The Cost of Preventive Care

Although popular wisdom suggests that if you prevent disease before it strikes, people will be better off and costs will be down, this turns out to be only half true. People indeed are better off, have an improved quality of life, but health care costs are not reduced.

Among the premises underlying the establishment of Accountable Care Organizations (ACOs) was the notion that preventive care, especially for high-risk patients and those who have chronic illness (e.g., asthma, heart failure) would save money because patients would have better management and care coordination and fewer crises which would then reduce costly emergency department visits and inpatient hospital stays. However, a recent study in Health Affairs showed this is not the case (McWilliams, J.M., Chernew, M.E., Landon, B.E. “Medicare ACO Program Savings Not Tied To Preventable Hospitalizations Or Concentrated Among High-Risk Patients.” Health Affairs 36:12, Dec 2017, 2085-93).

Their study showed that reductions in spending occurred for low-risk patients rather than high-risk; hospitalizations for high-risk patients were not decreased. Although preventive care did not result in cost savings for the high-risk chronic patient population, it did result in better quality of care as a result of better access to care and an enhanced patient experience of care. The researchers’ suggestion is to decouple cost-lowering strategies from quality improvement and clinical outcomes. However, since ACO incentives are rewarded based on quality AND cost savings, it’s possible that physicians treating high-risk patients with chronic conditions may be penalized because their care not does not translate into financial gains for their organization.

These findings confirm an earlier study by the Robert Wood Johnson Foundation    (https://www.rwjf.org/en/library/research/2009/09/cost-savings-and-cost-effectiveness-of-clinical-preventive-care.html) that reviewed more than 500 studies that examined the cost benefit of prevention. Of the more than 20 interventions studied, only two were associated with cost savings: childhood immunizations and counseling adults on the use of low-dose aspirin.

Even smoking cessation counseling which would seem like a no-brainer to reduce disease and costs was found to not be effective at reducing costs. A report in the New England Journal of Medicine (http://www.nejm.org/doi/full/10.1056/NEJMp1210319) found that stopping smoking would reduce costs in the short run but people would then live longer and use more health care services.

It turns out that good health services are not always coupled with reduced health care costs, although much health care policy is based on this presumed link. Preventive care has been shown to improve health outcomes and quality of life. Even if costs are not reduced, good care is worth doing and policy is worth reformulating.