Is an ounce of prevention truly worth a pound of cure?

Filed under: News | Tags:

Economists claim preventive care costs more than it saves

The push to diagnose diseases early and to save money has made prevention a major health care goal.

But some economists question the efficiency of preventive care, saying that it actually costs more money than it saves — a belief that puts them at odds with health care providers.

“Prevention is indeed a wonderful thing for extending people’s lives and allowing them to make more money, buy more stuff, give more money to charity and spend more time with their grandchildren,” said Steve Hyde, a Colorado Springs author who wrote “Cured,” a book that outlines a free-market approach to health care reform and operates a blog, hydeonhealthcare.com. “But it doesn’t save any money on medical care. Forcing people to buy insurance that covers yet more preventive services will drive premiums up, not down.”

Hyde quotes Health Affairs journal as saying, “… hundreds of studies have shown that prevention usually adds to medical costs, instead of reducing them. Medications for hypertension and elevated cholesterol, diet and exercise to prevent diabetes and screening and early treatment for cancer all add more to medical costs than they save.”

But others argue that prevention does more than just save lives.

“I think we are to the point where people know that prevention and wellness save money — but there are always going to be nay-sayers,” said Margaret Sabin, CEO of Penrose-St. Francis Health Centers. “You still have people who will say that smoking isn’t bad for you, people who will say there is no global warming.”

But Sabin said that most studies show prevention saves money during the long-term.

“If you can catch it early and people make lifestyle changes, they are healthier,” she said. “Not only does it save money in health care dollars, it makes employees more productive, because they feel better.”

Sabin points to her own experience as an example. Routine screenings showed she had high cholesterol. She changed her diet, and her cholesterol went down.

“I guess I could only see the viewpoint that prevention doesn’t save money if people don’t make lifestyle changes,” she said. “If they lose weight, if they start exercising, watching their diet.”

Some economists argue that widespread screening — only for people with risk factors — would save money. Again, Sabin said that while risk factors play a part, genetics also is a factor.

“I could sit in a room and look around and judge by age, obesity level and gender who should be tested,” she said. “But that fourth person — the person with no risk factors — could be the one who winds up dead.”

Steve Berkshire, professor of health care administration at Central Michigan University, said that economists aren’t considering costs during a period of years — leading to the false belief that prevention is the problem.

“It depends on how they conduct their analysis,” he said. “I suppose if one did a cost-benefit analysis based on results in a one-year period, they are probably correct, since the benefit of wellness and prevention is a long-term affect and not something that reduces the cost of health insurance in the same year.”

Berkshire said that since many businesses purchase insurance annually or every three years, they wouldn’t see the benefit of prevention.

“The studies that show wellness and prevention are effective in reducing health care expenses are based on longer-term effects of three to five years,” he said. “In those cases, wellness and prevention do reduce the longer-tem costs related to preventable illness.”

Sabin said studies show that return on investment for wellness and prevention is about $3 for every $1 spent.

“But, here at Penrose, we’ve seen some cases where we have a 12-to-1 benefit ratio,” she said. “Blood pressure medicine costs $1,200 a year, if we have a program that lowers blood pressure, we’ve saved $1,200. And we do — that program teaches people how to eat healthier, what to do for exercise. And if they do it, they save that kind of money. And the costs for the program are very low.”

Berkshire said the companies most likely to recognize the benefits of prevention are self-insured, like Penrose.

“My personal perspective, aside from the current year cost of health insurance, is that wellness and prevention programs are well worth the money when we consider quality-of-life calculations and the fact that people who do participate in wellness and prevention programs are likely to live healthier and more productive lives and be a better risk for employers in the long term,” he said. “That should be a good thing for employers.”

In the context of reform, Berkshire said prevention must be included.

“Wellness and prevention will certainly have a positive impact,” he said. “Since we should assume that an individual will be on a plan for a longer term, in which case there will be a long term impact. If the coverage is funded by some sort of government tax or payment, wellness and prevention should definitely have an impact on the long term funding of such programs.”

But some economists say that including prevention in health care reform will not only increase costs, it will create “coverage creep” if the program is limited.

Jason Shafrin said that a program that covers the test, but does not include treatment will be in trouble quickly.

“This will lead to an expansion of coverage to treatments that are less cost-effective,” he said. “Physicians will lobby to have certain treatments included … thus, what may start out as a health plan which only targets cost-effective treatments, will likely expand into other areas.”

Shafrin also said that healthy people — the non-obese, the non-smokers — incur more costs, because they live longer.

“It is true, that each year an obese individual lives they will incur more medical costs than a healthy person — in particular, spending on heart disease, diabetes and musculoskeletal diseases,” he said. “Since a healthy person lives longer, however, the healthy person has more years of medical expenditures which will accumulate compared to an obese individual. Similarly, smokers have higher medical costs per year but since they have a shorter life expectancy, smokers actually incur fewer medical costs over their lifetime than healthy individuals.”

But Sabin counters, saying that the healthier a person is, the more productive they are — the more energy they have and the fewer sick days they use.

“Employers understand this,” she said. “That’s why you have employers like Ent, who have 10 minutes of stretching before their shifts start. They’ve noticed it makes a difference. Wellness and prevention can make a difference to the bottom line.”