[Congressional Record Volume 141, Number 186 (Monday, November 20, 1995)]
[Senate]
[Page S17510]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




              AN OUNCE OF PREVENTION AS COSTLY AS THE CURE

 Mr. SIMON. Mr. President, Henry Aaron, a respected economist at the 
Brookings Institution, and Prof. William B. Schwartz who teaches 
medicine at the University of Southern California, had an op-ed piece 
in the Washington Post commenting about what is driving up health care 
costs.
  It is a solid piece of information when too often we are looking for 
superficial answers that may temporarily help the budget situation.
  I have said for many years that the Federal Government has to look to 
additional revenue sources if we are to provide the fundamental 
services that our people want and deserve.
  Nothing that I have seen has changed my mind on that.
  Our inattention to our revenue problems has caused an escalation of 
the deficit in this country; and it has caused expenditures of huge 
amounts of money for interest, in addition to discouraging industrial 
investment.
  The Henry Aaron-William Schwartz article talks about realities in the 
medical field, realities we seem reluctant to face but I hope will.
  I ask that their op-ed piece be printed in the Record.
  The material follows:

               [From The Washington Post, Nov. 16, 1995]

              An Ounce of Prevention as Costly as the Cure

              (By Henry J. Aaron and William B. Schwartz)

       On the op-ed page of Oct. 25, Joseph Califano and Robert 
     Samuelson independently comment on solutions to the excessive 
     level and growth of health care spending. Califano invokes 
     prevention as the long-term solution. Samuelson points to 
     managed care, although he prudently warns of possible abuse 
     by profit-hungry managers. Both miss the simple truth--that 
     any sustained slowdown in the growth of health care spending 
     will require health care rationing.
       Contrary to popular belief, the principal causes of rising 
     health care spending are not waste, fraud and abuse, an aging 
     population or increasingly unhealthful behavior. Waste, fraud 
     and abuse can account at most for about one-tenth of the 
     increase in spending over the past two decades. Aging has 
     been an even smaller factor, although its importance will 
     grow. And people have been eating more healthfully, 
     exercising more and smoking less than in the past.
       The primary force driving up health care spending is the 
     proliferation of new health care technology. Scientific 
     advance accounts for at least half and probably more of the 
     120 percent growth in real per capita health spending that 
     has occurred since 1975. There is no indication that the pace 
     of scientific advance is slowing or will slow. It may be 
     accelerating. And population aging will not stop for decades.
       It would be nice if investing in preventive care could 
     significantly slow the growth of health spending. Alas, it 
     cannot, for two related reasons. First, with few exceptions 
     (vaccinations stand out), most preventive health measures 
     must be applied to large populations to prevent a relatively 
     small amount of illness.
       Take screening for colon cancer, which kills about 50,000 
     people annually at a treatment cost of about $1 billion. 
     Deaths from colon cancer could be cut by 20,000 annually if 
     all people age 50 and over were tested annually for blood in 
     their feces and all those who tested positive underwent a 
     colonoscopy. That sounds like a strong case for preventive 
     colonoscopies. And indeed it is--on grounds of public health. 
     But the added cost of the preventive tests would run $4 
     billion to $6 billion annually, depending on how aggressively 
     patients with benign polyps were treated subsequently. This 
     example illustrates a more general point: Some preventive 
     health measures are good for health, but they seldom cut 
     costs.
       The same is true of substance abuse. Califano would like to 
     reduce it. So would most of the rest of us. But measures to 
     reduce substance abuse are costly and have few short-run 
     effects on behavior. They may eventually induce less abuse or 
     better diet, but these changes do not come quickly.
       Meanwhile, the second reason prevention does not save money 
     comes into play. It may be possible, at a price, to reduce 
     particular forms of illness. But all of us who survive life's 
     other hazards will one day sicken and die. Smokers spared 
     coronaries and alcoholics spared cirrhosis will eventually 
     get sick and consume health care. The ghoulish fact is that 
     many people who are spared cheap death from a tobacco-induced 
     coronary will eventually succumb to costly debility from 
     Alzheimer's.
       Treatment for degenerative diseases such as Alzheimer's, 
     arthritis and miscellaneous organ failures will eat up much 
     of the savings achieved through preventive measures and could 
     end up costing more than any direct savings achieved through 
     prevention campaigns. The offset will not be exact. Some 
     money may be saved. Stopping smoking does cut health costs, 
     but only modestly. In other cases, some net costs may be 
     incurred. But the idea that prevention will materially divert 
     the health cost juggernaut is fantasy.
       Samuelson is right to remark on the importance of the 
     managed care revolution. He is properly worried about the 
     effects of an infusion of profit-oriented managed care plans 
     on the quality of care. But he is too credulous about the 
     achievements of managed care in slowing the growth of health 
     care spending.
       Yes, health care spending slowed in California during the 
     1980s as managed care plans spread. But education spending 
     also slowed as California fell from 22nd in the nation in 
     1979-80 to 33rd in 1991-92. California experienced a 
     protracted recession during the 1980s. Recessions produce 
     unemployment and reduce incomes. Both cause growth of 
     spending of all kinds to slow.
       Samuelson is right that some companies have stopped growth 
     of health insurance premiums by shifting to managed care. But 
     that slowdown could come from reductions in benefits, 
     increased cost-sharing and cost-shifting to other payers 
     through negotiated discounts, as well as from genuine 
     increases in efficiency. Despite the vaunted achievements of 
     managed care, inflation-adjusted health care spending grew 5 
     percent in the past year, the same as the average for the 
     past four decades.
       Maybe managed care will do better in the future than it has 
     in the past. But if 70 percent of all those privately insured 
     already have managed care, as Samuelson reports, one should 
     hesitate before cracking open the champagne in celebration of 
     victory over rising health costs.
       Managed care may eventually succeed in saving money by 
     squeezing out waste, but it will have to save enough to pay 
     for the extra administrative costs it generates. Much waste 
     has been squeezed out already. Hospital days have fallen by 
     one-third since 1984. And waste can only be squeezed out 
     once. After it is gone, the same forces that have been 
     driving up health care costs--technology and aging--will 
     reassert themselves.
       A sustained slowdown in health care spending can be 
     achieved in only one way: by denying some beneficial services 
     to some people. People have been reluctant to repose such 
     power in government bureaucrats, who have nothing personal to 
     gain from the decisions they make. One wonders whether they 
     will be more willing to cede such sensitive authority to 
     well-paid managed care executives who make larger profits 
     every time they decide some procedure is not worth what it 
     costs them.

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