Health Care Question: Does Preventive Care Mean Big, Big Savings?


One of the mantras of health care reform advocates is that if we pay a little more now for preventive care, we'll have big, big savings on the back end—variously defined as anywhere from next Tuesday to 25 years from next Tuesday. Here's the Wash Post on a new study that says fuggedaboutit:

Using data from long-standing clinical trials, researchers projected the cost of caring for people with Type 2 diabetes as they progress from diagnosis to various complications and death. Enrolling federally-insured patients in a simple but aggressive program to control the disease would cost the government $1,024 per person per year—money that largely would be recovered after 25 years through lower spending on dialysis, kidney transplants, amputations and other forms of treatment, the study found.

However, except for the youngest diabetics, the additional services would add to overall health spending, not decrease it, the study shows….

For diabetes patients, only about two-thirds of that cost would be recovered in the first decade, when fewer complications materialize, and more than three-quarters would be recovered over 25 years, the study found. Only for the youngest patients, those aged 24 to 30, would spending on preventive care wind up producing a net savings: the study calculates that $21 billion spent on younger patients would cut overall spending on their health care by $6 billion over 25 years.

Whole story here.

Without meaning to, I think this story perfectly illustrates what happens when health care becomes a focus of public financing. Among other things, you start doing cost-benefit analyses for entire classes of people (and however well-intentioned and even necessary such studies are, they are at best wild guesses of future costs and technologies). That's creepy enough on the face of it, but it's especially the case when it comes to medical situations whose solutions might end up being dictated by the state. "Society" might look at the numbers and make one decision, but I suspect individuals and families faced with particular situations will make very different calculations. Or, more correctly, more personal decisions.

The study above underscores that cost savings are almost certainly not going to come from any sort of health care reform that pushes the idea that if only we get everyone to the doctor twice a year for checkups, everything will be peachy-keen, or even cheaper. What it reminds us is that one of the ways we are living longer and better lives is precisely because we're spending more on health care. Spending more on health care over the years is, by itself, no more an indication of dysfunction than spending more on prepared food or tattoos. A huge chunk of it simply reflects the fact that there's more stuff worth buying out there, and that we're willing to shell out. 

Health care costs can and should be cut or, same thing, made more efficient, through market competition, technological innovation, and lifestyle shifts that each person needs to run through their own preference-meter. These are not things that should be subject to overall caps on medical costs imposed by someone other than the person living with the body that will eventually fail them.

Update: My colleague Peter Suderman, who knows the ins and outs of this stuff like nobody's business, points out:

There's actually a fairly large body of work saying preventive care doesn't save money.

The CBO says it: http://blogs.abcnews.com/politicalpunch/2009/08/congressional-budget-expert-says-preventive-care-will-raise-not-cut-costs.html So does the New England Journal of Medicine: http://content.nejm.org/cgi/content/full/358/7/661

More interestingly, a new study of consumer-driven health care, in which people have high deductible insurance, an HSA, and pay for a lot of routine care out of their own dollars, found that people in these sorts of plans are, contra conventional wisdom, more likely to seek preventive care than those on standard insurance plans: http://www.marginalrevolution.com/marginalrevolution/2009/08/consumer-drive-health-care-plans.html