Value of Prevention as a Cost-Cutter Doubted

Published October 12, 2009

While President Barack Obama has repeatedly touted prevention as a cost-cutting measure and a key element of his health care reform plan, funding preventive health care does not appear to lower costs, according to Sally Pipes, author of Top Ten Myths of American Health Care.

Although prevention is often a medically advisable process, Pipes, executive director of the Pacific Research Institute in San Francisco, and other health care experts point out it’s not generally a cost-cutting measure.

In fact, they say, prevention often costs more than waiting for problems to occur and then treating them. Pipes notes countries with government-run medical systems typically forego preventive medicine as not cost-effective.

“Where you have a global budget, it’s too expensive to have a [prostate exam] every year, or have it as a regular thing, or, say, a colonoscopy for people over the age of 50. Those just aren’t part of routine prevention, because they’re expensive tests,” Pipes said. “The only way you can control costs is to control the supply of what you’re providing.”

No ‘Magic Bullet’

Dr. James Bruehler, a professor of economics at Eastern Illinois University, says preventive medicine does not save money at the individual level either. He points out individuals must weigh the reduced probability of ailment against the costs of unnecessary and often expensive testing.

“When you take large numbers of people and aggregate them,” Bruehler said, “the reduced probability of ailment turns into the fact that small numbers of people are prevented from getting the ailment, but it is essentially in the calculation either way. If it made sense to everyone at an individual level, it would make sense in the aggregate.”

Michael Tanner, a senior fellow at the Cato Institute in Washington, DC, says he believes prevention is unlikely to improve health and would not be effective as a cost-cutting measure even if it succeeded.

“Prevention is the magic bullet that’s [supposedly] going to give [the Obama administration] all kinds of savings it can use to finance health care reform, and it’s just not there,” Tanner said.

Private-Sector Successes

Pipes points out employers have a vested interest in keeping their workforces well. Instead of paying for more tests, companies such as Safeway and GlaxoSmithKline offer lower premiums to employees who quit smoking and adopt healthier lifestyles. Other companies offer healthier lunches at a lower cost than, say, a cheeseburger and fries.

Pipes says this form of prevention can be beneficial at a much lower cost than expensive testing for large communities who may never contract a disease.

Loren Heal ([email protected]) writes from Neoga, Illinois.

For more information …

Top Ten Myths of American Health Care, Pacific Research Institute, 1998. $19.95 on