August 10, 2009

(Update) The Curious Case of the Misleading CBO Letter

So, the CBO responded to questions from the House Energy and Commerce Committee about the CBO's evaluation of the cost-saving effects, or lack thereof, of preventive medical care and wellness services, with a lengthy, somewhat involved letter that began thusly:

August 7, 2009

Honorable Nathan Deal
Ranking Member
Subcommittee on Health
Committee on Energy and Commerce
U.S. House of Representatives
Washington, DC 20515

Dear Congressman:

This letter responds to the question you asked at a July 16, 2009, committee markup concerning the Congressional Budget Office’s (CBO’s) analysis of the budgetary effects of proposals to expand governmental support for preventive medical care and wellness services. Specifically, you asked whether the agency’s scoring methods reflect potential reductions in federal costs from improvements in health that might result from expanded support for those activities.1

Preventive Medical Care
Preventive medical care includes services such as cancer screening, cholesterol management, and vaccines. In making its estimates of the budgetary effects of expanded governmental support for preventive care, CBO takes into account any estimated savings that would result from greater use of such care as well as the estimated costs of that additional care. Although different types of preventive care have different effects on spending, the evidence suggests that for most preventive services, expanded utilization leads to higher, not lower, medical spending overall.

That result may seem counterintuitive. For example, many observers point to cases in which a simple medical test, if given early enough, can reveal a condition that is treatable at a fraction of the cost of treating that same illness after it has progressed. In such cases, an ounce of prevention improves health and reduces spending—for that individual. But when analyzing the effects of preventive care on total spending for health care, it is important to recognize that doctors do not know beforehand which patients are going to develop costly illnesses. To avert one case of acute illness, it is usually necessary to provide preventive care to many patients, most of whom would not have suffered that illness anyway. Even when the unit cost of a particular preventive service is low, costs can accumulate quickly when a large number of patients are treated preventively. Judging the overall effect on medical spending requires analysts to calculate not just the savings from the relatively few individuals who would avoid more expensive treatment later, but also the costs for the many who would make greater use of preventive care.2 As a result, preventive care can have the largest benefits relative to costs when it is targeted at people who are most likely to suffer from a particular medical problem; however, such targeting can be difficult because preventive services are generally provided to patients who have the potential to contract a given disease but have not yet shown symptoms of having it....

Ok, if you're still with us, by this time I think most people would think reasonably that they have gotten the drift of this letter. Looking a bit further along, evidently the CBO is just going to lay out more and more about why preventive care will cost more than it saves, more or less.

Or perhaps, at least having waded this far into the dense, 7-page letter, one might reasonably conclude one could skim a bit and skip to near the end for any more summary stuff. At the end, the letter discouragingly bogs the reader down into budget scorekeeping arcana. Skimming backwards, one then could examine the end of the section on Preventive Medical Care:

In sum, expanded governmental support for preventive medical care would probably improve people’s health but would not generally reduce total spending on health care. However, government funding for some specific types of preventive care might lower total spending.

From this, how could anyone fault headlines such as these below which flowed from this letter?

Expanding Preventive Care May Add to Costs, CBO Says
Letter Cites Health Benefits but Few Savings --
Washington Post

Congressional Budget Expert Says Preventive Care Will Raise -- Not Cut -- Costs -- ABCNews

The only problem is....the headlines are pretty much asserting the opposite of what you should conclude if you work painfully through the CBO letter in full, carefully, and read the most significant of its source references, carefully.


Reading the entire CBO letter, plowing through it's carefully precise prose, one finally happens upon an accurate, summary-type statement near the top of the 3rd page which should have been an emphasized part of the general summary statement for the entire Preventive Medical Care section:

Treatments for existing medical conditions range from those that save money to those that cost money in much the same way that preventive services do: About 20 percent save money, and about 60 percent have costs that many consider reasonable relative to their benefits, according to the study cited above. Thus, not only preventive services but medical services more generally could be evaluated in order to encourage high-value services of both types and discourage low-value ones.

Somehow, this doesn't appear to suggest Preventive Care must cost more than it saves, even by the narrow measure of medical costs only, does it?

The only question is whether the sentences of the CBO letter, each one accurate in itself, should have been arranged differently.

I think so.

Let me suggest a summary statement that accurately conveys the substance available from the CBO regarding Preventive Medical Care.

Let's just reword the CBO summary statement to reflect the information and references the CBO itself offers in the letter:

In sum, expanded governmental support for preventive medical care would improve people’s health but would not generally reduce total spending on health care itself unless targeted specifically at the cost-saving and most cost-effective preventive care only, as determined by research such as in the references in this letter. In this way, government funding for some specific types of preventive care could clearly lower total health care spending.

There, that's better now, don't you think?

At least it conveys the content the CBO found.

If I were an news editor, I'd then require a more accurate headline also:

Expanding Preventive Care Could Add to Costs or Cut Costs, CBO Says
Letter Cites Health Benefits and Says Savings Require Emphasizing Cost-Saving Care -- Finding the Dream Blog


Update 8-26

The NYTimes has a new op-ed piece on the inability of the CBO to estimate medical savings from reforms.

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