The “preventative care saves money” meme is incorrect AFAIK. People massively over-consume expensive tests which check for conditions with extremely low base-rates of occurrence in the population.
example:
“Think of it this way. Assume that a screening test for disease X costs $500 and finding it early averts $10,000 of costly treatment at a later stage. Are you saving money? Well, if one in ten of those who are screened tests positive, society is saving $5,000. But if only one in 100 would get that disease, society is shelling out $40,000 more than it would without the preventive care.
That’s a hypothetical case. What’s the real-life actuality in the United States today? A 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 ten times as much as the savings, increasing the country’s total medical bill by 162 percent. Elmendorf additionally cites a definitive assessment in the New England Journal of Medicine that reviewed hundreds of studies on preventive care and found that more than 80 percent of preventive measures added to medical costs.”
This appears to be the Circulation study that you cite: Kahn et al., 2008, “The Impact of Prevention on Reducing the Burden of Cardiovascular Disease”. The full-text is free.
The authors of the Circulation study estimate that fully implementing all eleven prevention activities which they discuss would increase US medical spending by $7.6 trillion during the next 30 years, increasing medical spending on cardiovascular disease, diabetes, and coronary heart disease from $9.5T (their baseline estimate) to $17.1T (with $0.9T in savings from better prevention more than offset by $8.5T in new preventive spending). *
Note that these numbers are only for the effects of preventive care on medical spending; they do not include the health benefits of the preventive care. The authors also estimate that fully implementing the prevention activities would prevent 63% of all heart attacks and 31% of all strokes, increasing adult life expectancy by over a year. In total, the $7.6 trillion would buy 244 million additional quality-adjusted life-years, for an average cost of $36,380 per QALY.
* I notice that I am confused: the number “162%” appears in the paper in reference to this spending increase, but I can’t figure out what it refers to. Going from $9.5T to $17.1T is an 80% increase.
What’s the real-life actuality in the United States today? A 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 ten times as much as the savings, increasing the country’s total medical bill by 162 percent. Elmendorf additionally cites a definitive assessment in the New England Journal of Medicine that reviewed hundreds of studies on preventive care and found that more than 80 percent of preventive measures added to medical costs.”
A number of people, myself included, find it suspicious that after years of advocating preventative medicine, a bunch of studies against it are coming out just after Obamacare was passed.
Prediction: If Obamacare gets repealed these studies will be refuted by subsequent studies, whereas if it stays on the books, these studies will become the baseline of a new consensus.
Studies against the effectiveness of preventative medicine aren’t new, they have been published repeatedly for decades, I have read several myself as early as 1993. And of course the RAND study that Robin discussed repeatedly.
Working with your example: If we assume the government health service is behaving in its own self interest, why would it spend money on test that it knew not to be cost effective? Whereas if the incentives are split between a Dr ordering a test and an insurance company paying for one wouldn’t they disproportionately order tests?
More generally, even if its true for particular testing procedures theres lots of low hanging fruit for intervention before things get severe. The most obvious examples would be schemes to get people to stop smoking or lose weight, that the government provides freely because they are less expensive than the projected cost of the illnesses that would arise without such intervention. Also the ability to see a general practitioner more regularly than if you paid per visit means symptoms can be picked up earlier (e.g. if someone has a mild symptom but has to pay to get it checked they are disincentivised to get it checked until it becomes severe.)
If we assume the government health service is behaving in its own self interest,
Given they way other government services tend to behave this is highly dubious.
The most obvious examples would be schemes to get people to stop smoking or lose weight, that the government provides freely because they are less expensive than the projected cost of the illnesses that would arise without such intervention.
The problem is that the way these kinds of schemes tend to work in practice has a lot more to do with whatever the currently fashionable moral panic is than any rational analysis.
Of course finding cancer early while it can still be operated on is VASTLY more expensive than letting people die untreated. Not only do you pay for the tests on the people that don’t have it, you pay for the tests on the people that do have it, and you pay for the treatment once it is discovered.
Perhaps there is some other benefit to preventive care that makes it worth more money? How does the health of someone who has avoided a heart transplant through early detection and treatment of heart disease compare to that of someone with a heart transplant, for example? How does the lifespan compare?
WIthout putting a price on the BENEFITS of the different mix of outcomes, it is impossible to know whether the COSTS of the preventive approaches are worth it or not.
No, preventative medicine does not save money, and there were people who believed that. But it may save some lives and improve many more lives. That has to be studied (and if already studied, discussed) before preventative care is tossed as a waste of money.
No one is advocating tossing preventative care. The problem is that preventative care is treated as a monolithic entity rather than a collection of things, a small subset of which is responsible for most of the benefits.
The problem is that preventative care is treated as a monolithic entity rather than a collection of things, a small subset of which is responsible for most of the benefits
I agree with the first half, but how sure are you that it’s a small subset which is responsible for most of the benefits?
The “preventative care saves money” meme is incorrect AFAIK. People massively over-consume expensive tests which check for conditions with extremely low base-rates of occurrence in the population.
example: “Think of it this way. Assume that a screening test for disease X costs $500 and finding it early averts $10,000 of costly treatment at a later stage. Are you saving money? Well, if one in ten of those who are screened tests positive, society is saving $5,000. But if only one in 100 would get that disease, society is shelling out $40,000 more than it would without the preventive care.
That’s a hypothetical case. What’s the real-life actuality in the United States today? A 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 ten times as much as the savings, increasing the country’s total medical bill by 162 percent. Elmendorf additionally cites a definitive assessment in the New England Journal of Medicine that reviewed hundreds of studies on preventive care and found that more than 80 percent of preventive measures added to medical costs.”
This appears to be the Circulation study that you cite: Kahn et al., 2008, “The Impact of Prevention on Reducing the Burden of Cardiovascular Disease”. The full-text is free.
The authors of the Circulation study estimate that fully implementing all eleven prevention activities which they discuss would increase US medical spending by $7.6 trillion during the next 30 years, increasing medical spending on cardiovascular disease, diabetes, and coronary heart disease from $9.5T (their baseline estimate) to $17.1T (with $0.9T in savings from better prevention more than offset by $8.5T in new preventive spending). *
Note that these numbers are only for the effects of preventive care on medical spending; they do not include the health benefits of the preventive care. The authors also estimate that fully implementing the prevention activities would prevent 63% of all heart attacks and 31% of all strokes, increasing adult life expectancy by over a year. In total, the $7.6 trillion would buy 244 million additional quality-adjusted life-years, for an average cost of $36,380 per QALY.
* I notice that I am confused: the number “162%” appears in the paper in reference to this spending increase, but I can’t figure out what it refers to. Going from $9.5T to $17.1T is an 80% increase.
A number of people, myself included, find it suspicious that after years of advocating preventative medicine, a bunch of studies against it are coming out just after Obamacare was passed.
Prediction: If Obamacare gets repealed these studies will be refuted by subsequent studies, whereas if it stays on the books, these studies will become the baseline of a new consensus.
Studies against the effectiveness of preventative medicine aren’t new, they have been published repeatedly for decades, I have read several myself as early as 1993. And of course the RAND study that Robin discussed repeatedly.
Working with your example: If we assume the government health service is behaving in its own self interest, why would it spend money on test that it knew not to be cost effective? Whereas if the incentives are split between a Dr ordering a test and an insurance company paying for one wouldn’t they disproportionately order tests?
More generally, even if its true for particular testing procedures theres lots of low hanging fruit for intervention before things get severe. The most obvious examples would be schemes to get people to stop smoking or lose weight, that the government provides freely because they are less expensive than the projected cost of the illnesses that would arise without such intervention. Also the ability to see a general practitioner more regularly than if you paid per visit means symptoms can be picked up earlier (e.g. if someone has a mild symptom but has to pay to get it checked they are disincentivised to get it checked until it becomes severe.)
Again, AFAIK smokers and the obese are cheaper in the long run because they die faster.
Given they way other government services tend to behave this is highly dubious.
The problem is that the way these kinds of schemes tend to work in practice has a lot more to do with whatever the currently fashionable moral panic is than any rational analysis.
Of course finding cancer early while it can still be operated on is VASTLY more expensive than letting people die untreated. Not only do you pay for the tests on the people that don’t have it, you pay for the tests on the people that do have it, and you pay for the treatment once it is discovered.
Perhaps there is some other benefit to preventive care that makes it worth more money? How does the health of someone who has avoided a heart transplant through early detection and treatment of heart disease compare to that of someone with a heart transplant, for example? How does the lifespan compare?
WIthout putting a price on the BENEFITS of the different mix of outcomes, it is impossible to know whether the COSTS of the preventive approaches are worth it or not.
No, preventative medicine does not save money, and there were people who believed that. But it may save some lives and improve many more lives. That has to be studied (and if already studied, discussed) before preventative care is tossed as a waste of money.
No one is advocating tossing preventative care. The problem is that preventative care is treated as a monolithic entity rather than a collection of things, a small subset of which is responsible for most of the benefits.
I agree with the first half, but how sure are you that it’s a small subset which is responsible for most of the benefits?
~85% confidence that <=10% of preventative care is responsible for >=66% of the savings.
I’m guessing you made up those numbers?
“Where do priors come from?”
I should have asked “Why do you think it’s a small subset?”