Prevention Brings Less-than-Expected Savings
Congressional Democrats and Obama administration officials are touting preventive care as a major source of savings that will help offset the high cost of their health care overhaul proposals.
But preventive care not only fails to save a significant amount of money, but actually costs more.
“On average, preventive care does not save money,” said Paul Van de Water, a senior fellow at the Center on Budget and Policy Priorities in Washington, DC. “There might be savings to be had elsewhere, but the government will not save money here.”
Beneficial but Not Inexpensive
“A lot of preventive care may indeed be beneficial to the individual, and it is certainly an area that a lot of people would like to focus on, but expanding preventive care is not going to save money for the federal government,” said Van de Water.
“Preventive care is a good thing; it helps individuals avoid illness. But it will not generate savings, especially in the short-term,” said Len Burman, director of the Washington, DC-based Tax Policy Center, a joint venture of the Brookings Institution and the Urban Institute.
Burman says the focus on preventive care among proponents of government-centric health care overhaul reveals a confused mindset.
“Advocates of [government-run health care] think they can cut health care spending by expanding health care spending,” Burman said.
A major problem with the emphasis on preventive care, says Van de Water, is that it “can lead to additional testing being recommended when it may not be needed.
“For example, spotting colon cancer in its infancy requires screenings, and focusing on preventing that condition requires conducting those screenings on the thousands of people who are at risk,” Van de Water added. “However, far from everyone screened will develop colon cancer. Everybody would much rather this cancer be prevented, but it is a simple economic fact that the cost of preventive care for colon cancer is far higher than treating the few who actually develop the condition.”
Readmission Prevention a Positive
Burman says a focus on preventive care “could save significant dollars” in one area: reducing “how much Medicare spends on hospital readmissions.” Van de Water agrees. He said reducing “hospital readmission rates is a good example of preventive care saving money.”
However, Van de Water added, “In many ways reducing hospital readmissions is quite a different item than preventive care. Usually, when people talk about preventive care, they are talking about cancer screening, colon cancer screening, items that do not necessarily save money. However, reducing hospital readmission rates is certainly an area where there is some room for improvement. Medicare has already implemented changes that are designed to push hospitals in that direction.
“[That] might be the one exception to the rule that preventive care does not save money,” Van de Water continued. “However, it is very important to remember that is the exception—not the rule.”
Thomas Cheplick (email@example.com) writes from Massachusetts.