Author Archives: Ashok Reddy

Spending Money to Save Money in Health Care

Apr 5, 2013, 9:00 AM, Posted by Ashok Reddy

Ashok Reddy, MD, is a Robert Wood Johnson Foundation (RWJF) Clinical Scholar in residence at the University of Pennsylvania and a senior fellow at the Leonard Davis Institute of Health Economics.  This is part of a series of essays, reprinted from the Leonard Davis Institute of Health Economics’ eMagazine, in which scholars who attended the recent AcademyHealth National Health Policy Conference reflect on the experience.

With the debate about the fiscal cliff and the sequester hanging so heavily over Washington, it was no surprise that congressional staffers at the AcademyHealth National Health Policy Conference seemed so exclusively focused on cutting health care spending. Some estimated that 30 percent of the $2.5 trillion spent on health care may provide little value; finding interventions that provide high-value care is a top priority that tends to obscure any other possibilities.

In this prevailing atmosphere of stark fiscal reality and gridlocked politics it can be hard to gain traction for the idea that investing in programs that prevent chronic diseases would ultimately decrease the costly long-term expenditures driven by those diseases. But that’s where traction is needed.

Take diabetes for instance. One estimate has the medical treatments for people with diabetes costing 2.4 times more than expenditures that would be incurred by the same group in the absence of diabetes. By preventing the development of diabetes in an individual you decrease the risk of heart attack, kidney failure and amputated extremities.

It is true that, so far, research in cost-effectiveness analyses has not shown that prevention reduces medical costs. Besides childhood vaccination and flu shots for the elderly, few health care services ‘save money.’ A 2010 Health Affairs article calculated that if 90 percent of the U.S. population used proven preventive services, it would save only 0.2 percent of health care spending.

View full post