Reform proponents repeat this like a mantra. Because it seems so intuitive, it has become conventional wisdom. But like most conventional wisdom, it is wrong. Overall, preventive care increases medical costs.
This inconvenient truth comes, once again, from the CBO. In an Aug. 7 letter to Rep. Nathan Deal, CBO Director Doug Elmendorf writes: "Researchers who have examined the effects of preventive care generally find that the added costs of widespread use of preventive services tend to exceed the savings from averted illness."
How can that be? If you prevent somebody from getting a heart attack, aren't you necessarily saving money? The fallacy here is confusing the individual with society. For the individual, catching something early generally reduces later spending for that condition. But, explains Elmendorf, we don't know in advance which patients are going to develop costly illnesses. To avert one case, "it is usually necessary to provide preventive care to many patients, most of whom would not have suffered that illness anyway." And this costs society money that would not have been spent otherwise.
Think of it this way. Assume that a screening test for disease X costs $500 and finding it early averts $10,000 of costly treatment at a later stage. Are you saving money? Well, if one in 10 of those who are screened tests positive, society is saving $5,000. But if only one in 100 would get that disease, society is shelling out $40,000 more than it would without the preventive care.
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