Health Policy$ense

Why Do We Pay More to Treat Illness Than Prevent It?

Cost-effectiveness vs. return on investment

[cross-posted with the Toward Health blog]

LDI Senior Fellows David Asch, Mark Pauly, and Ralph Muller have a great piece in this month’s New England Journal of Medicine on how we as a society think about preventive versus cancer care. They observe that whenever preventive care strategies are studied, there is an obsessive concern with the return on investment of these strategies and that this same scrutiny is not applied to cancer care.

The entire article is well worth reading, but in summary their argument is that this difference occurs because:

  1. Cancer care is more profitable for health care providers than preventive care.
  2. There are more well-defined and evidence-based strategies for cancer treatment than for preventive care.
  3. Seeking reward for treating illness is a much stronger motivator than avoiding penalty for failing to prevent illness.

 

There is an interesting example of this problem in last month’s Health Affairs. In this study the authors found that providing housing is an effective intervention to reduce emergency department usage in a homeless population. The intervention reduced Medicaid expenditures by $8,724 per person per year, which they noted offset but did not entirely pay for the $11,600 intervention.

Here we have what appears to be a high quality approach to disease prevention. The benefits are myriad. Not only are the patients’ quality of life, morbidity, and mortality improved, the intervention nearly pays for itself in terms of emergency care cost reduction.

However, nearly is not nearly enough because as a preventive care strategy, it is assessed in terms of its return on investment not in terms of cost-effectiveness. Rather than assume that Medicaid should cover an intervention that has clear benefits to patients’ morbidity and mortality, we demand that the intervention pay for itself.

Obviously I feel strongly that cost-control is incredibly important in American health care. However, as we assess the cost-effectiveness of chemotherapies more critically, we also need to assess our willingness to develop and pay for effective preventive strategies.

Harrison Kalodimos is a 2016 MD Candidate at the Perelman School of Medicine, University of Pennsylvania. He plans to go into Family Medicine.