Health Care Reform Savings Overblown?

Health Care Reform Savings Overblown: American President Barack Obama has been very visible stumping for his health care reform plan. While some may argue about whether it is a grab for more government control others seem focused on clarity in medical cost issues.

Fact checkers have been pouring over details and statements made regarding the health care reform. One huge stumbling block has been Chronic Disease Management. Those in league with the President are quick to point out significant savings over the life of the patient by providing this element in a nationalized public health plan, although a government office seems to dispute the findings.

The Washington Post reported that several analysts believe that the cost of the plan (at more than $1,000 per patient per year) will actually cost the government more than traditional health programs. The Washington Post clarifies this fact in their report. “For diabetes patients, only about two-thirds of that cost would be recovered in the first decade, when fewer complications materialize, and more than three-quarters would be recovered over 25 years. Only for the youngest patients, those aged 24 to 30, would spending on preventive care wind up producing a net savings: the study calculates that $21 billion spent on younger patients would cut overall spending on their health care by $6 billion over 25 years.”

Recently an article in Health Affairs sides with aggressive chronic disease management. Pharmaceutical company Novo Nordisk Inc. paid for a study that, “Suggests that if the right programs are implemented, chronic disease management might actually be more cost-effective than some estimates suggest,” according to an article in FierceHealthFinance.



The difficulty is the Congressional Budget Office (CBO) is deriving some pessimistic figures by using one set of information while other organizations use separate data points. According to HealthCareFinanceNews, “The study’s (Novo Nordisk Inc.) authors present a new epidemiologically based model that projects federal costs for type 2 diabetes under different policy options. They argue that this model, and similar models for other chronic diseases such as heart disease, could be used to provide more accurate estimates of the long-term spending associated with diabetes treatment interventions.”

The sticking point is that the CBO looks at chronic diseases like diabetes for a period of ten years (projecting forward). Some analysts believe that timeframe is too small and should be widened to get a bigger picture that they believe would demonstrate savings.

Michael O’Grady, a senior fellow at NORC in Bethesda, Md. stated, “For many chronic illnesses, and in the case of diabetes in particular, complications from the disease may not show up for many years. Thus, cost estimates covering only 10 years may capture the up-front costs of prevention and disease management efforts but not the long-term health and economic benefits of avoiding future complications.”

It has been suggested that the CBO take a look at the cost analysis for prevention programs through a 25-year lens. This would allow a better projection on the costs related to prevention of diseases under President Obama’s health care reform plan.

Working models of this financial aspect indicate that the long-term costs of the program may, in fact, be less than the cost of current reactive care.

Independent of any health care reform medical science continues to urge Americans to watch what they eat and get enough exercise. The end result is enhanced blood glucose control and a physical condition that just feels better.