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?


james gaulte said...

"Almost pays for itself" does not equal (even if we take this drug company funded project at face value) saving enough money to pay for greatly increasing the number of people who have health insurance.The evidence that prevention will save large sums of money just isn't there.

Jay Larson MD said...

Unfortunately the impact of best practices to prevent and control complications from chronic illnesses over a longer period of time just postpones health care costs to a later date.

Even if diabetes complications are reduced, some other disease process will develop as the person ages.

With that being said, it still is important to maintain a person's quality of life as long as possible. QOL is seriously reduced if a person develops blindness, renal failure requiring dialysis, or having an amputation as complications of diabetes.

Having the CBO 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 may not be any better than looking at the impact over a shorter period of time. Once the lag time for the cost of chronic disease catches up, it may not make any difference in the long haul.

Todd Staub said...

The primary care attribute that delivers the highest cost savings is the coordination of care. Prevention is worthwhile even if budget neutral. Debates over the value of prevention distract us from recognizing the true potential of rationalizing care, beginning with an effective primary care infrastructure. Coordination of care saves money during chronic illness and at the end of life. We should remember all of the fundamental aspects of primary care in these discussions - prevention, early detection, optimal intervention, and the effective coordination of care. Todd Staub

Dana Haza said...

Thank you for an excellent summary of this complex issue. The National Changing Diabetes® Program (NCDP) supported the research you cite because we believe there is a need for accurate analysis of the true costs and benefits of medical intervention in diabetes. We know from scientific study that comprehensive and effective treatment of diabetes can prevent or delay costly and debilitating complications such as blindness, nerve damage and kidney failure. But current budget estimates look at only a 10-year window of time, and much of the financial benefits of early intervention occur after that time period. Modeling shows that prompt treatment of diabetes can reap a financial off-set that builds over many years and can’t be captured by a short-term analysis. To begin to remedy this, the NCDP and many of our member organizations support The Preventive Health Savings Act of 2009, which will update existing budget law. We hope lawmakers will consider the whole picture and take a longer view as they debate the value of preventive investments in diabetes and other chronic diseases.

Dana Haza
Senior Director
National Changing Diabetes® Program (a Novo Nordisk program)