Thanks to preventive medicine, older Americans have healthier hearts. Which also means, incidentally, that federal budgets are healthier, too.
At the turn of the millennium, health spending growth was spiraling out of control. Economists projected that the already ginormous health-care sector would soon gobble up monster portions of the federal budget and the entire economy. But something strange happened over the past decade and a half.
That’s true whether we’re talking about public- or private-sector health spending; for Medicare, Medicaid, private insurance and out-of-pocket spending, annual outlays have been way lower than the doomsday forecasters anticipated. Curiously, too, the sharpest slowdown has occurred with Medicare.
In fact, about three-quarters of the health spending slowdown nationwide was due to slow-as-an-(almost)-trickle growth in spending on the elderly. From 1992 to 2004, per-capita spending among Medicare beneficiaries grew by 3.8 percent each year, adjusted for economy-wide inflation; since 2005, the rate has been a mere 1.1 percent, according to a new Health Affairs study.
In plain English, that means total spending per elderly person hasn’t fallen, per se, but we’re spending thousands of dollars less today than was projected to be the case back in the early 2000s.
So who gets credit?
Some have attributed the spending slowdown to lousy economic conditions, although in retrospect the timing isn’t exactly right. The deceleration appears to have begun before the Great Recession, and it continued long after it ended. What’s more, Medicare spending should be relatively shielded from the business cycle, at least relative to the private sector.
Some have credited structural changes to the health-care system, including some of Obamacare’s cost-control measures. Maybe bundled payments and accountable care organizations are responsible — though studies so far suggest their effects have been modest compared with the magnitude of the overall changes in health spending trends. What’s more, the slowdown pre-dates Obamacare.
The study, from a team of researchers led by Harvard economics professor David M. Cutler, focuses specifically on medical spending for the elderly. The authors began by disaggregating spending into categories, based on the condition a patient was being treated for — cancer, dementia and so on.
They noticed something striking. The categories with far and away the biggest slowdown in spending were related to heart health. Spending on cardiovascular and cerebrovascular diseases (heart attack, cardiac arrest, stroke, etc.) declined by $827 per person, relative to earlier trends. Spending on a related category called cardiovascular risk factors (high blood pressure, high cholesterol, diabetes) also fell $802 per person below the trend line.
Altogether, the researchers calculated that more than half of the elderly spending slowdown was because of slower spending on cardiovascular diseases and conditions. In dollar terms, this means the slowdown in cardiovascular spending growth effectively saved the Medicare program about $34 billion in 2012 (the most recent year of data available).
You can see similar results in other health stats. Elderly death rates for cardiovascular diseases, for instance, have plummeted, according to data from the Centers for Disease Control and Prevention.
These are significant findings, with major policy implications.
The conventional wisdom among health policy experts has long been that preventive medicine does not save money. It has other virtues — including, well, making people healthier. That’s quite a good thing! But study after study has found that in dollar terms, at least, investing more in preventive care doesn’t pay off.
This new paper suggests that at least when it comes to heart health, that’s not the case.
Lower-than-expected cardiovascular spending appears to be primarily due to successful use of preventive measures, the authors find. Greater use of statins, anti-hypertensives, diabetes medications and aspirin has helped prevent lots of expensive health events and contributed to outright declines in hospital admissions for heart disease and stroke.
“We think that half of the reduction in cardiovascular cost growth is a result of more people taking medications and taking them more regularly,” Cutler said.
Why are people taking their meds more regularly? The authors don’t know for sure, but there are a few possibilities. There’s more awareness of the need for treatment, for one. But also, a bunch of existing drugs went off patent and got cheaper. And in 2006, we got Medicare Part D, which reduced out-of-pocket prescription costs for many older people and probably led to more compliance.
Whether policymakers can duplicate these results for other health conditions and preventive therapies remains to be seen. But as the country debates the fiscal and moral merits of expanding health coverage, these latest findings are useful — and heartening? — data points.