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Where have all the savings gone, long time passing? by Eric Novack

Where have all the savings gone, long time passing?

I am not the first to comment on this New England Journal of Medicine article, but it does deserve a place here at THCB. 
It has been the dogma of many at THCB that prevention = savings, and substantial ones at that!Put in the context of this study from the Netherlands, also published this month, is it time for some health care reformers to change their tune on how the health care reforms they promote will save money?

And before simply putting the savings to ‘pay’ for this on the elimination of administrative costs, please see my previous post.

And before saying that electronic medical records will, by themselves save 80 billion dollars per year (as I heard former President Clinton say at a Wisconsin rally this weekend- as an aside, I love XM radio for unlimited access to C-SPAN), consider the $4 billion struggle at Kaiser Permanente to get medical records for a measly 8.6 million patients… Now, with over 300 million in the country, that might mean an investment of well over $120 BILLION (with a B) to TRY to computerize the electronic medical records of the country.
 

Do not misread me to claim I am a proponent of the status quo, nor that I am not in favor of the WORD OF 2008—change— it is simply that I would like to hear more from those who want to institute certain kinds of change— how will they really ‘save money’ while simultaneously increasing access without severely impacting my liberty as a patient.

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9 replies »

  1. Let’s face it, the greatest savings would come by encouraging people to die young, before they have a chance to develop chronic conditions or other illnesses that are expensive to treat. So, if that’s the goal, we should not only stop trying to prevent illness, but we shouldn’t waste our time improving the quality of sick-care either. Not only should we encourage risky lifestyles and poor eating habits, poison our children with deadly pollutants, eliminate workplace safety requirements, get rid of traffic lights, promote more super bugs, etc., but we should also encourage inaccurate diagnoses, ineffective treatments, and errors and omissions…especially those resulting in avoidable deaths. And while we’re at it, how about creating a culture in which misery and hopeless are the norm, so as to encourage people to kill themselves. All this will certainly reduce overall healthcare expenditures.
    This is the slippery slope we find ourselves when money is the prime focus. If, however, we want to help people live long and satisfying lives, and control healthcare spending, I suggest we take a consumer-centered life-cycle value-driven approach. In this model, we would strive to deliver cost-effective well-care and sick-care using evidence-based interventions (both conventional/allopathic and complementary & alternative care). And we would focus on minimizing waste, while maximizing quality and efficiency, as providers and consumers/patients collaborate in joint decision-making to prevent and treat physical and mental health risk and problems. I’ve been writing about such an at this link, this link, and this link.
    To obtain the knowledge and develop the tools we need, however, will cost money. Selecting low-cost technologies with exceptional ability to share information and support decisions would keep costs down. So would incentivizing sick-care and well-care providers to deliver high value care.
    Frankly, I see no other rational alternative!

  2. I am not a fan of the intuitive and anecdotal level, but as you can guess, here we go with anecdotes and intuition:
    I thought a lot about the Dutch study (computer simulation). Apart from my concern whether this study addresses mainly moderate obesity which may not be that bad, as opposed to the morbid obesity so frequent in the US, I try to picture the obese patients in my specialty practice. They tend to have DJD and DM II, and often heart disease or negative work up for atypical chest pains (the latter is the case, admittedly, also a lot of my non obese patients). I think that obese people cause a lot of chronic health care cost and costly end of life-care, while the trim ones may just need the latter. In that context, the Lubitz article in the New England Journal in 2003 makes sense, and I am going to read it ASAP (thanks for the tip).

  3. I am not a fan of the intuitive and anecdotal level, but as you can guess, here we go with anecdotes and intuition:
    I thought a lot about the Dutch study (computer simulation). Apart from my concern whether this study addresses mainly moderate obesity which may not be that bad, as opposed to the morbid obesity so frequent in the US, I try to picture the obese patients in my specialty practice. They tend to have DJD and DM II, and often heart disease or negative work up for atypical chest pains (the latter is the case, admittedly, also a lot of my non obese patients). I think that obese people cause a lot of chronic health care cost and costly end of life-care, while the trim ones may just need the latter. In that context, the Lubitz article in the New England Journal in 2003 makes sense, and I am going to read it ASAP (thanks for the tip).

  4. The battleground is not length of life. It is, as James Fries first suggested, functional life span- the length of time that people can continue to do what they wish to do, and avoid being institutionalized or dependent on family members. The purpose of prevention/health improvement is not to prolong life. What has been happening in the last twenty plus years: functional life span has been increasing, and it has enabled people who wish to continue working to work into their seventies or even eighties. This is what most boomers tell survey researchers they wish to do.
    There are profound fiscal and family consequences to people being healthy enough that they can continue working, or permit their family members to continue working. If we can figure out obesity thing, and continue the trend of the last twenty years, for Gen X’ers, age 65 will be biologically late middle age. Problem is: it is happening slowly enough that we cannot rely, as the candidates seem to suggest, on the fiscal dividend to fund their visions.

  5. With respect to the Dutch study, if healthy people live to 84 on average while the obese die at 80 and smokers at 77, it implies that the life years lost by smokers and the obese are retirement years, for the most part, and not highly productive taxpaying working years.
    If healthier lifestyles reduce the number of sudden deaths from heart attacks at 55 or 60, but many of the same people die 20 years later of dementia or Alzheimer’s, it’s quite likely that their lifetime medical costs will be higher as a result. It may well be that from a societal perspective, and certainly from an individual perspective, the additional life years are beneficial and desirable even if it increases healthcare costs. I suspect, however, that all the hype about preventive care saving money for the healthcare system over the long term is wrong and disingenuous, especially when politicians suggest prevention as a way to partially pay for universal insurance coverage instead of higher taxes.

  6. James Lubitz (Dir. of Aging Studies at CDC) and colleagues published an article in the New England Journal in 2003 contravening Martin’s guess- specifically, people who are healthy at age 70 not only live longer but generate smaller lifetime health spending than people who are not healthy at the same age. His conclusion: wellness activities that generate more healthy older people will reduce medical costs.
    Kenneth Manton of Duke published a study in the Proceedings of the National Academic of Sciences in November 2006 documenting accelerating declines in disability rates among those over 65 over twenty year period, and forecast that if the declines he saw thru 2004 continued over the next two years, Medicare spending in 2009 would be more than $80 billion less than they would have been if the disability rates among the elderly seen in 1984 had continued.
    There is a discouraging literature on disease management among the Medicare population that looks at the payoffs from specific interventions. However, I continue to believe there is a lot of gold to be mined here. The longer we can postpone avoidable illness, the more time we have to grow the economic base we will need to pay for the eventual very large costs of the baby boomers.
    I review this argument in detail in my forthcoming book, The Long Baby Boom: An Optimistic Vision for a Graying Generation, which will be published in May by Johns Hopkins Press.

  7. Jeff
    I have never seen a comparison between the cost of preventive interventions and behavior changes but the latter often don’t come free. Additionally, in calculating cost, one would have to include success rates. Interventions might have a better batting average.
    I also think the notion that as people live longer they work longer, thereby generating tax revenue to blunt the proportionate increase in health spending, is questionable. Is there any evidence of that historically? Why might that change going forward?
    My guess, longer, healther lives inescapably cost a lot more money and only a major change in the strenght and vitality of the rest of the economy prevents the house of cards from crumbling. Think mid 90s
    Martin Goldsmith

  8. Jeff- good points… but, as you say, implying that there will CERTAINLY be savings from some grand scheme— without specifically saying what treatments will be allowed and to whom, what will NOT be allowed and to whom, and what people will be FORCED to do, and PROHIBITED to do— is fantasy.

  9. This issue is really messy, and Eric is right to caution the candidates and their followers that prevention is not a panacea.
    However, the NEJM article examines mainly the cost/benefits of preventive interventions (drugs, procedures, etc.) and not of behavior change directed at risk behaviors itself. What are the costs of programs to reduce risky sexual behaviors that lead to HIV, as opposed to the full suite of HIV drugs after someone is infected, etc.? The Netherlands article appears to use the criterion of lifetime medical expenses, and dismisses the social and economic impact of additional lifeyears created by interventions (e.g. additional earnings by healthy people, family caregiving avoided, etc.). Tremendous savings could be had by broadly reducing the prevelance of obesity, and to explain them away because people live longer and eventually die of something else is perverse and unhelpful. The Rand study of a year or two ago did something similar, sweeping away the social benefits of things like a cure for cancer or a molecular solution to aging by claiming that lifetime Medicare expenses would increase precisely because these mythical interventions were effective. Additional life years are not merely costs to society if they are lived by healthy people who generate tax revenues by working.
    We may not be a mood to be preached at (see Millenson’s objections to Huckabee of a few weeks ago) by politicians about this, but we need to look more closely at these studies before concluding that there are no social benefits from attacking the behavioral causes of avoidable illness or from lengthening our functional life spans.

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