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.

Preventive care also keeps people productive, enabling them to keep earning well into their senior years. Health care problems forced 35% of retired people into an early retirement before they were financially ready.

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. In 2010, 21.4% of adults had one or more emergency room visits. By 2017, that had decreased to 18.6%.

One reason is that a lot of adults use the emergency room as their primary care physician. In 2014, 7.0% of adults aged 18-64 went because they really had no other place to go for health care, regardless of health insurance status. 77% went to the ER due to the seriousness of the problem, which includes those who were sent by their doctor. And, 15.4% of uninsured are more likely to use the emergency room due to lack of access to other providers.

The cost of emergency room care for the uninsured can be extremely high. When the uninsured can't afford to pay it, the cost gets shifted to your health insurance premiums and to Medicaid.

Sadly, the four leading causes of death are caused by totally preventable chronic diseases.

These diseases are heart disease, cancer, chronic lower respiratory disease, and stroke. Heart disease and strokes are primarily caused by poor nutrition and obesity. Lung cancer, the most common type, and CLRD 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. In the United States, 90% of the $3.5 trillion in annual health care expenditures are for people with chronic and mental health conditions.

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.

The ACA Relies on Preventive Care to Cut Costs

The Affordable Care Act requires insurance companies, Medicare, and Medicaid, to provide preventive care services for free. All 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.

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.

The ACA's preventive care provisions include maternity care, mental health treatment, and better prescription drug benefits.

Maternity and Newborn Care

This includes well-woman visits, domestic violence screening, and support for breastfeeding equipment and contraception. This is considered cost-saving preventive care because it's cheaper to provide good nutrition and alcohol/drug counseling for the mother than to treat premature births and fetal alcohol syndrome. These are all detailed as preventive care provisions.

Mental and Behavioral Health Treatment

Many homeless people in America have untreated mental and behavioral health problems. In a June 2015 study, 564,708 people were homeless on any given night in the U.S. Of these, 250,000 or 45 percent had any mental illness. Left untreated, they cost society more from emergency rooms, police action, and jails.

A homeless person is in the hospital four days longer per visit than normal, costing taxpayers an extra $2,414 per visit.

A chronically homeless person costs taxpayers an average of $35,578 per year.

Disabilities and Chronic Condition Coverage

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.

Diagnostic 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. 

Example: 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 citizens have health insurance. 

To cut emergency room costs, Parkland focused on preventive care for its "frequent flyers."

Parkland's program focuses on the patients who had visited the hospital at least 10 times in the previous month. Almost all of them had been homeless at some point in the past year.

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.

Article Sources

  1. Employee Benefit Research Institute. "2019 Retirement Confidence Survey Summary Report," Page 37. Accessed Sept. 12, 2020.

  2. Centers for Disease Control and Prevention. "Table 36. Emergency Department Visits Within the Past 12 Months Among Adults Age 18 and Over," Page 1. Accessed Sept. 12, 2020.

  3. Centers for Disease Control and Prevention. “Reasons for Emergency Room Use Among U.S. Adults Aged 18–64: National Health Interview Survey, 2013 and 2014,” Pages 5-6. Accessed Sept. 12, 2020.

  4. Centers for Disease Control and Prevention. "Potentially Preventable Deaths Among the Five Leading Causes of Death — United States, 2010 and 2014." Accessed Sept. 12, 2020.

  5. Centers for Disease Control and Prevention. "Health and Economic Costs of Chronic Diseases." Accessed Sept. 12, 2020.

  6. Centers for Medicare and Medicaid Services. "Background: The Affordable Care Act’s New Rules on Preventive Care." Accessed Sept. 12, 2020.

  7. Health Affairs. “Medicaid Eligibility Expansions May Address Gaps in Access to Diabetes Medications.” Accessed Sept. 12, 2020.

  8. The Brain & Behavior Research Foundation. "Homelessness and Mental Illness: A Challenge to Our Society." Accessed Sept. 12, 2020.

  9. The New England Journal of Medicine. "Hospitalization Costs Associated With Homelessness in New York City." Accessed Sept. 12, 2020.

  10. National Alliance to End Homelessness. "Ending Chronic Homelessness Saves Taxpayers Money," Page 1. Accessed Sept. 12, 2020.

  11. Cigna. "Essential Health Fact Sheet," Page 4. Accessed Sept. 12, 2020.

  12. Politico. "The ‘Frequent Flier’ Program That Grounded a Hospital’s Soaring Costs." Accessed Sept. 12, 2020.