Can better prevention save healthcare costs?

In the debate over healthcare reform, another claim one often hears is that better prevention will save us money. I have noted previously how "schlocky" this argument is. Over the weekend, a doctor writing in the Wall Street Journal puts the point as follows:

Prevention of a disease, we all assume, should save us money, right? An ounce of prevention . . . ? Alas, If only such aphorisms were true we’d hand out apples each day and our problems would be over.

It is true that if the prevention strategies we are talking about are behavioral things—eat better, lose weight, exercise more, smoke less, wear a seat belt—then they cost very little and they do save money by keeping people healthy.

But if your preventive strategy is medical, if it involves us, if it consists of screening, finding medical conditions early, shaking the bushes for high cholesterols, or abnormal EKGs, markers for prostate cancer such as PSA, then more often than not you don’t save anything and you might generate more medical costs. Prevention is a good thing to do, but why equate it with saving money when it won’t?

Think about this: discovering high cholesterol in a person who is feeling well, is really just discovering a risk factor and not a disease; it predicts that you have a greater chance of having a heart attack than someone with a normal cholesterol. Now you can reduce the probability of a heart attack by swallowing a statin, and it will make good sense for you personally, especially if you have other risk factors (male sex, smoking etc).. But if you are treating a population, keep in mind that you may have to treat several hundred people to prevent one heart attack. Using a statin costs about $150,000 for every year of life it saves in men, and even more in women (since their heart-attack risk is lower)—I don’t see the savings there.

As a daily consumer of a statin, I appreciate the extra lifespan, even at the cost. So I am not opposed to prevention--only to the claim that it will yield substantial budgetary savings.

Update: A reader points out that this doctor's brief mention about the budgetary effects of reduced smoking is likely inaccurate. The Congressional Research Service has concluded,

"Governments save on the costs of old-age medical care, social security, and nursing home care due to the earlier death of smokers...Smoking has apparently brought financial gain to both the federal and state governments, especially when tobacco taxes are taken into account. In general,smokers do not appear to currently impose net financial costs on the rest of society."

See also Viscusi. This fact strengthens the doctor's point: Even prevention via reduced smoking is not a money-saver.

To avoid misunderstanding among many of the young impressionable readers out there, let me emphasize that this fact does not mean that smoking is desirable. (As a personal lifestyle choice, smoking seems pretty dopey to me.) But it does mean that there are not negative externalities to smoking working through its effects on governmental budgets.