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What’s the value of a healthy American?

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Image by Irina Logra from Pixabay 

Answer: Half a million dollars!

We all know that preventing disease is the best way to reduce healthcare costs, so I thought it would be interesting to estimate the cost savings created by a person who manages to avoid preventible disease for the large part of their life.

Total healthcare spend was $3.5t in 2017 according to the CDC. Of this, 75% was spent to treat preventible health issues.  So that’s about $2.62t in health spend caused by preventible health issues. [Meanwhile only 6% of health spend was targeted on prevention – the rest was all spent on treatment.]. Which is of course one of the root causes of out of control health expenditure epidemic we currently experience.

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There were 287m adults in the United States in 2017, of which 60% were living with one or more chronic conditions – which gives us 172m adults living with chronic disease. The annual cost per adult of preventible disease is therefore $15,250.

Assuming the average age of diagnosis is 45 and disease could be potentially prevented until a few years before mortality (78.7 is current life expectancy in the US) — so let’s say that’s 30 extra years of healthy living, the total healthcare savings is $457,508 over a person’s lifetime. And given that healthcare costs are growing at 4-5% per annum, this is just over half a million dollars as of 2019.

So every American we can help prevent disease reduces healthcare expenditure by $15k per annum and half a million over their lifetime. Over two-thirds of this healthcare expenditure is paid for either by government (federal, state, local) or by individuals (insurance premiums and out of pocket expenditure).

Therefore every individual who stays healthy benefits all of us – via lower taxes and lower insurance premiums. But little of that $15k annual savings from staying healthy returns to the individuals who do – therefore there isn’t a strong incentive to invest in it.

What if we could create a mechanism to provide a payback for prevention — firstly by accurately measure the most important measure of preventive health and secondly rewarding individuals based on their preventive health status? This would be a win for everyone. Love to hear feedback via the comments below.

Interested in earning a monetary reward for prevention? Sign-up here to stay in touch.


 

 

 

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