The ACP Advocate Blog
by Bob Doherty
Tuesday, September 8, 2009
Does prevention save money?
As President Obama and congressional Democrats work to re-tool their health reform effort to stop the erosion of support among voters and lawmakers, bringing down the cost is a priority. The most likely way is to reduce the subsidies to help people buy coverage or the numbers of people who would be eligible for such assistance. This, though, would move the goal posts away for the promise of "affordable coverage for all" and undermine support among liberal members of Congress and progressive voters.
Originally, Obama and his allies hoped to achieve substantial "scoreable" savings - that is, savings that the all-important Congressional Budget Office would agree reduces federal spending - through delivery system reforms designed to emphasize prevention and care coordination, supported by a robust health information technology infrastructure. The CBO, though, saw things differently - concluding for the most part that higher spending on such things would result in, well, higher spending. The promise that such spending would reduce the costs associated with at-risk persons developing more serious and complicated illnesses just doesn't make it onto the CBO ledger sheets.
Just a few weeks ago, the CBO told Congress that spending more on prevention and wellness likely won't save money. The CBO director's blog had this to say:
"Although different types of preventive care have different effects on spending, the evidence suggests that for most preventive services, expanded utilization leads to higher, not lower, medical spending overall.
That result may seem counterintuitive. For example, many observers point to cases in which a simple medical test, if given early enough, can reveal a condition that is treatable at a fraction of the cost of treating that same illness after it has progressed. But when analyzing the effects of preventive care on total spending for health care, it is important to recognize that doctors do not know beforehand which patients are going to develop costly illnesses. To avert one case of acute illness, it is usually necessary to provide preventive care to many patients, most of whom would not have suffered that illness anyway. Judging the overall effect on medical spending requires analysts to calculate not just the savings from the relatively few individuals who would avoid more expensive treatment later, but also the costs of the many who would make greater use of preventive care."
One of the reasons that CBO has trouble attributing savings to prevention is that budget rules adopted by Congress require that CBO consider the impact only for the next ten years. Anything outside of the ten year window doesn't count.
Fortunately, Health Affairs has published new research that may actually persuade CBO to look differently at the value of prevention - particularly as it relates to the value of interventions to reduce the prevalence and complications associated with diabetes and other chronic illnesses. (The research was funded by the National Changing Diabetes Program, hosted and supported by Novo Nordisk. ACP is a member of the NCDP). The authors took an epidemiological approach to estimating the value of best practices to prevent and control complications from diabetes, and found that most of the cost was recouped in a 10 to 25 year timeframe.
"For example, in the ten-year window, the cost offset for enrollees ages 41-50 was $2.1 billion: $3.6 billion in gross spending minus $1.5 billion in net spending. This means that 58 percent of program costs were offset by reduced spending on diabetes and its complications. In the twenty-five-year window, the cost offset for the same age group was $17 billion, which represented an offset of 89 percent of program costs."
In other words, over 25 years, aggressive interventions to control diabetes almost pay for themselves.
Dr. James Marks, a senior vice president at the Robert Woods Johnson foundation, blogs that the new research shows "how we can combine epidemiological science with economic analysis to better see the true costs and where we get the best value over the longer term. We need to do this more, not just in health and medical care, but for investments in our children as well."
The new research doesn't solve the dilemma of how to find enough money to pay for health reform. But it creates a promising opening to get the CBO and Congress to look at expenditures on health care interventions that have been proven to improve clinical outcomes in a different light, potentially allowing them to be fully funded without breaking the piggy-bank.
Today's question: Do you think Congress should tell the CBO to change its budget rule to look at the impact of best practices to prevent and control complications from chronic illnesses over a longer period of time?
About the Author
Bob Doherty is Senior Vice President, American College of Physicians Government Affairs and Public Policy; Author of the ACP Advocate Blog
Email Bob Doherty: TheACPAdvocateblog@acponline.org.Follow @BobDohertyACP
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