Why Preventive Care Lowers Health Care Costs

Why Any National Health Care Plan Must Cover Preventive Care

Child with doctor
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Preventive care is any medical service that defends against health emergencies. It includes doctor visits, such as annual physicals, well-woman appointments, and dental cleanings. Some medicines are preventive, such as immunizations, contraception, and allergy medications. Screenings, such as tests for skin cancer, high cholesterol, and colonoscopies, are effective preventive measures. 

The goal of preventive care is to help people stay healthy. The idea is to nip diseases in the bud before they become catastrophic. That keeps health care costs low.

It also keeps people productive, enabling them to keep earning well into their senior years. Most people don't realize that health care costs are the No. 1 cause of bankruptcy. They also don't know that 46% of retired people were forced into it before they were ready because of healthcare problems.

How Preventive Care Lowers Health Care Costs

Preventive care helps lower health care costs in America by preventing diseases before they require emergency room care. Why is this a problem? Hospital care is very expensive, making up one-third of all health care costs in America. The number of emergency room visits has increased, from 115 million in 2005 to 136 million in 2011. A surprising one out of every five adults goes to the emergency room each year.

One reason is that a lot of them use the emergency room as their primary care physician. Almost half of them or 46.3% went because they really had no other place to go for health care.

That's especially true for the uninsured. The cost of emergency room care for the uninsured can be extremely high. This cost gets shifted to your health insurance premiums and to Medicaid.

The other half went because their doctor sent them. Sadly, the four leading causes of death are caused by totally preventable chronic diseases. These diseases are heart disease, cancer, chronic obstructive pulmonary disease, and stroke. Heart disease and strokes are primarily caused by poor nutrition and obesity. Lung cancer, the most common type, and COPD are primarily caused by smoking. Obesity is also a risk factor for other common forms of cancer.

Even before they reach emergency room status, these chronic diseases are expensive to treat. Half of adult Americans have a chronic illness, but they are responsible for 85% of health care costs. They cost an extra $7,900 each, five times more than a healthy person.

Many patients get tired of taking so many medications or can’t afford it. When they cut back, they wind up in the emergency room with heart attacks, strokes, and other complications. This is according to For a Healthier America’s 2014 article, “The Impact of Chronic Diseases on Healthcare.”

Parkland Hospital's "Frequent Flyer Program"

Parkland Hospital is in a low-income section of Dallas, Texas. Almost 85% of its patients are either uninsured or on Medicaid. The hospital spent $871 million on uncompensated care, over half its budget. It's also 2% of all unpaid hospital care in the United States. One reason is that only two-thirds of Dallas's citizen have health insurance. 

In 2015, Parkland created a "frequent flyer" program. It focuses on the patients who had visited the hospital at least 10 times in the previous month. Some of them had annual unpaid bills of $100,000. Almost all of them had been homeless at some point in the past year. For example, one man had been to the emergency room 12 times in the past 30 days.

The Parkland Center for Clinical Innovation refers its frequent flyers to homeless shelters and food pantries. Private donations paid for a computer system that tracks the care these patients receive outside of the hospital. It connects the fire department, school system, and community colleges. For example, the school system can make sure parents are filling their children's asthma medications.

Obamacare was part of the reason Parkland decided to take action. It penalized Medicare payments to hospitals with too many readmissions. It created a financial reason for Parkland to work with community groups to keep its homeless patients healthy.

The ACA Relies on Preventive Care to Cut Costs

The Affordable Care Act has an effective preventive care plan. It should be followed by any national health care reform plan that wants to lower costs. It requires insurance companies, Medicare, and Medicaid, to provide preventive care services for free. All 50 procedures recommended by the U.S. Preventive Services Task Force have no copay. Obamacare requires that they are included as part of the 10 essential benefits.

These specific services include:

  • Maternity and Newborn Care - This is considered preventive care because it's cheaper to provide good nutrition and alcohol/drug counseling for the mother than treat premature births and fetal alcohol syndrome. These include well-woman visits, domestic violence screening, and support for breastfeeding equipment and contraception. These are all detailed as preventive care provisions.
  • Mental and Behavioral Health Treatment - More than 40% of the 610,000 homeless in America have untreated mental and behavioral health problems. Left untreated, they cost society more from emergency rooms, police action, and jails. For example, a homeless person is in the hospital four days longer per visit than normal, costing taxpayers an extra $2,414 per visit. When they wind up in jail, they cost taxpayers $14,480 a year just for overnight stays. 
  • Services and devices to help people with injuries, disabilities, or chronic conditions - Most plans cover services and equipment to help you recover from temporary injuries, like a broken leg. The ACA requires coverage for goods and services to help you maintain a standard of living if you contract a chronic disease, like multiple sclerosis.
  • Lab tests - These must be covered 100% if diagnostic as they are considered preventive. If you've already been diagnosed with a disease, your regular copays and deductibles will apply.
  • Pediatric care - Dental and vision care must be covered.

Prescription drugs - All plans listed on the exchanges will include coverage of at least one drug in every category in the U.S. Pharmacopeia. Whatever you pay out-of-pocket for drugs will also count toward your deductible. This is not true though for all insurance plans prior to the ACA. They also offered this at a cost. 

The strategy appears to be working. In 2018, a Health Affairs study found states that expanded Medicaid saw a 40% increase in the number of prescriptions filled for diabetes drugs. States that didn’t expand Medicaid expansion saw no increase. A Centers for Disease Control and Prevention study revealed that each diabetic patient who is treated saves $6,394 in hospital costs.