Welcome (back) to our Six Stones series. Our financial adviser, Jordan, is sharing as many tips, ideas and advice for people going through a divorce as a humble blog will allow. He’s staying away from specific financial advice – it’s all general advice over here, be sure to get personal financial advice before doing anything – but we hope you find some useful information in here as you navigate through/out of your divorce.
So far in our discussion of the Big Risks we all face, we’ve talked about Death and Disability – what that might mean for you and yours, financially, and how having a difficult conversation now can help remove all those worries you have at the back of your mind.
This week – what another awful conversation can mean for you. And in this post we’ll explore one possible path people can follow after that conversation – next week, we’ll talk about an alternative journey.
“I’m afraid I have bad news, the results were not what we were hoping for.”
So starts one of life’s truly awful discussions.
Perhaps it’s with an oncologist you’ve been referred to for a check of that lump.
Or a cardiologist trying to work out those chest pains.
Or an emergency room doctor in a sterile meeting room, talking about the coma your loved one is in after the accident.
Or the neurologist, who knows you were hoping that the forgetfulness wasn’t Alzheimer’s.
These discussions change the trajectory of your life and that of your loved ones.
The diagnosis you didn’t want to hear lasso’s around your waist and drags you down to the ground, before sinking the boots of aggressive treatment and – sometimes – palliative care in.
Statistics, Schmatistics
In my world, we’ve all heard the statistics around this sort of diagnosis – cancer, heart attack, strokes, coma, dementia, burns, the whole panoply of medical horror stories.
But the stat’s obscure the person sitting in the chair across from the doctor, not really hearing them, wondering just what the hell they’re going to do now.
Stat’s are useful to help us measure risk (stat’s inform our understanding of ‘likelihood’, remember) but they also introduce a wedge between us and the unavoidable reality of our very human frailties.
Likelihood
Unlike the comparatively rare possibility of becoming disabled, being diagnosed with what we call a ‘critical illness’ is, sadly, far from zero.
I’m not a big fan of talking statistics when we’re talking about such intensely personal tragedies, but here are some quick numbers:
– 145,000 new cases of cancer will be diagnosed in Australia this year[1];
– 50% of Australian’s will be diagnosed with cancer by the age of 85[2]
There are some statistics not rooted in disaster, though:
– The five-year survival rate for breast cancer is 91%[3];
– Cardiovascular disease kills one Australian every 12 minutes[4];
– Approximately 400,000 Australian’s have had a heart attack at some time in their lives[5];
– There are around 57,000 heart attack’s each year[6];
– Around 55,000 Australian’s have a stroke per year, 73% for the first time[7];
– 70% of stroke patients will be expected to survive, with half of them remaining permanently disabled a year after the stroke – and a third of them requiring permanent care in a nursing home or long-term care facility[8];
– For a 45-year old woman, the risk of having a stroke by age 85 is 1 in 5[9].
Now, one of the reason’s I’m loathe to quote this sort of information is that it seems tacky to distill this much suffering into statistics – especially because I’ve seen it done so often simply to ‘sell insurance’.
But I’ve decided to include them here to hopefully demonstrate that these things happen, these awful conversations are being had hundreds of time each day.
(An aside here to empathise with the doctors and specialists tasked with delivering such life-alteringly difficult news).
And for most of these people, I bet they didn’t think it’d happen to them.
Likelihood and Impact
Which brings us back to our fundamental risk equation – Likelihood x Impact.
The Likelihood, though not ‘high’, is much further from zero than I think any of us would like.
But what of the impact a critical illness can have?
Well, it’s fair to say that it’s devastating. But for the sakes of this paper, I’m going to focus on the financial impact of it all – the personal impact is, simply, too big to squeeze into this discussion.
The Stats, The Stats, The Stats
In researching this paper, I assembled quite the collection of stories, articles, tables, statistics and reports detailing the financial impact of serious illness.
I thought about incorporating them here, but even though the information is powerful, it still leaves you feeling cold.
It’s a terribly human reflex to believe – sub-consciously even – that it’s fine, it won’t happen to me. Statistics don’t really help in the face of that pure gut instinct.
So I’ve cut them out here, as much as I can, because I feel it’s better to talk about the impacts in a different way.
Sliding Doors
Let’s return to the poor soul getting the bad news in their doctor’s office. We’ll fast forward a few months.
They’ve started treatment – in this case it’s an aggressive cycle of chemotherapy to attack the cancer.
Once a week they have to find their way to the treatment centre. Walking to the station, then hopping on a train, then waiting for a bus isn’t really an option, so they’re forced to drive.
Well, for as long as they can, until they need to start either roping family and friends into chauffeur duty or start taking taxis.
Finding a parking spot isn’t the issue so much, not since they opened that big parking facility, but the $11 an hour rate adds up over a 4-5 hour visit. But it’s ‘only’ for 12 weeks, so it should ‘only’ be around $600-$700 in parking fees.
On the ward though, the costs aren’t too bad. They’re in the public system, so the out-of-pocket isn’t too bad.
Of course, they’ve had to take the day off work and so will their family or friend. The least she can do is buy them lunch on the way home.
The chemo leaves her feeling really, really nauseous, but there’s medication for that at the pharmacy. This isn’t included under Medicare, though, so it’s another cost.
Throw in a few doctor’s visits, some more scans, dressings for unexpected sores and infections and over-the-counter medication to help get through it and the costs start to pile up.
(If you’ll allow me one statistic – half of Australians with cancer have out-of-pocket costs in excess of $5,000[10]).
Could Be Worse
Let’s expand on this poor person’s unfortunate reality.
Say she bought a home a few years ago for her and the kids. She was sensible about it – big deposit, kept it reasonable, moved to a scruffy but up-and-coming area – but still has a mortgage of $400,000 on it.
At current rates, the repayment on this is around $1,943 a month[11]. This takes up around 40% of their current monthly income, leaving a touch over $2,900 to live on.
But, because of the severity of the treatment they’re not able to keep working full-time and even a 3-day week is proving incredibly challenging.
Her employer is understanding but can’t continue to support her indefinitely. So her pay has reduced by 40% now – making it $2,915 a month.
Let’s take the mortgage out of that, and she’s left with $972 a month to live on – around $245 a week, or $35 a day.
Turning the Screw
Bear with me while I make things even worse for our struggling heroine.
After three rounds of chemo and a round of radiotherapy, the cancer ‘isn’t responding how we’d hoped’ and she’s left with two options:
1. An immunotherapy programme being held in Sydney;
2. A therapy being trialled in Baltimore in the USA.
Option 1 would cost over $250,000; option 2 would involve moving to Baltimore for 3 months.
This leaves her in the unfortunate position of choosing between two options that might save her life – with money probably being the deciding factor.
Step Back a Little
Well, I think that’s enough pain to inflict for now – let’s dial it down a little. We’re simply to capture the impact of a serious illness – not drive us all to drink…
Imagine that the chemotherapy was working, so they’ve recommended another round. But now she’s changed her anti-nausea medication and is able to return to work for a few more days a month.
So there she is, sitting in the plastic, crackly, beige chair in the chemo room, hooked up to a beeping IV, surrounded by people in different stages of their own beneficially poisonous regimens.
As the poison gets pumped into her system, she’s sitting there on her phone, knocking out emails and messages.
Then she reaches into her bag, gets her laptop out and finishes off the slide deck for next Thursday’s presentation, edits her colleagues report and does a little more inbox cleaning.
She is, as most people do, finding a way to make it work.
There is, as we’ll explore in our next post, a different path, a different ‘sliding door’ that involves quite a different set of impacts.
References
[1] https://www.cancer.org.au/about-cancer/what-is-cancer/facts-and-figures.html
[2] Ibid.
[3] https://www.cancer.org.au/about-cancer/types-of-cancer/breast-cancer/
[4] https://www.heartfoundation.org.au/about-us/what-we-do/heart-disease-in-australia
[5] Ibid.
[6] Ibid.
[7] https://brainfoundation.org.au/disorders/stroke/#strokeaffectaustralians
[8] Ibid.
[9] Ibid.
[10] https://www.smh.com.au/healthcare/how-much-does-it-cost-to-have-cancer-20190412-p51dlf.html
[11] $400,000 at 4.14% for a 30-year term, variable loan, principal and interest repayments.
