Saving $2.2 trillion annually? It's possible with proactive health focus, Deloitte says
Moving to disease prevention and other steps to keep people healthy could save trillions of dollars and help preserve Medicare, according to a new report by Deloitte.
The U.S. healthcare system could save $2.2 trillion annually by 2040 if there’s a greater focus on disease prevention and keeping people healthy, according to a new analysis by Deloitte.
Put another way, individual health care costs for Americans would drop by $7,000, from $23,000 to $16,000, with a shift to preventive care, Deloitte projects. The analysis was released Monday morning.
The Deloitte analysis says more people would be living, and living healthier lives, with a prevention-focused approach as opposed to a system that focuses on treating illnesses.
Andrew Davis, a principal at Deloitte and co-author of the report, says “our eyes got a little bit big” when researchers came up with the estimate of $2.2 trillion in annual savings.
“It was surprising,” he tells Chief Healthcare Executive®. “I think we've been on a journey for a while, but didn't realize how big that number would be.”
The analysis suggests that a more proactive health strategy could also help protect Medicare in the long run. Medicare could save more than $500 billion annually on medical and prescription drug claims, according to the Deloitte analysis.
On its current trajectory, Medicaid spending could reach $1.8 trillion by 2031, more than double its spending in 2023 ($848 billion).
“Through the investment into prevention and early detection, we can really create a program that balances out and has less cost in it, and hopefully it creates a program that's more sustainable,” Davis says. “I'll say that I want not only my parents to have access to that program, but for myself to be covered, for my two daughters to be covered.”
(See part of our conversation in this video. The story continues below.)
Deloitte analyzed medical and drug spending covering 59 million people in its analysis, and projected spending trends for a host of different illnesses and conditions. They also compared spending at current trends versus changes in policies that are aimed at promoting health and helping people manage conditions before they become more serious.
The authors suggest a greater return on investments to promoting health and managing conditions, compared to treating individuals with advanced state of diseases and helping them recover.
With a more proactive approach, spending on cancer, projected to reach nearly $1.1 trillion in 2040, would instead be $651 billion, Deloitte projects. Heart disease spending, on track to rise to $509 billion by 2040, would instead by $338 billion with a strategy aimed at maintaining health.
Davis points to other studies that show the value and savings that can be achieved by helping people avoid cardiovascular disease, or at least delay it. He talks about the “compression of disease and morbidity.”
“The costs that accumulate are actually less because they were able to stave off that cardiovascular disease for a longer period of their life,” Davis says.
Likewise, earlier detections of cancer can help people stay healthier, and drive down spending.
“If you can either prevent it or get in front of it, the amount of health span you gain is pretty significant,” he says.
In Deloitte’s analysis, 35 million more Americans would be living with a more prevention-centered healthcare system, compared to current trends, Davis says. Even with more people with longer lifespans, the analysis suggests U.S. healthcare costs would drop with a more proactive strategy, he says.
Davis says placing a higher priority on disease prevention isn’t going to just lengthen the lifespan of Americans.
Deloitte’s analysis also focuses on the value of Americans having more “healthy years.”
“You can live longer, live healthier,” he says.
“There are so many different ways that you can get in front of disease,” Davis says. “Lifestyles are a really critical component of being able to do that, because you want to be able to manage that beforehand,” he says.
Diabetes is another disease that, when managed effectively, can help people stay healthier for longer periods of time, he notes.
For those with diabetes or other chronic diseases, successfully managing the condition and avoiding more serious complications will lead to significant savings.
“Even if you have a chronic condition today, progressing to avoid the second or the third one is still a huge cost saver,” Davis says.
Primary care physicians can obviously play a critical part in helping people stay healthy and detect problems at an early stage. Davis points to the value of primary care doctors in a more prevention-focused system, but also cited other avenues, such as health coaching.
“Whether that's through primary care, whether that's through coaching, I think that can come in a lot of forms, but I do think we need a different way to engage the consumer,” Davis says, adding, “How do they engage in a different way that allows a consumer to start to embrace their health before they're sick?”
There are other factors that must be addressed to keeping Americans healthy. Too many Americans don’t have access to healthy foods, with many in cities and in rural communities lacking easy access to a supermarket. And Davis says there will need to be some social investment to help people get access to healthier foods.
“It is a complex thing, saying people should be able to eat healthy … for the average consumer, they may have some of the choices that they can make themselves, or the disposable income to do that. Not everyone has that,” he says.
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