 0.1456 165.50 24.10 153.45 776.42 4.6988 0.15770 0.0000 0.1577 141.40 22.30 130.25 622.97 4.4189 0.17058 0.0000 0.1706 119.10 20.32 108.94 492.72 4.1490 0.18460 0.0000 0.1846 98.78 18.24 89.67 383.78 3.8891 0.19998 0.0000 0.2000 80.55 16.11 72.49 294.11 3.6592 0.21596 0.0000 0.2160 64.44 13.92 57.48 221.61 3.4493 0.23158 0.0000 0.2316 50.52 11.70 44.67 164.13 3.2594 0.24618 0.0000 0.2462 38.82 9.56 34.04 119.46 3.0895 0.26004 0.0000 0.2600 29.27 7.61 25.46 85.41 2.9296 0.27536 0.0000 0.2754 21.66 5.96 18.67 59.95 2.7797 0.28943 0.0000 0.2894 15.69 4.54 13.42 41.28 2.6398 0.30390 0.0000 0.3039 11.15 3.39 9.46 27.86 2.5099 0.31910 0.0000 0.3191 7.76 2.48 6.52 18.40 2.37

100 0.33505 0.0000 0.3351 5.29 1.77 4.40 11.88 2.25101 0.35181 0.0000 0.3518 3.51 1.24 2.90 7.48 2.13102 0.36940 0.0000 0.3694 2.28 0.84 1.86 4.58 2.01103 0.38787 0.0000 0.3879 1.44 0.56 1.16 2.72 1.90104 0.40726 0.0000 0.4073 0.88 0.36 0.70 1.56 1.78105 0.42762 0.0000 0.4276 0.52 0.22 0.41 0.86 1.66106 0.44900 0.0000 0.4490 0.30 0.13 0.23 0.45 1.52107 0.47145 0.0000 0.4715 0.16 0.08 0.13 0.22 1.36108 0.49503 0.0000 0.4950 0.09 0.04 0.07 0.10 1.13109 0.51978 0.0000 0.5198 0.04 0.02 0.03 0.03 0.74110

*Basis of expected mortality: U.S. Decennial Life Tables 1989-91; general population

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Comparison of Male Expected (Normal) LE vs. Observed Life Expectancy in Hypothetical Example*

Age x Normal LE Observed LE66 14.48 5.4767 13.85 5.3068 13.24 5.1269 12.64 4.9270 12.05 4.7171 11.48 4.4872 10.93 4.3773 10.40 4.2574 9.89 4.1375 9.39 4.0076 8.91 3.8677 8.44 3.7578 7.99 3.6279 7.55 3.4980 7.12 3.3581 6.72 3.2182 6.34 3.1083 5.99 2.9984 5.65 2.8885 5.31 2.7886 4.99 2.6687 4.69 2.5588 4.41 2.4489 4.14 2.3490 3.88 2.23

91 3.65 2.13 Report Conclusion92 3.44 2.0493 3.25 1.95 On the basis of the foregoing analysis and the attached life table, I conclude with a 94 3.08 1.87 reasonable degree of medical probability, that the life expectancy of a group of men 95 2.92 1.80 age 66-years, with a risk pattern similar to that present in Mr. Clark, is 5.5 years. 96 2.77 1.73 This is a reduction of 62% below the life expectancy of 14.5 years in the 1989-91 97 2.63 1.66 Decennial U.S. Life Table for the male population.98 2.50 1.6099 2.37 1.53

100 2.25 1.47101 2.13 1.41102 2.01 1.35103 1.90 1.29104 1.78 1.23105 1.66 1.16106 1.52 1.10107 1.36 1.02108 1.13 0.90109 0.74 0.66 *Basis of expected mortality: U.S. Decennial Life Tables 1989-91; general population

Normal Male LE vs. Observed Male LE

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

Attained Age 66 to Age 109

Ye

ars

Lif

e E

xp

ec

tan

cy

Normal LE

Observed LE

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Life Expectancy Table: Column Designations

Column A B C D E F G H IAge x q' EDR Proj. q lx dx Lx Tx ex

Age x 0.0000 1000.00 0.00 1000.00 2,000.00 2.00Age x+1 0.0000 1000.00 0.00 1000.00 1,000.00 1.00

(to Age 109)

Glossary and Explanation of LE Table Columns

Life expectancy (ex): the average number of years lived by a group of persons from their

starting age until all have died. see also:

A. Agex refers to the last birthday; starts with age used as the starting age in the report.

All attained ages (age x, age x+1, age x+2, etc.) from the starting age to age 109 (the highest shown in the Decennial U.S. Life Tables) must have data calculated in order to make the most accurate calculation of life expectancy.

B. q' refers to the annual population mortality rate; derived by age, sex and race from the appropriate column and rows in the reference U.S. Life Table. back

C. Decimal EDR: Excess Death Rate is inserted in the top row of the age sequence for EDR(generally a quinquennial interval, except for the last which is carried to age 109). The same EDRis copied into the remaining years of the sequence. All impairment-specific EDR values, of course,are tailored to the individual case, must be calculated in advance and inserted in the appropriate attained age intervals. EDR values are expressed as decimals to the 4th decimal place. back

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D. Projected q: The projected annual mortality rate of the group at increased risk is derived fromdata in columns B and C; projected q = q' + EDR. back

E. "Cohort" (l): is used to designate the number alive at the start, and the survivors alive at the start of each subsequent year of attained age. The arbitrary number of 1000.00 is used for thestarting age, instead of the "100,000 born alive" for age 0-1 in the U.S. Life Table. (A decimal placeis carried for reference when survivors become very few because of attrition by death).The number alive at the second year of follow-up (attained Age x+1) is obtained by subtracting d from Cohort in the preceeding year: Cohort (Age x+1) = Cohort (Age x) – d (Age x) = column E4 – F4.This is the basis of linkage between one row or year of follow-up and the next. back

F. Deaths (d): They are derived as the product of projected q and Cohort:d = (proj. q)(Cohort). Deaths during a year of attained age must be subtracted from the Cohort toobtain the number of survivors alive at the start of the next year of attained age, for instance:(As previously noted, Cohort age 61 = Cohort age 60 – d 60. This attrition is the basis of linking the lifetable calculations for a given year of age with those for the next year). back

G. (L) is the average number exposed to risk during the full year of attained age, or the number atrisk at the midpoint of the year, approximated as: L = Cohort – (0.5)*(d) back

H. (T) is the sum total of all values of L from the current year through age 109. T = ΣL. back

I. (ex) is the Life Expectancy for all attained ages. Ex = T/Cohort. When T/Cohort becomes 0.0/0.0,

life expectancy does not become indeterminate; instead, successive values are still displayed. The reason for this is that 16 decimal places are carried for arithmetical calculations in the memoryof the computer but not displayed in the Table of Observed Life Expectancy, for which only two decimalplaces has been selected for these variables. back

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References

1. U.S. Department of Health and Human Services, National Center for Health Statistics. U.S. Decennial LifeTables for 1989-91. Volume 1, Number 1. Hyattsville, Maryland (1997). (DHHS Publication No. PHS-98-1150-1).

2. Singer RB. A method of Relating Life Expectancy in the U.S. Population Life Tables to Excess Mortality.J Ins Med 1992; 24:32-41.

3. Singer RB. The Impact of Excess Mortality on Life Expectancy - Tables Based on Levels of EDR (Excess Death Rate) and Rates in the U.S. Decennial Life Tables for 1989-91 (White Population). J Ins Med 1998; 30(3): 128-146.

4. Singer RB, Kita MW, and Avery JA. A Descriptive Index of Mortality Studies from Selected Sources 1951-1995 withSupplement Index to 2000. Westwood, Massachusetts, CMAS Books (2001).

5. Anderson TW. Life Expectancy in Court– A Textbook for Doctors and Lawyers . Vancouver, British Columbia, Canada,Teviot Press (2002).

6. Schmidt C and Singer RB. Structured Settlement Annuities Part I: Overview and the Underwriting Process. J Ins Med 2000;32: 131-136

7. Singer RB and Schmidt C. Structured Settlement Annuities Part II: Mortality Experience 1967-1995 and the Estimation ofLife Expectancy. J Ins Med 2000: 32: 137-154.

8. Strauss DJ and Shavelle RM. Life Expectancy of Persons with Chronic Disabilities. J Ins Med 1998; 30: 96-108.

9. Singer RB, Kita MW and Avery JR. Medical Risks, 1991 Compend of Mortality and Morbidity. Praeger, Westport, Conn.,1991: Chapter 2: Pokorsky RJ. Mortality Methodology and Analysis Seminar; 4-36.

10. SEER*Stat Program: Cancer Statistics Branch, Surveillance Research Program, Division of Cancer Control and PopulationSciences, National Cancer Institute suite 504, MSC8316, 6116 Executive Boulevard, Bethesda, MD 20892-8316

11. Jay F. Piccirillo, MD, FACS. The Impact of Comorbidity on Cancer Statistics: MS PowerPoint Address to the St. LouisSurgical Society November 6, 2001. Washington University School of Medicine, St. Louis, Missouri. Research Supported by

National Cancer Institute Grant Number: R25 CA 68304.

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References continued

12. Kaplan MH, Feinstein AR. The Importance of Classifying Initial Co-morbidity in Evaluating the Outcome of Diabetes Mellitus.J. Chron Dis 1974; 27: 387-404.

13. Egede LE, Nietert PJ, Zheng D. Depression and All-Cause and Coronary Heart Disease Mortality Among Adults With andWithout Diabetes. Diabetes Care 2005 (June); 28: 1339-1345.

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