David Leonhardt has written a fantastic article in the New York Times that addresses the contention that government-run universal health care somehow \”saves\” money. Although Leonhart is open to the idea of cost savings in some circumstances, he says:

The theory goes like this: By practicing preventive medicine, doctors can keep many people from getting sick in the first place. Those who do end up with a chronic illness will be closely tracked so that fewer of them develop complications. These steps will result in less illness, which in turn will require less health care. With the savings, the country can then lower its medical bills or provide health insurance for the 40-odd million people who lack it – or maybe even both.


No one really knows whether preventive medicine will save money in the long run, let alone free up the billions of dollars a year needed to help pay for universal health insurance. In fact, studies have shown that preventive care – be it cancer screening, smoking cessation or plain old checkups – usually ends up costing money. It makes people healthier, but it\’s not free.

\”It\’s a nice thing to think, and it seems like it should be true, but I don\’t know of any evidence that preventive care actually saves money,\” said Jonathan Gruber, an M.I.T. economist who helped design the universal-coverage plan in Massachusetts.

This is a tough idea to swallow because better health really does seem as if it should lead to lower medical bills. Indeed, if it were somehow possible to wave a wand and turn people into thin nonsmokers who remembered to take their statins, this country\’s health care expenses would fall.


Jay Bhattacharya, a doctor and economist at Stanford\’s School of Medicine, estimates that to prevent one new case of diabetes, an antiobesity program must treat five people -not cheaply, he says. Along the same lines, Mr. Gruber found that when retirees in California began visiting their doctor less often and filling fewer prescriptions, overall medical spending fell. People did get sick more often, but treating their illnesses was still less costly than widespread basic care – in the form of doctors visits and drugs. Louise Russell, an economist at Rutgers, points out that programs that focus on at-risk patients cost the least, but even they are rarely free.

The idea that savings can be realized with a government takeover of health care is a central component of the \”Healthy Wisconsin\” plan currently before the Legislature.  The notion that somehow all these cost savings are going to materialize once government takes over health care is far-fetched, as they rely on people fundamentally changing their behavior to reduce hospital visits in the future.  In fact, providing government health care for everyone may have the exact opposite effect, since individuals may begin to over-utilize the system for minor health problems.