Does preventive care save money?

Aaron Carroll argues ‘no’ and–in most but not all cases–I agree with him.  Here is the evidence he cites:

• More health insurance does not reduce emergency department (ED) visits.  States that expanded Medicaid eligibility with ACA funding saw an increase in ED visits relative to non-expansion states.  In Oregon, individuals who won an eligibility ‘lottery’ to get Medicaid coverage had more ED visits than those who just missed out on Medicaid eligibility.  Massachusetts’ health reform–upon which the ACA was largely based–led to increased ED visits.
• Wellness programs rarely decrease costs. Horwitz et al. 2013 found “…little evidence that such programs can easily save costs through health improvement without being discriminatory”
• Accountable care organizations cost savings potential is limited. McWilliams, Chernew and Landon 2017 find that “By 2014, participation in the MSSP was associated with significant reductions in total Medicare fee-for-service spending for ACO patients but with proportionately smaller reductions in hospitalizations and some increases in hospitalizations for ambulatory care–sensitive conditions. In addition, spending reductions were not clearly concentrated among high-risk patients”.

Cost savings are often concentrated in the highest value preventive services, namely immunizations.

• Immunizations save money. Maciocek et al. 2010 find that “…greater use of proven clinical preventive services in the United States could avert the loss of more than two million life-years annually. What’s more, increasing the use of these services from current levels to 90 percent in 2006 would result in total savings of $3.7 billion, or 0.2 percent of U.S. personal health care spending.”  A paper by Goodell, Cohen and Neumann 2009 reviewed over 500 interventions and found that although many preventive services are a good value–as measured by incremental cost effectiveness ratios, “…only a few, such as childhood immunizations and counseling adults on the use of low-dose aspirin are widely regarded as cost-saving.”
• Even reducing smoking rates may or may not be cost savings depending on the time horizon considered. Cigarette taxes reduce smoking which reduces per capita spending per year.  Thus, in the short-run, cigarette taxes are almost certainly cost saving.  In the long run, however, lower smoking rates increases longevity which increases the total number of people the federal government has spend money on for Medicare and Social Security.  The long-run impact depends on which of these two factors dominates.  See this paper by Baumgardner et al. 2012 for more details.

Carroll summarizes the arguments nicely as follows:

There are many good arguments for increasing our focus on prevention. Almost all have to do with improving quality, though, not reducing spending. We would do well to admit that and move forward.

Sometimes good things cost money.