One of the most misleading and yet pervasive notions about health care is that preventive care saves the health care system money. This leads politicians and others to advocate for laws the prohibit insurers from requiring any cost-sharing for preventive care. Let patients use lots of preventive care, the thinking goes, and the health care system will save lots of money in the long run.
That notion was on display in this exchange between HHS Secretary Kathleen Sebelius had the below exchange with Rep. John Shimkus (R-IL) at Energy and Commerce Hearing last Wednesday:
So, Sebelius believes that catching an illness early and avoiding expensive hospitalization lowers health insurance premiums. Sebelius should know better. Indeed, does she? In other words, is Sebelius lying? For a statement to qualify as a lie it must (1) be untrue and (2) the person uttering it knows it is untrue.
On balance, Sebelius’ statement is untrue. Back in 2008 the New England Journal of Medicine published an article in which the authors performed an exhaustive review of the cost-effectiveness of preventive measures. The authors noted that statements similar to the one made by Sebelius were inaccurate:
Our findings suggest that the broad generalizations made by many presidential candidates can be misleading. These statements convey the message that substantial resources can be saved through prevention. Although some preventive measures do save money, the vast majority reviewed in the health economics literature do not. Careful analysis of the costs and benefits of specific interventions, rather than broad generalizations, is critical.
On health care there is a ton of misinformation masquerading as fact, and the notion that preventive care saves money is one of them. Thus, I’d like to give Secretary Sebelius the benefit of the doubt. I’d like to, but I won’t.
First, when Congressional Budget Office “scored” Obamacare, it never scored any of the preventive care provisions as saving any money. It explained why in a letter to then-Rep. Nathan Deal:
Although different types of preventive care have different effects on spending, the evidence suggests that for most preventive services, expanded utilization leads to higher, not lower, medical spending overall.
That result may seem counterintuitive. For example, many observers point to cases in which a simple medical test, if given early enough, can reveal a condition that is treatable at a fraction of the cost of treating that same illness after it has progressed. In such cases, an ounce of prevention improves health and reduces spending—for that individual. But when analyzing the effects of preventive care on total spending for health care, it is important to recognize that doctors do not know beforehand which patients are going to develop costly illnesses. To avert one case of acute illness, it is usually necessary to provide preventive care to many patients, most of whom would not have suffered that illness anyway. Even when the unit cost of a particular preventive service is low, costs can accumulate quickly when a large number of patients are treated preventively. Judging the overall effect on medical spending requires analysts to calculate not just the savings from the relatively few individuals who would avoid more expensive treatment later, but also the costs for the many who would make greater use of preventive care.
Given that Sebelius was intricately involved in the development of Obamacare, what are the odds that she didn’t know the CBO had said that the preventive care provisions wouldn’t save any money? Slim and none, and slim left two hours ago.
Then there is the fact that the aides in the White House knew that President Obama’s promise that if you like your insurance you could keep your insurance was not true but let Obama repeat it anyway. If the President’s staff aren’t willing to stop a whopper directed constantly at the American public, then one member of his staff will have no concern over a lie concening a less important issue stated at a Congressional hearing.