Want to Save Money on Health Care? Do Less of It. A Lot Less.

The primary goal of health wonks and health policy activists is to generate plans and systems that allow us to save money while also providing better health care. That’s what the folks at the Trust for America’s Health are presumably after with their new initiative to encourage policy makers to “move from sick care to health care” by spending more money on the prevention of chronic diseases. Given that about three quarters of U.S. health care spending is on chronic disease, much of which is theoretically preventable, this intuitively seems like a good idea that will save money by making us healthier.

Sadly, that’s not the case. Most economists agree that large scale efforts to spend more on prevention end up costing a lot more in the long run. The problem is that you end up spending a lot more on preventive care for people who were never in need of it just to catch the few who will eventually get the diease.  As the Congressional Budget Office noted during the ObamaCare debate, “for most preventive services, expanded utilization leads to higher, not lower, medical spending overall.” Other studies and experts have come to basically the same conclusion. Indeed, there’s been evidence that prevention programs don’t save money since at least the mid 1980s.

Yet we continue to see proposals to focus on prevention anyway. The appeal is understandable, but with a few narrow exceptions for things like hypertension screening, these proposals are usually misguided.

Much of the appeal, I suspect, stems from the desire to take active measures to save money on health care—to do something. But if we want to save money on health care, then that will probably involve doing less. Perhaps a lot less.

That’s because a large amount of medical care is probably unnecessary.

How much, exactly, varies based on the estimate: Health researchers at Dartmouth Institute for Health Policy and Clinical Practice have suggested that about 30 percent of clinical spending could be avoided without impacting health outcomes. Former Medicare administrator Donald Berwick helped author an estimate suggesting the figure could be as high as 37 percent. But the general consensus is that the number is high.

Much of that unnecessary spending comes from providing treatments that aren’t necessary or don’t work. The fact is, there’s still an awful lot we don’t know about medical care—including treatments we use already. A recent study published in the British Medical Journal reviewed randomized controlled studies for 3,000 medical treatments and found that we don’t know how well about half of them work. It’s a good bet that a fair number of them simply don’t work—or don’t work very well.

The trick, then, is to figure out how to do less. That’s hard, for multiple reasons. One is that people understandably resist the idea that we can probably do without lots of medical care. The other is that we don’t really know what’s worth doing and what’s not—and it can be really hard to tell. This is where liberal health wonks point to government-funded research and cost-cutting advisory panels like the Independent Payment Advisory Board built in ObamaCare. Time-intensive clinical studies and effectiveness research can provide us some information, but in many cases these only tell us what happens on average. That’s useful to know, but it’s not enough, because many individual cases might differ. Which is why I suspect there’s more to be gained by dispersing decisions about health care needs and costs amongst the individuals most affected by those decisions. Health care is enormously complex, and markets driven by individual preferences are usually the best way to manage complex information and preference ecosystems.

The more we do that, the more I suspect we’re likely to find that what happens is that, on the whole, we spend a lot less money, but aren’t noticeably less health. Several years ago, economist Robin Hanson wrote an essay for Cato Unbound pointing out that there’s not much correlation between a society’s overall level of medical spending and its health outcomes. Things like diet, exercise, and education levels are much more predictive. Hanson argued provocatively that we should be able to cut out somewhere in the range of half of our health spending without a significant overall reduction in health outcomes. That rough figure may be high, but the broader idea has merit. If we want to reduce health spending—which is an open question overall but is certainly necessary at the federal and state levels—then what we need to do probably isn’t look for ways to spend money differently, but accept that doing so will actually require us to do and spend less.

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  • Hugh Akston||

    Suderman are you shilling for Joel Schumacher?

  • ||

    You must realize dem's fighting words.

  • ||

    St. Elmo's Fire is Suder-Man's favorite movie after Lost Boys.

  • SugarFree||

    To be fair, Suderman loves any movie with a sax player.

  • ||

    Let's not forget that Lost Boys had both Coreys, too. EPIC

    Listen, NutraSweet, just so you know, if you try to stop us, or vamp out in any way, I'll stake you without even thinking twice about it.

  • Tman||

    Sure NS, he'll "stake" you.

    Uh huh.

    no homo?

  • ||

    Well, I am the gayest monster since gay came to Gaytown.

  • Tman||

    Hey, don't look at me. I don't have the same problem that Jesus has with it. I don't hate you people. We're cool, as long as you don't try to convert me. And I'm lockin' my bedroom door from now on, I can tell you that.

  • ||

    "You don't have to be gay to like Dirtfoot, you just have to be gay to be Dirtfoot. Or to be Dirtfoot you have to be gay."

  • Tman||

    It's okay, Shake, 'cause whoever you decide that you are, I still gonna love you. But just not in a gay way, 'cause God makes all people in different sizes and shapes and problems, but he only makes the people he hate gay. That's you. You it, boy. You gay!

  • SugarFree||

    His penis has splinters.

  • cavalier973||

    I think that we should push for all levels of government to increase their funding of health care by 75% or more annually. The sooner that the current regime collapses under its own weight, the healthier we'll be.

  • Ice Nine||

    That’s because a large amount of medical care is probably unnecessary.

    Word. I spent 30 years practicing Emergency Medicine. About 1/3 of that time was spent telling people with colds (as does every "cold" article in the lay press and every "cold"commercial on TV) that there is nothing that can be done to cure the cold and to take aspirin and OTC antihistamine/decongestants for the symptoms, to drink lots fluids, and get lots of rest. That's one doctor - imagine what that cost in the aggregate.

  • Romulus Augustus||

    One would think that even the $20 copay associated with most health care insurance plans would severely restrict the number of patients coming to you with such complaints. I'm guessing these people you speak of were mostly women, because most men won't visit a doctor until they are coughing, pissing or shitting blood.

  • Ice Nine||

    It doesn't. Hell, we used to get Kaiser patients all the time who were told right up front that Kaiser would not pay their ER bill because there was a Kaiser ER twenty minutes down the road. They invariably would sign in anyway. Of course many of them subsequently bitched about the bill they received but most ended up paying it anyway.

    Also, the thing about men is not true.

  • ||

    Also, the thing about men is not true.

    Word.

    AND ANTIBIOTICS DO NOT WORK ON A VIRUS, PEOPLE!

  • SIV||

    No but they sure come in handy when a Doc misdiagnoses a bacterial infection as a virus.

  • Ted S.||

    Maksim doesn't make mistakes.

  • ||

    Rarely. It has happened, but very rarely. This is also why we have nurses, as their primary functions are:

    1) Implement the dr.'s orders and make relevant NDX's as needed.

    2) Administer meds and catch RX'ing errors. They are, for all intents and purposes, a doc's "FAIL-safe", as it is, "Who gave it, not who RX'd it."

    3) Patient advocacy. (Nurses don't generally bill for service, which is why they are liked more by the public.)

    (There's a reason why med students and residents, nursing students, and other trainees have so much adult supervision.)

  • SIV||

    AND ANTIBIOTICS DO NOT WORK ON A VIRUS, PEOPLE!

    Said by every quack sawbones who ever prescribed acyclovir for impetigo.

  • ||

    I'll put my skills against yours any day of the week, SIV. If they don't do a CX/sensitivity, then don't use them and find another practitioner.

    Or do it yourself.

  • Solanum||

    Hey Groovus, what's your opinion on Functional Medicine? It's mostly pseudoscientific quackery, right?

  • ||

    Hey Groovus, what's your opinion on Functional Medicine? It's mostly pseudoscientific quackery, right?

    Quothe the Iron Law:

    You are not free unless you are free to be wrong.

    IMMO, but do what you wish, FM is barely above homeopathy and placebos.

  • Solanum||

    I suspected as much. Recently an ENT referred me to a Functional Medicine MD. The practice's website is chock-full of words and phrases that made me cringe. "Toxins", "Imbalances", etc. I won't be going.

  • Ice Nine||

    These people are absolutely obsessed with "toxins". I had a friend who was a complete medical flake (loved electrical shit with "magic wands" and the whole bit). He had a swollen knee once. I looked at it. A simple history revealed that he had twisted it. Exam, a straightforward effusion (water on the knee - or in this case a bit of blood). I explained it all to him and told him the usual: elevation, ice packs, etc and, we'll watch it and if it gets really swollen and tight we would have to tap it (with a needle to take out some of the blood). His reply: "Yeah, to get all the toxins out."

  • ||

    His reply: "Yeah, to get all the toxins out."

    **Pounds head on desk**

  • Ice Nine||

    what's your opinion on Functional Medicine? It's mostly pseudoscientific quackery, right?

    Yes, right. It "works" on an amazing number of people, however. This is a combination of placebo effect and the fact that many of them aren't "really" sick in the first place. I am an MD so you must take my opinion of it with due consideration. That said, I am nothing but skeptical and derisive of this stuff yet, as long as it doesn't keep genuinely sick people from getting genuinely effective medical treatment, I'm fine with it (trouble is, it often does). Whatever it takes to get someone feeling better is good by me.

    The answer to the question in your first sentence is, incidentally, "What's your opinion of science and the scientific method?"

  • Solanum||

    Thanks for the info, Ice.

  • LTC(ret) John||

    MED FIGHT!!!!

    HEY, EVERYONE... COME WATCH THIS!

  • Rasilio||

    You know I have yet to deal with a Dr who wasn't a specialist treating me for a very specific issue (like an orthopedist for example) who I thought was worth 5 minutes of my time.

    So while I will agree that newage (rhymes with sewage) medicine is a complete waste of time, I'm really not so sure that modern medicine practitioners are very far above that.

  • SIV||

    They can be, but often aren't.

  • ||

    I suspect that a large number of people don't completely understand their policies, including the copays. They might have bitched because they didn't realize they'd get a bill.

  • Adam330||

    If the ER "told right up front that Kaiser would not pay their ER bill because there was a Kaiser ER twenty minutes down the road," how could they not realize they'd get a bill? That's more than not just understanding the policy, it's terminal level stupid.

  • Ice Nine||

    The excuse that is given by the bleeding hearts is that they are "in crisis" because of the little dingy on their finger and can't be expected to be thinking clearly. Crisis, schmisis.

  • ||

    Damn, I have missed you Icy. Will you ever be in L'viv again?

  • Ice Nine||

    Thanks, bro. Been out of circulation - just got back from six weeks of knockin' around Laos, Cambodia and Burma. Sloooow internet. L'viv? God I hope so; love that town!

  • ||

    Well, please don't be a stranger. Kiev is nuts. Odessa is awesome (you'd love it). Donets'k Oblast' is home sweet home. I have yet to go to L'viv, but it's heavy Russified so it should be OK.

  • Ice Nine||

    We're going to be in the neighborhood in the next year or so (Trans-siberian plus; I'm learning Russian now for the trip). I'll be sure to give you a heads up and try to drop by for a brewsky.

  • ||

    It might not seem so straightforward to someone who doesn't think they'll be getting a bill because they have insurance, or because they don't know that ERs charge for services.

    Being "told right up front that Kaiser would not pay their ER bill" isn't exactly the same things as being told "You will pay us $X out of your own pocket for this."

    Are some of them "terminal level stupid"? Sure. But I'll give them the benefit of the doubt since they're interacting with a system that's been fucked to hell by coercion.

  • Loki||

    I suspect that a large number of people don't completely understand their policies, including the copays are too fucking retarded to understand basic English.

    FTFY

  • ||

    I went to the ER a few years ago after a run because I thought I might be have a heart attack. The only other time I went was 30 years ago when I got my fingers stuck in a fan belt back in the US.

    Anyway, the last time I went they were being pretty obnoxious to most everyone, so I was girding my loins, but they were very nice to me. After a couple hours of seeing people come and go I realized that 95% of the people they deal with are either complete losers, drunks, or drug addicts or else very old and often incoherent. They seemed almost happy to see the occasional "actual" patient.

  • Ice Nine||

    Your percentage is way too high but those types are indeed very disproportionately represented. And it doesn't take many of them (excluding the old farts) to quickly change your outlook on humanity. You have to fight that or it will really screw you up.

  • ||

    Well, it might be higher here with socialized medicine and the fact that there's no financial downside to an ER trip. Regardless, I could see the burnout factor during my short hiatus there.

  • Adam330||

    I would imagine that plenty of doctors just give them some prescription to make them go away.

  • ||

    See: ANTIBIOTICS.

  • Ice Nine||

    That is certainly done. Hispanics in particular feel they have not been treated - and likely won't get well - if they leave without a pill or a prescription. It's sort of like kids and those cheap plastic toys at MacDonald's; it is actually what it's all about.

  • pmains||

    I wonder if this explains the high popularity of homeopathy in Mexico. Every time you leave, they give you a dozen vials of water that has the "memory" of harmful substances.

    Also, maybe it was just my impression, but it seemed from browsing book stores and watching late night TV there that every snake oil medical product you can imagine was even more popular there than here.

  • ||

    This is precisely why RX advertisements are banned in Euro-landia.

  • Ice Nine||

    I think it has more to do in Mexico with the fact that water is more affordable than say, Tamiflu or Cipro.

  • MattJ||

    Cornballer?

  • Stormy Dragon||

    Most of them know that and would prefer to be at home getting said rest, but their employer made them come see you because they want proof the person with a cold actually has a cold when they stayed home sick.

  • SugarFree||

    I see both an endocrinologist and a internal medicine doctor. My new endo is actually an internal med doctor that specializes in endo and works in both departments.

    I asked if I could just see her instead of going twice for very close to the same exams, and they looked at me like I had just started swearing at them in Klingon.

  • SIV||

    MONKEY GLANDS!

  • SugarFree||

    The Monkey Gland

    1 part gin
    1 part orange juice
    dash absinthe
    dash grenadine

    Shake well with ice cubes, strain into a chilled cocktail glass.

  • Ted S.||

    They know Klingon swear words?! ;-)

  • SugarFree||

    Confused, Ted. Confused.

  • LTC(ret) John||

    Are you sure you were not actually doing so, hmmm?

  • Dr. Frankenstein||

    No, he distinctly said Ka Plah.

  • Tman||

    This is like the whole argument with EMR's (Electronic Medical Records).

    The implementation of electronic records was touted as being a giant cost saver and would help streamline the entire billing process thus making things more efficient.

    Instead its added innumerable costs that hospitals are having trouble covering, it hasn't made anything that much easier in terms of billing, and it has also allowed insurance companies and others to manipulate the system in such ways that the already enormous problem of fraudulent medical billing had exploded exponentially.

    (Insert RC's law here.)

  • Raven Nation||

    The other thing about EMRs is, that when they were first proposed by private insurers, about 75% of Americans and most politicians went nuts about how this would endanger our privacy and would lead to denial of health care because insurers would know more about us & so refuse to cover certain treatments.

    However, government-run EMRs are wonderful utopian tools which will save us money.

  • Adam330||

    "it has also allowed insurance companies and others to manipulate the system in such ways that the already enormous problem of fraudulent medical billing had exploded exponentially."

    How does that work? Why would an insurance company manipulate records to increase fraudulent billing? Isn't that kind of against their own interest?

  • R C Dean||

    What's happening with EMRs and billing is that the EMR systems allow hospitals (especially) and doctors to catch "underbilling", where they can actually bill for more than they thought.

    Much of the billions in alleged "fraud" problem is actually billing getting more accurate.

  • Tman||

    Insurance companies can fabricate or alter records to the financial advantage of the insurance company, just as the hospital can do the same in reverse.

  • Adam330||

    Can an insurance company change an EMR?

  • R C Dean||

    No, but any change to an EMR after its signed off on leaves an audit trail a mile wide, if the system even allows the record to be changed at all.

  • ||

    You need to make a distinction between overspending due to lack of information and overspending due to alienation of cost.

    There may be a lot of ineffective treatment, but removing government doesn't change the fact that people (including medical professionals) don't know everything. Patients and doctors will still want to use those half of the 3000 treatments that aren't conclusively effective. In that regard, government doesn't affect spending.

    Government affects spending by alienating patients from the cost of their care. If people have to pay out of their own pockets then they will forgo care that they otherwise would have chosen, whether or not it's effective. Spending will go down. But outcomes may get worse too, because will forgo effective care if they're spending their own money.

  • ||

    Time-intensive clinical studies and effectiveness research can provide us some information, but in many cases these only tell us what happens on average. That’s useful to know, but it’s not enough, because many individual cases might differ.

    The fact that individual cases differ is the reason that "averages" are the most useful measure of effectiveness. Individual patients interacting with individual providers will never generate meaningful information about the effectiveness of treatments.

    Government should not be running or mandating any form of research (medical or otherwise), but large-scale studies organized (voluntarily) by someone are the only way to improve treatments.

  • Finrod||

    Don't forget all the medical tests that the doctor knows won't show anything but are done anyways in order to forestall potential malpractice suits.

  • Willie Screwer||

    "Want to Save Money on Health Care? Do Less of It. A Lot Less."

    This is my philosophy. Have been to the doctor once in ten years. Needed four stitches in my hand back in '06. I have no idea when this country turned into a bunch of folks who go see a doctor at the drop of a hat.

  • R C Dean||

    Here's the deal with "preventable" "chronic" diseases: the prevention generally involves the patient making a pretty major lifestyle-type change. Exhibit A: obesity, which causes a whole slew of chronic diseases.

    Good luck with that.

  • sarcasmic||

    At some point it will be a crime to not follow the doctor's orders. Then all preventable illness will be cured by voluntarily following the doctor's orders, or by being put into a camp where you have no choice.

  • Adam330||

    I can see it now: obesity courts modeled after drug courts, where people are channeled into rehabilitation programs. Anyone want to wager we'll have these within 10 years time?

  • Bryan C||

    I expect they'll put obese people on a registry and forbid them from living within a certain radius of any eating establishment. Once this incentive is in place, the persons of obesity will voluntarily migrate to healthier environments, like highway overpasses and abandoned toxic waste disposal facilities.

  • ||

    Exhibit A: obesity, which causes a whole slew of chronic diseases.

    And not an infectious disease, RC. However,

    Exhibit B: Consensual Sexual Behaviour, which is an effective means of transmission STD's and other blood/fluid borne critters and cooties.

    Good luck with that.

    Indeed. Apparently, condoms and silly notions like "fidelity" are old hat and Tooth Fairy levels of utter nonsense.

    Just bring in HillaryCare and be done with it.

  • Thane of Whiterun||

    Indeed. Apparently, condoms and silly notions like "fidelity" are old hat and Tooth Fairy levels of utter nonsense.

    Seriously. I watch Tamara Taylor (Bones) doing her "I am greater than AIDS"** commercial and I wish she'd instead just come out and say "Wear. A. Fucking. Condom."

    **way to set a high bar for yourself

  • The Late P Brooks||

    No doctor ever got a new Jaguar by saying, "There is nothing wrong with you. Get out of my office."

  • LTC(ret) John||

    Hmmmm...now I am starting to see why we never had a Jag while I was growing up.

    My Dad, short circuiting costly tests, some years ago - several MDs gathered around a piece of material removed from someone, all trying to determine what it was composed of... they suggested various chemical tests, spectrography, etc. My Dad walks over with a magnet, holds it near and the thing clanks onto it. "Its probably iron" he says and walks away.

  • ||

    I don't own a Jag, Brooksie. Never have.

  • Paul.||

    Ok, Prius then.

  • ||

    There's significant merit to your argument. The key, however, is that we no cut back as blindly as we spent, in the first place. We need to focus on those "wellness" efforts that have proven to be highly effective at minimal cost per capita.

    Consider, for example, the anti-smoking campaign. Much of it was waged and paid for by private charities. And every dime the government spent has brought hundreds if not thousands of dollars in reduced costs of treating smoking-related illnesses - from coronary disease to lung cancer.

    One of the questions we need to ask -- though it may make us uncomfortable -- is whether certain diseases are virtually an "inevitable" consequence of living. Prostrate cancer is a perfect example here. More than 80% of men who live to age 80 will develop it. It's also one of the slowest growing cancers known to man. Testing men every year for it is a ludicrous expenditure... especially since many of the treatments are greater health threats than the disease, itself.

    Few health investments have a higher rate of return than those that target young children (particularly in impoverished communities) to assure healthy diets and lifestyles. The dime we spend there can save countless dollars in preventing scores of disease treatment later on... not only with respect to the original targets of our efforts, but for many generations to come.

  • R C Dean||

    Much of it was waged and paid for by private charities.

    Funny, I seem to recall lots of laws against smoking, extraordinarily high taxes on cigarettes, and a multi-billion dollar government lawsuit.

    And every dime the government spent has brought hundreds if not thousands of dollars in reduced costs of treating smoking-related illnesses - from coronary disease to lung cancer.

    Bilge. The lifetime healthcare costs of smokers are less than nonsmokers. Everybody dies. Most of your lifetime healthcare costs are incurred during your terminal phase. The terminal phase for smokers tends to be quicker and cheaper.

  • Paul.||

    The key, however, is that we no cut back as blindly as we spent, in the first place.

    That's the problem, we never, ever cut back as blindly as we spend.

    Spending other people's money is easy. Stopping the expenditure of other people's money is... politically tricky.

    We need to focus on those "wellness" efforts that have proven to be highly effective at minimal cost per capita.

    A lot of those "wellness" efforts (nice use of scare quotes, btw) are the things that are questionable but cost a lot of money.

    And every dime the government spent has brought hundreds if not thousands of dollars in reduced costs of treating smoking-related illnesses - from coronary disease to lung cancer.

    Citation please.

    Few health investments have a higher rate of return than those that target young children (particularly in impoverished communities) to assure healthy diets and lifestyles. The dime we spend there can save countless dollars in preventing scores of disease treatment later on... not only with respect to the original targets of our efforts, but for many generations to come.

    Maybe. Rolls off the tongue nicely. Putting it into practice? Gonna have to spend a lot of money and probably expand the role of government in everbody's business.

  • ||

    Prostrate cancer? Is this a new term for government worship?

  • Paul.||

    Isn't that why the primary goal of any socialized medicine is to restrict treatment and limit care?

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