An Ounce of Prevention

20 Pages Posted: 24 Jul 2020 Last revised: 22 Oct 2021

See all articles by Joseph P. Newhouse

Joseph P. Newhouse

Harvard Medical School; Harvard Kennedy School (HKS); National Bureau of Economic Research (NBER); Harvard University - Harvard Kennedy School (HKS)

Date Written: July 2020

Abstract

I look at prevention through an economic lens and make three main points. First, those advocating preventive measures are often asked how much money a given measure saves. This question is misguided. Rather preventive measures can be thought of as insurance, with a certain cost in the present that may or may not pay off in the future. In fact, although most medical preventive measures improve expected health, they do not save money. Various lifestyle and early childhood interventions, however, may both save money and improve health. Second, preventive measures, including medical and lifestyle measures, are heterogeneous in their value, both across measures and, within measure, across individuals. As a result, generalizations in everyday discourse about the value of prevention can be overly broad. Third, health insurance coverage for medical preventive measures should generally be more extensive than coverage for the treatment of a medical condition, though full coverage of preventive services is not necessarily optimal.

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Suggested Citation

Newhouse, Joseph P., An Ounce of Prevention (July 2020). NBER Working Paper No. w27553, Available at SSRN: https://ssrn.com/abstract=3658849

Joseph P. Newhouse (Contact Author)

Harvard Medical School; Harvard Kennedy School (HKS) ( email )

Department of Health Care Policy
Boston, MA 02115
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
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Harvard University - Harvard Kennedy School (HKS) ( email )

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