Tuesday, September 1, 2009

Does Preventitive Care Reduce Health Costs?

A new study finds that

Preventive services for the chronically ill may reduce health-care costs, but they are unlikely to generate the kind of fantastic savings that President Obama and other Democrats have said could help pay for an overhaul of the nation's health system, according to a study being published Tuesday.

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.

This should not be suprising; if preventive measures could achieve substantial savings in health costs, insurance companies would already be pushing them.

22 comments:

Mike Huben said...

What planet are you living on, Miron?

Blue Cross is CONTINUALLY calling me about preventive treatment and education for my diabetes and hypertension. Perhaps you should try to educate them, if you think i doesn't save them money.

By the way, the study was only about one disease, diabetes. There are plenty of other forms of preventive care for plenty of other diseases. Vaccinations for the commonest diseases create vast savings in health care costs, on the order of 50 times the cost.

Nor does the study measure externalities, such as better health and the ability to earn longer.

Here's a word of advice: don't start your articles with "This should not be suprising [sic] [...]": that screams Confirmation Bias.

Gordon Hutton said...

Preventive measures, when widely applied, will not reduce the overall costs of healthcare. But it will almost certainly make people healthier. And that is the reason that we should push for those things. Just because it doesn't save a buck in the long run, doesn't mean it isn't worth doing.

Blue Cross wants a healthy population of premium payers, I would imagine. Whether or not they save money isn't the issue. Whether or not a paying customer works and lives longer, is of much more importance, I would think.

This study, even for only one disease, should help quash the silly argument that prevention will save billions and billions.

It doesn't. But it should still be a critical part of health reform.

Steve M. said...

I often wonder...

If enslavement caused us to live to 200 would that be a valid part of health care reform?

Gordon Hutton said...

If I say part of health reform, I don't mean to imply that government should mandate anything. I think it makes economic sense for an insurance company to push for prevention, not because it changes their cost structure, but because it keeps their customer base alive.

But I have to wonder...are you saying that enslavement is analogous to prevention?

Steve M. said...

no, just that slavery and dramatically prolonged life would be the ultimate trade off if that were the case...

the question is, to what degree do we restrict freedom to improve health?

Insurance companies do promote some prevention at this point, but the regulatory web distorts incentives to such a degree that it is hard to say what is in their best interest..


And, Gordon... you may be right... and if you are the market would discover the benefits of prevention, if it is allowed to work..

Maxim said...

Actually, because of our employer-based system, insurers wouldn't have the proper incentives to provide preventative care. After all, they might spend a lot on preventative care, only to see you switch jobs and another insurer reap the benefits in your old age.

Of course, getting rid of the tax subsidy for employers would solve that issue. The government is to blame, as usual.

Anonymous said...

"This should not be suprising; if preventive measures could achieve substantial savings in health costs, insurance companies would already be pushing them."

I'm confused about this. I mean, Mike Huban makes a point about Blue Cross, that perplexes me somewhat, because I'm sure that particular kinds of early intervention can be shown to cut long term costs. But the argument with universal health care is not that we are going to implement particular kinds of intervention proven to cut costs, and *only* those kinds of intervention, but that people will just decide on their own the go to the doctor, and that will result in preventative care. Of course, when the CBO and New England Journal of Medicine made their argument that preventative care would be more expensive, the White House responded that *targeted* prevention would be necessary. So, really? Is that how it's going to work, we'll be able to control who gets and doesn't get this preventative care?

To recap, my understanding of the reason preventative care is not a silver bullet for saving money in the larger health care industry is because in order to get the benefits of preventative care, *everyone* will have to get care early on, and that will be more expensive than what we have know. In other words, even though it is more expensive in the case of an individual person to forego preventative care, what we have know is a lot of people who don't get care for years and years, and all that skipped care is cheaper for us over the long run, even when you factor in the more expensive care they need when they finally get really sick.

When you look at one insurance company, thinking aloud... they already have consumers with insurance, and perhaps they have done studies and they know that herding people into this or that kind of care is more efficient than simply encouraging consumers to go to the doc whenever they feel like it, I'm not sure. But even if it turns out that it is to the advantage of insurance companies to push for certain kinds of preventative care, it does not follow that providing coverage for everyone will result in savings gained from preventative care...

Jay J

Anonymous said...

Please forgive my inability to distinguish "know" from "now," in the above post; it was very late at night...

Jay J

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