Research Shows Health Coverage Expansions Do Not Lead to Savings
Although many have argued that expanding the number of individuals with health coverage would result in savings, the evidence does not appear to back that up, the New York Times' "The Upshot" reports.
In arguing for passage of the Affordable Care Act, Obama administration officials frequently argued that expanded coverage -- and subsequent access to preventive care -- could positively affect health care spending.
For example, in a 2009 address to Congress, President Obama said, "There’s no reason we shouldn’t be catching diseases like breast cancer and colon cancer before they get worse," adding, "That makes sense, it saves money, and it saves lives."
While administration officials lobbied for the law by emphasizing the value of preventive care, they were "careful" to say the law would rein in spending but not reverse it, according to "The Upshot."
Less-Costly Coverage, More Health System Use
Expected health spending in 2014 has not been finalized, but CMS actuaries have predicted it will increase by 5.5%, the largest bump in five years. Annual health spending growth averaged 9% in the three decades ahead of the recent recession, though recently reached record-low levels. The latest projection could signify the end of that period, according to the "Upshot."
The expected larger growth in spending is in part because of an aging population and an improving economy, CMS actuaries have said, also pointing to the ACA's coverage expansions.
Other research backs that connection between expanded insurance access and higher health spending, the "Upshot" reports. For example, a RAND Corporation study that began in the 1970s found the less costly medical care is, the more people use it.
Another example is the Oregon Health Insurance Experiment, which compared health system use between those who were able to enroll in Medicaid through a lottery system and those who were unable to do so and remained uninsured. The study found those who were able to enroll spent more on health care than those who did not enroll.
Preventive Care Is No Guarantee of Future Savings
Meanwhile, other research has shown that it is rare for preventive care specifically to result in savings.
Joshua Cohen, deputy director of the Center for Evaluation of Value and Risk in Health at Tufts Medical Center, said, "We've all heard it before: 'An ounce of prevention is worth a pound of cure.' It doesn't really play out when you analyze the numbers, and the reason for that is that you have to give a lot of people those ounces of prevention to end up with one person who's going to get that pound of cure."
"The Upshot" notes, "every time you prevent people from dying from one disease, they are likely to live longer and incur future medical expenses," adding, "The patient who benefits from the cholesterol screening may go on to develop cancer, arthritis, Alzheimer's or some other costly illness."
Although some measures do reduce health spending, other common preventive care screenings -- such as those for breast cancer and diabetes -- tend to have costs that exceed savings.
Changing Perspective on Preventive Care
Instead of looking strictly at preventive care's return on investment, some researchers have suggested considering the overall value of preventive care. For example, data on coverage expansions suggest that newly insured residents are under less financial stress (Sanger-Katz, "The Upshot," New York Times, 8/5).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.