Common wisdom tells us that the more people are insured, the more preventative care happens, the less complex and expensive illness we treat, and so the less we have to spend on healthcare overall.
This logic was a large part of the rationale for the Affordable Care Act. As President Obama said in his 2009 address to Congress, “There’s no reason we shouldn’t be catching diseases like breast cancer and colon cancer before they get worse. That makes sense, it saves money, and it saves lives.”
Interestingly, that's all wrong.
As the New York Times recently reported, "There’s strong evidence from a variety of sources that people who have health insurance spend more on medical care than people who don’t. It also turns out that almost all preventive health care costs more than it saves." Jonathan Gruver, an MIT Economist, goes on to explain: “It’s a nice thing to think, and it seems like it should be true, but I don’t know of any evidence that preventive care actually saves money,”
Long story short, good preventative care saves money for individual patients. It doesn't, however, save money overall since it costs more to help everyone avoid the disease than it does to treat the few people who would have ended up getting it. Plus, as we've explored in other posts, the newly insured also tend to place a burden on providers and hospital systems, since these patients tend to be sicker than average.So if treating complex illness is expensive, and preventing illness is expensive, is there any way that we can be active about saving money as providers and administrators?
Yes. I think there are a few things to keep in mind, even as it can seem discouraging when the "right" thing (preventative care) doesn't ultimately save costs to the overall system.
First, medical providers often know what the best course of treatment is for an individual patient (even with a healthy consideration of costs), even if the population-level design can be murkier. Plus, as the New York Times reports, cost savings do happen when providers are able to make sure that work isn't duplicated or wasted. For instance, medical collaboration can keep patients from falling between the cracks during transitions. And telemedicine can decrease overall costs in a hospital system, decrease length of stay, and improve readmissions. Dr. Brent C. James affirms that this type of measure can decrease costs, calling it the “do it right the first time" approach.
To explore how telemedicine decreases costs and improves care, click here:
