Dependability of medical care IS an economic good, promoting and furthering sustainable economic growth.
All else being equal maybe, but 1 - It isn't equal, all of this comes with a huge increase in government spending and regulation which are both negative for the economy, and 2 - It isn't dependable after the change. With the the government paying less then the market the trend with medicaid seems to be less acceptence and longer waits. That trend gets exported to many people on new PPACA plans as well. Not as bad as with Medicare but networks are much tighter.
the earlier that preventative medical care is given the greater the cost savings in the long run
The evidence seems to indicate that preventive care doesn't provide for a net cost saving but rather an increase. Sure for the individual that doesn't get some severe condition because of the preventive care the savings can be large, but for each of those individuals there are many people who the preventive care makes no difference, either they would have avoided the potential condition anyway or they will get it anyway even with the preventive care. Also the whole thing is complicated by the fact that getting some serious expensive condition earlier can prevent a lot of care later if the person in question dies earlier. Obviously early death is a negative, but narrowly in terms of costs of medical care (which was your point) it can be positive, reducing overall costs. Also to the extent the preventive care is screening you will have more false positives, and more costs to follow up on those false positives (and even for side-effects for unnecessary treatment for conditions people don't actually have).
you will have to come up with Macro-Economic analysis that establishes that it ISN'T
That's precious. You make an assertion without support, but I need to provide support an analysis if I disagree.
But I'm game anyway.
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...Sweeping statements about the cost-saving potential of prevention, however, are overreaching. Studies have concluded that preventing illness can in some cases save money but in other cases can add to health care costs. 3 For example, screening costs will exceed the savings from avoided treatment in cases in which only a very small fraction of the population would have become ill in the absence of preventive measures. Preventive measures that do not save money may or may not represent cost-effective care (i.e., good value for the resources expended). Whether any preventive measure saves money or is a reasonable investment despite adding to costs depends entirely on the particular intervention and the specific population in question. For example, drugs used to treat high cholesterol yield much greater value for the money if the targeted population is at high risk for coronary heart disease, and the efficiency of cancer screening can depend heavily on both the frequency of the screening and the level of cancer risk in the screened population. 4 The focus on prevention as a key source of cost savings in health care also sidesteps the question of whether such measures are generally more promising and efficient than the treatment of existing conditions. Researchers have found that although high-technology treatments for existing conditions can be expensive, such measures may, in certain circumstances, also represent an efficient use of resources. 5 It is important to analyze the costs and benefits of specific interventions.
A systematic review of the cost-effectiveness literature sheds light on these issues. We analyzed the contents of the Tufts–New England Medical Center Cost-Effectiveness Analysis Registry ( www.tufts-nemc.org/cearegistry), which consists of detailed abstracted information on published cost-effectiveness studies through 2005. Each registry article estimates the cost-effectiveness of one or more interventions as the incremental costs (converted here to 2006 U.S. dollars) divided by the incremental health benefits quantified in terms of quality-adjusted life-years (QALYs). Low cost-effectiveness ratios are “favorable” because they indicate that incremental QALYs can be accrued inexpensively. An intervention is “cost-saving” if it reduces costs while improving health. Poorly performing interventions can both increase costs and worsen health.
Our analysis was restricted to the 599 articles (and 1500 ratios) published between 2000 and 2005 that properly discounted future costs and benefits. We classified 279 ratios as preventive because they refer to interventions designed to avert disease or injury; all 1221 other ratios pertain to treatments, a category that includes both “tertiary” measures (designed to ameliorate the effects of a disease or condition) and “secondary prevention” measures (designed to reverse or retard progression of an existing condition), such as the use of implantable cardioverter–defibrillators in patients with myocardial disease.
The bar graphDistribution of Cost-Effectiveness Ratios for Preventive Measures and Treatments for Existing Conditions. shows that the distributions of cost-effectiveness ratios for preventive measures and treatments are very similar — in other words, opportunities for efficient investment in health care programs are roughly equal for prevention and treatment, at least as reflected in the literature we reviewed. Moreover, both distributions span the full range of cost-effectiveness. The tableCost-Effectiveness of Selected Preventive Measures and Treatments for Existing Conditions (2006 Dollars). shows the cost-effectiveness ratios for selected interventions of various types (a more detailed table appears in the Supplementary Appendix, available with the full text of this article at www.nejm.org).
These results are consistent with earlier reviews but cover a larger sample of studies and quantify benefits in terms of QALYs. Some preventive measures save money, while others do not, although they may still be worthwhile because they confer substantial health benefits relative to their cost. In contrast, some preventive measures are expensive given the health benefits they confer. In general, whether a particular preventive measure represents good value or poor value depends on factors such as the population targeted, with measures targeting higher-risk populations typically being the most efficient. In the case of screening, efficiency also depends on frequency (more frequent screening confers greater benefits but is less efficient). Third, as is the case for preventive measures, treatments can be relatively efficient or inefficient.
Of course, our review reflects a selected sample of studies in the peer-reviewed literature and does not cover all possible opportunities to spend resources to improve health. In addition, there may be inconsistency among the studies in terms of the methods used. Still, our analysis is based on a large and diverse set of studies that used recommended metrics for cost-effectiveness analysis, and we believe that it offers important lessons.
Our findings suggest that the broad generalizations made by many presidential candidates can be misleading. These statements convey the message that substantial resources can be saved through prevention. Although some preventive measures do save money, the vast majority reviewed in the health economics literature do not. Careful analysis of the costs and benefits of specific interventions, rather than broad generalizations, is critical. Such analysis could identify not only cost-saving preventive measures but also preventive measures that deliver substantial health benefits relative to their net costs; this analysis could also identify treatments that are cost-saving or highly efficient (i.e., cost-effective). ...
nejm.org
Preventive Medical Care
Preventive medical care includes services such as cancer screening, cholesterol management, and vaccines. In making its estimates of the budgetary effects of expanded governmental support for preventive care, CBO takes into account any estimated savings that would result from greater use of such care as well as the estimated costs of that additional care. 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. In such cases, an ounce of prevention improves health and reduces spending—for that individual. 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. Even when the unit cost of a particular preventive service is low, costs can accumulate quickly when a large number of patients are treated preventively. 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 for the many who would make greater use of preventive care.
As a result, preventive care can have the largest benefits relative to costs when it is targeted at people who are most likely to suffer from a particular medical problem; however, such targeting can be difficult because
preventive services are generally provided to patients who have the potential to contract a given disease but have not yet shown symptoms of having it. Researchers who have examined the effects of preventive care generally find that the added costs of widespread use of preventive services tend to exceed the
savings from averted illness. An article published last year in the New England Journal of Medicine provides a good summary of the available evidence on how preventive care affects costs.
After reviewing hundreds of previous studies of preventive care, the authors report that slightly fewer than 20 percent of the services that were examined save money, while the rest add to costs. Providing a specific example of the benefits and costs of preventive care, another recent study conducted by researchers from the American Diabetes Association, the American Heart Association, and the American Cancer Society estimated the effects of achieving widespread use of several highly recommended preventive measures
aimed at cardiovascular disease—such asmonitoring blood pressure levels for diabetics and cholesterol levels for individuals at high risk of heart disease and using medications to reduce those levels.
The researchers found that those steps would substantially reduce the projected number of heart attacks and strokes that occurred but would also increase total spending on medical care because the ultimate savings would offset only about 10 percent of the costs of the preventive services, on average. Of particular note, that study sought to capture both the costs and benefits of providing preventive care over a 30-year period...
cbo.gov
When Preventive Care Costs More
By MICHELLE ANDREWS September 3, 2009 1:56 pm
Many politicians are betting that pending health care legislation will save taxpayers billions of dollars by increasing support for preventive care and ultimately reducing the need for expensive medical interventions in the years to come. But a new study adds to the evidence that while preventive health care may save lives, it does not necessarily save money.
The report, published online this week in the journal Health Affairs, projected that people with Type 2 diabetes who participated in a disease management program to prevent serious complications would cost the federal government slightly more money over 25 years than they would have without any intervention. The management program would save money only among the youngest participants in their 20s, the researchers found.
Diabetes is exactly the sort of chronic condition in which experts would expect preventive care to have a positive financial impact. Disease management programs that help patients keep their blood pressure and blood sugar levels in check and encourage them to get regular foot and eye exams can help forestall or even prevent expensive complications, like kidney failure, amputation, blindness and stroke.
But while these programs may be a boon to patients’ health, the study estimated that the cost savings would generally be offset by the cost of the program itself, estimated at $1,024 annually per patient.
Improved health might be reason enough to finance preventive care programs, the authors noted. “Even though you don’t save money, you recoup a lot of your costs and you get good clinical results,” said one of the study’s authors, Michael O’Grady, a senior fellow at the National Opinion Research Center.
Mr. O’Grady and his colleagues also noted that for chronic diseases like diabetes, it made more sense to estimate the financial impact of preventive interventions over 25 years rather than the 10-year window that the Congressional Budget Office uses to calculate financial impacts. Looking further into the future, they say, yields a truer sense of the cost-benefits ratio.
Still, even the long view did not show that a prevention program like this saves money. Preventive care may well be like any other kind of medical care — expensive now, and in years to come.
prescriptions.blogs.nytimes.com
Obama says preventive care saves money. It doesn't.
politifact.com
Method 1: the narrow view If we only consider the next 25 years, then the effect of quitting is clearly to reduce health-care spending. This is because prevention of death from CHD saves the cost of treating the man for terminal CHD. In addition, the man is likely healthier for those 25 years and therefore has less need for medical treatment.
Method 2: the longer-term view If we take a 35-year viewpoint, to the man’s death at the age of 75 years, then we see that the cost of treating the man for terminal CHD has not been avoided but merely postponed. Moreover, the savings brought about by improved health before the age of 65 years are likely to be cancelled out, perhaps even exceeded, by the increased health-care spending that typically occurs with people aged over 65 years. We see, therefore, that the savings in health-care spending are illusionary.
Variations of this approach have been used in some studies (e.g. reference4). One important variable is the discount rate that is applied. Barendregt et al.5 concluded that with no discounting the break-even year (i.e. when the initial benefit is exactly balanced by the eventual cost) occurs after 26 years of follow-up, but this does not occur until after 37 years with 5% discounting.
Use of Method 1 (instead of Method 2) explains how a CEA can reach the conclusion that anti-smoking actions by physicians can be cost saving. A similar misleading conclusion occurred with a study from California.6 In 1989, that state introduced a major tobacco control program. It was estimated that over the following 15 years, this resulted in a reduction of $86 billion in health-care spending. It can be predicted that these impressive savings will disappear in coming years.
Method 3: the ‘big picture’ perspective So far, we have only considered health-care spending. But non-medical expenditures also have a major impact on the financial implications of people ceasing to smoke. Because the man in the above example did not smoke between the age of 40 and 65 years, he paid nothing in tobacco taxes during those years. The government therefore loses ~42?650 pounds (based on 2010 tax rates). In addition, he almost certainly receives a state pension. Assuming he is a married and receives a full pension, the government must therefore pay an additional 29?770 pounds for the 10 extra years he lives after the age of 65 years (2010 rates). In total, the negative impact on government finances adds up to 72?420 pounds.
From a government perspective, therefore, the effect of this man quitting smoking at the age of 40 years is 2-fold. First, as shown in Method 2, there is no saving in health-care spending; rather, each pound in savings that occurs before the age of 65 years leads to a pound—perhaps more—of spending after the age of 65 years. Secondly, as shown in Method 3, there is a significant negative impact on government finances from the double effect of lost tax revenues combined with increased spending on pension payments.
eurpub.oxfordjournals.org
Longtime readers of this blog will be familiar with the Oregon Medicaid study, one of the most exciting studies in decades of the effect health insurance has on our lives. For those who aren’t, here’s the executive summary: A few years back, Oregon found enough money in its budget to add 10,000 people to Medicaid. Because more than 10,000 people wanted to go on Medicaid, it used a lottery to hand out slots ... and thus gave researchers an excellent setup for a randomized controlled trial of the effect that health insurance had on peoples’ lives.
Last year, the study made big headlines when deep analysis of the data showed that people who had won the lottery had lower rates of financial hardship and scored lower on tests of depression than people who hadn’t won the lottery ... but didn’t show statistically significant improvement on the three objective clinical health markers the researchers had chosen: blood pressure, cholesterol and diabetes control. As I wrote at the time, this was a big, big deal. Only two large-scale random tests have ever been done on health insurance, and both have come back with the same surprising result: giving people Medicaid, or more generous health insurance, doesn’t seem to significantly improve clinical measures of good health.
The headlines eventually faded, but work on the Oregon data set has not. In the fall, the study’s researchers came out with another interesting result: Adding people to Medicaid made no difference in their incomes; they did not drop out of the labor force because they had someone to pay for their health care; nor did better access to medical treatment enable them to boost their incomes. And today they’re releasing another paper, this time on the effect that becoming eligible for Medicaid had on ER usage. “It’s especially important to have that kind of gold standard,” in cases like this, says Amy Finkelstein, an MIT professor on the research team. “Where it’s not just a question of what the magnitude of the effect is, but a priori we don’t know what the sign of the effect could be.” Which is to say: Does giving people Medicaid drive ER usage up, or down?
The answer, it turns out, is “up.” People who got access to Medicaid used doctors more than people who didn’t. But they also used the ER more. And contrary to the theory that Medicaid might divert people from ERs to primary care physicians, the big increases actually came from the somewhat-less urgent problems that we were hoping to divert from ERs:
Medicaid increases use for visits classified as “non-emergent,” “primary care treatable,” and “emergent, preventable.” We find no statistically significant change in use of visits classified as “emergent, not preventable.”
Medicaid increases outpatient emergency department visits (visits that did not result in a hospital admission). We find no statistically significant increase in emergency department visits that did result in a hospital admission. It’s not surprising that this is where the increase comes from -- if you’re in a car wreck or your arm has been cut off, you go to the ER whether or not you have insurance. But if it’s a bad case of strep, you might decide to tough it out. What is surprising ... or at least interesting ... is that the visits increased.
As health-care researcher Jonathan Gruber told the Washington Post’s Sarah Kliff, this helps put to rest one of the fonder hopes of health-care expansion, that it would save money through preventative care and diverting people away from expensive emergency room visits.
"I would view it as part of a broader set of evidence that covering people with health insurance doesn't save money," says Jonathan Gruber, a health economist at the Massachusetts Institute of Technology, who has also studied Oregon's Medicaid expansion but is not affiliated with this study. "That was sometimes a misleading motivator for the Affordable Care Act. The law isn't designed to save money. It's designed to improve health, and that's going to cost money." There’s a broader point to be made as well: Obamacare probably doesn’t solve the problems that most people were expecting it to solve...
bloombergview.com
Health care reformers often argue that increasing patients’ access to doctors (especially primary care doctors) can actually lower health care costs in the long run, as these doctors can help diagnose and manage conditions before they lead to more expensive treatments and hospitalizations. But a new paper by economists Robert Kaestner and Anthony T. Lo Sasso disputes that theory. Here’s the abstract:
By exploiting a unique health insurance benefit design, we provide novel evidence on the causal association between outpatient and inpatient care. Our results indicate that greater outpatient spending was associated with more hospital admissions: a $100 increase in outpatient spending was associated with a 2.7% increase in the probability of having an inpatient event and a 4.6% increase in inpatient spending among enrollees in our sample. Moreover, we present evidence that the increase in hospital admissions associated with greater outpatient spending was for conditions in which it is plausible to argue that the physician and patient could exercise discretion.
...The authors further conclude that “the implication of these findings is that expanding health insurance, as recent federal reform (Patient Protection and Affordable Care Act) proposes, will be cost increasing.”
freakonomics.com
These low- or no-benefit measures include annual physicals for healthy adults. A 2012 analysis of 14 large studies found they do not lower the risk of serious illness or premature death. But about one-third of U.S. adults get them, said Dr. Ateev Mehrota, a primary-care physician and healthcare analyst at RAND, for a cost of about $8 billion a year.
Similarly, some cancer screenings -- including for ovarian cancer and testicular cancer, and for prostate cancer via PSA tests -- produce essentially no health benefits, causing the U.S. Preventive Services Task Force to recommend against their routine use. The task force bases its recommendations on medical benefits alone, not costs.
The second reason preventive care brings so few cost savings is the large number of people who need to receive a particular preventive service in order to avert a single expensive illness.
"It seems counterintuitive: If you provide care to prevent all these expensive diseases, it should save money," said Peter Neumann, an expert on health policy and professor of medicine at Tufts University School of Medicine. "But prevention itself costs money, and some preventive measures can be very expensive, especially if you give them to a lot of people who won't benefit."
If preventive care could be provided only to those who are going to get the illness, it would be more cost-effective. "But in the real world, the number needed to screen or to treat in order to prevent one case of illness can be huge," said BU's Frakt, who blogs at theincidentaleconomist.com.
Currently, many people who do not benefit from a preventive service receive it, paying something for nothing. Studies have calculated those numbers, which can be surprisingly high.
For instance, 217 high-risk smokers would have to undergo a CT lung scan for one to be spared death from lung cancer, according to a database of studies maintained by Dr. David Newman, an emergency physician at Mount Sinai School of Medicine in New York City. One hundred post-menopausal women who have had a bone fracture would have to take drugs called bisphosphonates in order for one to avoid a hip fracture.
By comparison, only 50 people with heart disease must be treated with aspirin for one to avoid a heart attack or stroke, making this a good buy.
The numbers of people who need to be treated for one to benefit are so high because so few will get the disease the preventive is meant to avert. It's like treating every house for termites, said Neumann, co-author of the Robert Wood Johnson report: The vast majority would never have gotten infested in the first place, so the thousands spent to avoid the infestation is money for nothing.
The failure of many preventive services to improve health, plus the large number of people who have to receive preventive care for one to be spared an illness he or she would otherwise get, limit the economic savings...
reuters.com |
