Federal budget negotiations in Washington have gridlocked over seemingly irreconcilable priorities. While cutting federal spending is the highest priority for some lawmakers, other lawmakers believe that the federal government has a responsibility to act in certain areas —including health care, education, mental health, criminal/juvenile justice, poverty, and the environment. Yet there is an alternative that meets both objectives. If funds were invested upfront to prevent certain major problems before they arise, future spending would be reduced; and program cuts could occur as a natural consequence of reduced need, not just to save money. Smart spending now will pay off later, often in three to ten years.
We will focus on six key areas in which a prevention model can reduce federal spending while benefiting society, but other policy areas are applicable as well: health care, mental health, education, criminal/juvenile justice, poverty, and the environment.
The U.S. health care system focuses on treating disease rather than preventing it. The Institute of Medicine estimates that costs are $750-$765 billion more than needed to attain existing health outcomes (link; link; link). Chronic diseases in particular, many of which are linked with smoking and obesity, contribute not only to expenses in the health care system, but to a loss of productivity (translating into lost tax revenue). They disproportionately consume resources, having a total economic impact of $1.3 trillion annually (link).
Though arguments have been put forward that preventative health care does not save money (link; link), there is evidence otherwise. Some prevention strategies do save money (link; link), whereas few treatment interventions do (link). The cost of medical treatment is often not even considered in whether such health care should be provided; e.g., Medicare policy explicitly states that costs will not determine coverage of a treatment. In contrast, despite ethical advantages and apparent contribution to quality of life (link), there are great demands for prevention advocates to demonstrate cost savings. We need to consider that even when prevention does not demonstrate immediate cost-savings, it can be “cost-effective” (link; link) by the substantial health benefits for the money spent. Also, in the long run, preventive health care is projected to save substantial dollars compared with treatment. A list of cost-saving and cost-effective prevention strategies is provided by Tuft’s Medical Center (link). Furthermore, the indirect benefit of increased government income tax revenues (due to higher productivity and fewer absences) are often not figured into the financial benefit equation, even though health problems affect national productivity, spending on social programs such as Social Security/Disability and tax revenue (link). And, healthier people and/or their employers pay lower health care premiums, which translate into higher taxable wages for workers.
Nevertheless, there are means to increase the likelihood that prevention will be cost-saving, and not just cost-effective. The prevailing research has been limited in its ability to demonstrate cost-savings because the intervention did not target high-risk populations, nor was a sufficient time frame allowed to achieve savings (preventive interventions often affect health far into the future (link). Also, the scale of intervention is often too small to be efficient (link), and inaccurate generalizations are made about costs. For example, total Medicare costs of those living longer, healthier lives are not greater due to added years of life and coverage, because high medical expenses tend to occur in a limited time period prior to dying (link). Social determinants of health-focused interventions (SDOH) offer strong evidence to improve health & save health care money (link; link).
As noted, the cost-savings of prevention in healthcare depends on which strategy. Those that promote healthy behavior and environmental conditions have the greatest potential for long-term cost savings ( link; link; link; link). For example, a penny-per-ounce excise tax on sugar-sweetened beverages can help prevent many deaths over time, avoid over $17 billion in medical costs, and generate about $13 billion in annual tax revenue (link). Furthermore, cost savings are more likely when targeting high-risk individuals and providing services in certain settings. For instance, an evidence-based weight loss program targeting overweight or pre-diabetic, older adults could save over