Improving Healthcare System Won't Save Money

While healthcare reform is gaining momentum (and rightly so), plenty of experts believe that improving the healthcare system will save money.

Don't believe it.

A recent USA Today piece titled, "Do smokers cost society money" suggests that smoking and dying earlier saves the healthcare system and other benefit programs. It may be that healthier individuals living longer, and consequently having the opportunity to have more chronic illnesses like diabetes and cancer, cost more.

From the article -

• Smoking takes years off your life and adds dollars to the cost of health care. Yet nonsmokers cost society money, too — by living longer.
• smokers die some 10 years earlier than nonsmokers, according to the CDC, and those premature deaths provide a savings to Medicare, Social Security, private pensions and other programs.
• A Dutch study published last year in the Public Library of Science Medicine journal said that health care costs for smokers were about $326,000 from age 20 on, compared to about $417,000 for thin and healthy people. The reason: The thin, healthy people lived much longer.

This is something I've always thought was a possibility. It makes some intuitive sense. Back in the 1950s, if a man died of a heart attack that would be the only cost to the healthcare system. Now as people live longer as we know better on what we must do to stay healthy and well, then they have more opportunities to not only become ill, but also injured, as well as need surgery for joint replacements, etc.

The additional wrinkle is that even the smoker now is likely to survive what was a fatal heart attack a generation ago, presumably quit smoking and also develop illnesses that can't be current, but controlled with a dizzying array of medications.

Why is this important? Healthcare reformers keep talking about cost savings to the system which isn't likely. Instead of claiming huge savings, we should be talking on how better to shift costs from expensive medical expenses like emergency room care and hospitalization for an uninsured patient with a heart attack to providing affordable health insurnace to the person to completely avoid the heart attack.

The healthcare system will still cost employers and the government a lot of money. We as a nation shouldn't expect savings from requiring doctors and hospitals to have electronic medical records (which is the right thing to do) or other touted improvements despite what the experts tell us. The irony and curse of our healthcare system is if we are as good at preventing premature death, by definition we are extending life and the likelihood of more healthcare costs for individuals saved. Can't argue with more time with family and friends.

So be cynical about stories that fixing the healthcare system will save money. It won't. What is far more important is given the amount of money we spend can we ensure it is wisely spent so all of us have the potential to live productive healthy lives?