An Ounce of Prevention Often Costs a Ton of Money


Washington Post columnist Charles Krauthammer has a smart column today about the myth that preventive care will lower overall health care costs. This is a constant trope of health-care-reformer-in-chief President Barack Obama. As Krauthammer details:

Sprinkle fairy dust on every health-care plan, and present your deus ex machina: prevention.

Free mammograms and diabetes tests and checkups for all, promise Democratic leaders Nancy Pelosi and Steny Hoyer, writing in USA Today. Prevention, they assure us, will not just make us healthier, it also "will save money."

Obama followed suit in his Tuesday New Hampshire town hall, touting prevention as amazingly dual-purpose: "It saves lives. It also saves money."

This all sounds great—who hasn't heard Benjamin Franklin's aphorism: "An ounce of prevention is worth a pound of cure." While that may be true for individuals, all that preventing (mammograms, MRIs, statin drugs) can really add up. As Krauthammer explains:

Overall, preventive care increases medical costs.

This inconvenient truth comes, once again, from the CBO. In an Aug. 7 letter to Rep. Nathan Deal, CBO Director Doug Elmendorf writes: "Researchers who have examined the effects of preventive care generally find that the added costs of widespread use of preventive services tend to exceed the savings from averted illness."

Krauthammer then provides an example of how this works:

What's the real-life actuality? In Obamaworld, as explained by the president in his Tuesday town hall, if we pour money into primary care for diabetics instead of giving surgeons "$30,000, $40,000, $50,000" for a later amputation—a whopper that misrepresents the surgeon's fee by a factor of at least 30—"that will save us money." Back on Earth, a rigorous study in the journal Circulation found that for cardiovascular diseases and diabetes, "if all the recommended prevention activities were applied with 100 percent success," the prevention would cost almost 10 times as much as the savings, increasing the country's total medical bill by 162 percent. That's because prevention applied to large populations is very expensive, as shown by another report Elmendorf cites, a definitive review in the New England Journal of Medicine of hundreds of studies that found that more than 80 percent of preventive measures added to medical costs. 

But as Krauthammer notes, most of us want medicine to keep us healthy or restore us back to health when we're sick. That's why we spend money on treatments and preventives like vaccines. Prevention prevents illnesses not higher costs.

Finally, the only reliable technique humanity has ever discovered for lowering the costs of products or services over time is market competition. That will be true for health care too.

It seems the president isn't above spreading a bit of health care reform "misinformation" himself.

Whole Krauthammer column is here. See also some of my colleagues' insightful thinking on this issue here and here