Preventing our way out of bankruptcy?

Health care reform has been pushed to the back of the room while all wait to get stimulated, but it's still on the program here. As I have mentioned from time to time, there is no serious cost containment in any of the proposals coming from the Obama administration or congress right now. The president (and it is at least a relief to be able to type that word without pain) has said that more emphasis on prevention can save health care spending, but is that really true?

Steven Woolf in the new JAMA reviews the issue. Unfortunately it's subscription only, but I largely agree with him and I can summarize it more quickly for you anyway.

If we spend money on preventing illness, we might end up saving money on medical treatment down the road, but is that really the only reason to do it? In fact, while it is unquestionably true that if fewer people smoked, more people ate a healthy diet and were physically active, the air was cleaner, etc., we would spend less money treating cancer, heart disease, and diabetes. However, it does not follow that every dollar spent to achieve those ends will save more than a dollar plus interest, since we're looking toward the future, in eventual health care spending. Interventions directed at a large population will be successful with only a percentage of individuals, and so the cost-benefit calculus is uncertain. The fact is there are few interventions that really save money in the end.

When it comes to preventive medical services, per se, there are really very few interventions that ultimately save money, and a lot of them, such as universal childhood immunization, are largely in place. There probably isn't a lot of room left to save money by investing in prevention -- certainly not enough to reverse or substantially slow the growth in health care spending.

However, that is not an argument for not doing more prevention. We don't spend money in order to save money, we spend money in order to get stuff that's worth it. And better health and longer life are worth spending money on. The issue is not just investing more in prevention -- it's allocating health care spending efficiently. As Woolf points out, insurers pay for many services that cost more than $100,000 per quality adjusted life year (QALY -- I've criticized the concept previously but we need some way of comparing benefits of various interventions); but there are services that cost much less that aren't universally utilized. For example, colonoscopic screening for cancer is estimated to cost less than $25,000 per QALY, but most people don't get it. Other preventive services cost even less. However, they still have a net positive cost.

Therefore, if we spend more on screening and prevention, in general we will end up spending more in total, not saving money, although we will prevent suffering and disability and extend lives. If we want to actually save money, we have to spend less on less cost effective services, and reallocate the spending to others that, while they still have a net positive cost, give us more for our money.

This means -- drum roll please -- we must have rationing. The so-called Free Market™ does not allocate health care resources in this way, and generates almost no public health resources at all, because they are public goods. The best way to achieve the rationing we need, from which we will all benefit (and I'm not one who believes that a terminal cancer patient actually benefits from $150,000 worth of chemotherapy that yields three months of sick and suffering life) is to have universal, comprehensive, single payer national health care. Yeah, socialism. There, I said it. When it comes to health care, capitalism is what ails us.