Does Prevention Make A Difference?

Experts disagree about whether it saves money or improves healthcare
August 11, 2009 -- Having worked inside healthcare for 30 years -- 20 years at Stanford and 10 years at Palo Alto Medical Foundation -- in positions that allow me to hear the internal dialogue of the provider organizations, I can assure you that any high level administrator or clinician knows that prevention (along with any sound practice of primary care) makes the overall care less expensive and better.
 
Every high level administrator or clinician has also been shown how the payment system makes it impossible to create an incentive to move to this model. 

However, plenty of experiments, including those conducted by the feds in Wenatchee WA as precursors of the medical home modes, have shown that the total net spending goes down and quality goes up simultaneously.  I am particularly familiar with this experiment because participants are active members of the Quality Council of the American Medical Group Association, of which I am the current chair.  We have had presentations from this group -- formally and informally -- at AMGA's annual conference and at the Institute for Quality Leadership (the other yearly meeting of the group). 

I would add that prevention is too narrow of a term for the changes that come about from the medical home model (itself a new iteration of old established public health concepts).  There are large savings which are realized in a shorter time period than those resulting strictly from prevention. 
 
For example, appropriate handoff after discharge for conditions such as diabetes-related hospitalizations and for congestive heart failure admissions (which I would classify as follow-up rather than preventive care) can save demonstrably large quantities by reducing the rate of re-admission (also accurately measured with the time to readmission metric) and can clearly improve the quality of care as measured by standard outcome measures.

The trick, of course, will be to make the payment system align with this re-orientation of what we call primary care.  Again, many of the experiments conducted by the government, as well as experiments carried out privately inside of the large medical groups, show that this is achievable.
 
Tomas Moran is the founder and chairman of the board of Health Metrics Systems Inc. At Stanford Hospital, he held a variety of positions, and ended his career there as associate director of quality. From 1999 until earlier this year he was senior director of quality and planning at the Palo Alto Medical Foundation.
 
Part II
By Stephen Gregg
 
Investment in prevention is far from a slam dunk cost saver if you understand the more global dimensions of costs and industry cash flow.  First of all you have the charges of preventers, the 25 percent override to offer it as a covered benefit. Then the guys who suffer the lost revenues from these good works are known to respond to falling revenues with measures that exceed the initiating cost saving theory. 
 
The dilemma of all cost containment theory is its monolithic assumption that if we apply corrective measures, those suffering the loss on the other side do nothing or can't do anything, which is of course usually absurd. The documented history of healthcare cost containment goes back decades and is practically a laugher.  It is contained in one of the Democratic national platforms in the 60's to the effect that the
reason why we have unacceptably high healthcare costs (of that day) is because we have an inadequate supply of hospital facilities and physicians. 
 
This was of course followed by major Hill-Burton investments in hospital expansion and greatly expanded production of medical schools on a theory that increased supply would tame fees. Oops! Then we discovered that community pathology was infinite. Very popular theory of the day -- unsubstantiated going forward -- populism.  It would seem to me that if any substantive community were reducing its
premium costs on a sustained basis because of breakthrough practices, we would or should know more about it.  

Indeed much of the very theory of HMOs was prevention and paying providers to provide health.  
If anything, I am sort of surprised how quickly we are simply repackaging the same stuff.  I used to think if we cut hospital utilization in half, dealt with providers known to be less costly, intervened on large cases, and negotiated preferred rates in exchange for more focused patients, we would get to sustainable strategy, but we didn't. 
 

The question is not whether prevention is good or bad policy, but whether it can be relied upon as a key leverage point to reduce healthcare costs. I don't think it can, but what do I know other than the nature of how the ebb and flow of money works in this business.

Stephen Gregg is a retired hospital administrator and health plan chief of staff. He can be reached at [email protected].

 

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Comments

The CBO points out that prevention will add to costs. OF Course! A no-brainer. But the opponents and those on the fence will cite the expense as a reason to avoid reform. Every farmer and every miner knows they have to put money into the land before they reap the rewards. Prevention is an activity that pays future dividends and our impatient society and their elected officials must be informed to look at it that way. Fred Matthies

Fred, what is the basis for your belief other than your own deductive reasoning (which I can understand as being reasonable, but just maybe not a reliable assumption)? Getting someone else to take the risk to pay for your assumption is a tough sell. If it has such a profound payoff, why not insist on this as an individual out of pocket expense, to conform with oil changes not being incorporated in auto insurance? I have been an observer of health care cash flows for decades, and I honestly just do not see the overwhelming leverage on costs from "investment in prevention", long or short term. Like using a squirt gun to fight a forest fire. But if you have evidence, correlating prevention "investment" with reduced premiums, let me know. Maybe we need some first rate "clinical trials" in this regard? Please understand having fewer diabetics, fewer heart surgeries, and the like does not necessarily translate to lower premiums...for alot of reasons.