Preventive Care and Cost Savings

Among those who crunch the numbers, the consensus is that providing people with preventive care doesn't offer appreciable cost savings to the healthcare system. To oversimplify, the bulk of your medical costs will occur when you die, or when you're in a catastrophic accident. Preventive care won't stop either.

This is used by some to advance the disingenuous argument that preventive care therefore has no real value, and shouldn't be covered by insurance. A common formulation of this argument is that it's "like auto insurance covering oil changes or new windshield wipers". Well, no. It's like preferring a dealer or car manufacturer that offers free oil changes and wiper blades as an incentive to buy or get service from them - if you want to, in effect, prepay for those services, all the more power to you. (The analogy, also, works much better with wiper blades than with oil changes, but for now I'll give that issue a pass.)

Here's the argument, nestled into a greater heap of disingenuousness:

Congress’s health plan pays for routine expenses like office visits and vaccinations, for example, which is like auto insurance covering oil changes or new windshield wipers. As a result, the premiums are steep — upwards of $13,000 a year for a family (69 percent of which is paid by the government). To provide the 50 million Americans who are now uninsured with such a plan would require scary tax increases.

I don't doubt that the cost of health insurance for those on the federal health plan now amounts to $13,000 per family, but you would have to be pretty dense to believe that the lion's share of that cost results from annual physicals and vaccinations, or that the cost would decrease by any appreciable amount if those benefits were eliminated.

In the county where I live, you don't need health insurance to get your child's routine vaccinations covered - the County will provide them. My child's doctor prefers to bill vaccines through the county without regard to a child's healthcare coverage, as it allows his office and his patients to avoid having to deal with copays and deductibles. Why would the county do such a "foolish" thing? Because there's a significant public health benefit in not having outbreaks of measles, mumps, polio, rubella, diphtheria, tetanus, even chicken pox.... Maybe vaccines weren't such a great example, either? But leaving that aside, as well, despite that cost being largely borne by the public the cost of health insurance isn't any lower here than it is in similar parts of the state or country. I suspect that for less than $200 per year per presently uninsured person above current expenditures, you could arrange a full annual physical, a reasonable battery of screening tests, and vaccines. After all, even for the fully insured, in a survey covering 2002 through 2004 "The average physical lasted 23 minutes and cost $116, including related laboratory and radiology services." Whatever the merits of the annual physical, like vaccines, their cost is a tiny part of the $13,000 insurance tab described, and it would not require "scary tax increases" to include vaccines and physicals in every health insurance plan in the nation.

The author doesn't do a good job maintaining internal consistency:

An alternative strategy for Congress would be the new “fitness club” model offered by some doctors, in which members pay $65 a month for same-day or next-day access to primary care services. This would involve no insurance companies, so it would save administrative expenses.

So the reason we pay $13,000 per year for health insurance is because of primary care - office visits and the like - but enormously improved primary care is readily available to anyone, insured or uninsured, for $780 per year? Do try again.

If you were to analyze the portion of the insurance premium that goes to end of life care or to chronic disease management, that number starts to look large and scary. So why the focus on vaccines and office visits? In the case of that particular author, apparently because the health care clients for whom he works favor HSA's and high deductible insurance plans. So it appears to be a sleight of hand - lobby for your clients, pretend that the cost problem comes from routine office care, and distract people from the fact that you're really trying to shift a huge portion of the cost of chronic disease management from the insurance company to the individual.

Yes, that form of health coverage can return huge savings to insurance companies and employers. It also creates huge costs for healthcare consumers. I commented on this last fall. Although the author doesn't actually argue that his proposed reforms will protect the pocketbooks of individuals - just to hold down the cost of insurance - he sure implies that he's trying to save people money (the federal insurance plan "does little to encourage people to be smart health care shoppers"). I think he should be more honest. For that matter, so should the newspapers that run his columns, both in relation to the fact that he's a healthcare industry consultant and in relation to the interests of the clients he serves and how their interests may diverge from those of the taxpayer or the insured individual.

An essay by the same author argues explicitly against insuring preventive care, but again without much internal consistency. (Granted, he admits this time around that vaccines offer a big payoff, but that creates an inconsistency with the argument he makes in his other editorial that insured vaccinations are like getting free wiper blades for your car.)

"Prevention gives you a better quality of life," says Uwe Reinhardt, a health economist at Princeton, "but I have never seen any analysis that shows that in the long-run a society that uses a lot of prevention will have lower health care costs."

I've already mentioned the public benefit that come from some forms of preventive care, such as vaccinations. It's worth elaborating on that. It may well be true that the cost of having somebody die young from a cancer that could have been treated with earlier diagnosis, or a heart attack or stroke that could have been prevented by a health screening followed by medication or surgery. In some cases it may cost more healthcare dollars to treat them now, followed by the cost of management of their condition, followed by the cost of whatever ends up killing them.

But what of that "quality of life" thing? Let's leave the benefits to the individual aside for the moment. Let's consider societal benefits. If "lower quality of life" means reduced productivity, disability, welfare dependence, etc., significant costs are imposed upon society. They don't happen to be healthcare costs, but they're nonetheless costs. Employers may lose a productive employee, the tax base is diminished by their shortened work life, they end up in a medical bankruptcy... the costs can be significant. If we're going to have an honest discussion of the benefits of preventive care, even if we completely discount the value of quality of life to the individual, we should be considering those costs to society.

Also, I'm personally of the opinion that primary care providers benefit from seeing their patients over time, both in terms of spotting changes in health and in terms of learning how to interview, diagnose and treat other patients. It's fun to imagine that a doctor fresh out of medical school is every bit as skilled as a doctor with twenty or thirty years of practice behind her, but on the whole experience does count. Taking the argument at face value, can we be sure that the lack of obvious financial return on preventive care "proves" that the care returns nothing to the healthcare system? Or should we explore the impact of depriving patients and doctors of any sort of long-term relationship, particularly in relation to the growth of a doctor's skill set? Also, the relationship goes both ways - some patients will be a lot more comfortable discussing their health with a doctor they know and trust.

And then, this:

The potential game-changer over the long-term isn't prevention per se but behavior change. Prevention - taking meds and getting special checkups and the like - may be good for us, but it also imposes societal costs that may outweigh any savings, and often involves folks who've already got serious ailments to manage.

* * *

Changing the way kids view fruits and vegetables versus potato chips and candy bars could eventually bend the cost line, says Len Nichols of the New America Foundation. If we reduce obesity and the incidence of new chronic ailments over time - and thus cut the presence of super-costly multiple chronic conditions when people reach the end of their lives - Nichols says, "the impact could be profound."

So he does endorse a pretty massive form of preventive care. I guess he just thinks this form will somehow be free.

Update: Bill Moyers interviews a former insurance company executive who describes what Matt Miller's lobbying for. Toward the end of the executive's tenure in the health insurance industry,

Well, I was beginning to question what I was doing as the industry shifted from selling primarily managed care plans, to what they refer to as consumer-driven plans. And they're really plans that have very high deductibles, meaning that they're shifting a lot of the cost off health care from employers and insurers, insurance companies, to individuals. And a lot of people can't even afford to make their co-payments when they go get care, as a result of this. But it really took a trip back home to Tennessee for me to see exactly what is happening to so many Americans

Ironically, Miller trots out his past role in the Clinton Administration to try to claim credibility on these issues, while in fact "the industry is resorting to the same tactics they've used over the years, and particularly back in the early '90s, when they were leading the effort to kill the Clinton plan" - wherever Miller stood last time, this time it's fair to infer that he's advocating for his industry clients.