The economic implications of preventive health care

Abstract

Today's cost-conscious political environment subjects the economic implications of proposed health care expenditures to careful scrutiny. This paper examines both the logic of and the evidence on preventive health care activities' ability to serve the objective of health cost containment. Following a brief introduction to benefit-cost analysis, the paper presents a prevention activity classification schema intended to clarify distinctions among the modalities of prevention and to differentiate activities with significant cost-containment potential from those which seem to offer less potential. Empirical evidence supports the conventional wisdom that primary prevention activities are frequently cost-effective, particularly when the recipient's role is relatively passive (e.g. receiving an immunization) and when the prevention measure is a public good delivered to an entire community (e.g. water fluoridation). The existing success of such traditional public health measures suggests that future prevention opportunities may lie in nontraditional activities which violate “rules” of effective health care delivery or communication of prevention information. For example, the broadcast media may prove to be a cost-effective vehicle for health education, despite the impersonal character of the media and the required “activation” of the viewer/listener.

Whatever prevention's long-run cost-containment potential might be, the near-term outlook for support of prevention activities is clouded by the budgetary myopia of the political system, the lack of a vocal constituency for prevention, and a limited base of solid understanding of the health and economic consequences of numerous prevention measures.