The Role of the Economist in Life Care Planning
An economist is frequently called upon to compute the present value of future medical and care costs set forth in a life care plan prepared by a specialist. This chapter examines the content of life care plans from the point of view of an economist and identifies some areas of potential concern. The areas of concern from an economic point of view include: cost categories, items that should be included, timing of the items, the use of a range or annual averages of costs, and emphasis placed on trivial items. Two of the categories, medical services and medical commodities, are subsets of the Consumer Price Index (CPI) and are defined by the Bureau of Labor Statistics. A marginal cost, as it pertains to a life care plan in personal injury litigation, can be defined as an additional or extra cost that is incurred because, and only because, of the injury in question.