https://publichealthmatters.blog.gov.uk/2016/03/07/investing-in-prevention-counting-the-cost/

Investing in prevention: counting the cost

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As budgets continue to tighten across the NHS and local government, it’s vital that we make the case for investment in prevention and early intervention.

In my second blog in this four-part series, I argued that public health and prevention measures are cost-effective, but that we must be prepared to accept that the return on investment is likely to be medium-to long-term.

This third blog will address the issue of cost savings. We’re often asked whether investing in prevention will ‘save’ money – for the NHS, for the broader health and social care system, for local government or for wider society, including employers.

It is very important to note that the NHS does not routinely have to justify investment decisions by demonstrating where costs will be saved, or cash released in the treatment system, yet this is potentially the bar being set for preventive activity.

We need to apply the economic principle of opportunity cost when making investment decisions: the notion that by making the choice to invest in one option, you lose the opportunity of investing in the next best alternative. So even if undertaking a certain preventive activity does not save money, it is still quite possible to argue that this remains an efficient use of resources – if it can be demonstrated that this will achieve a better outcome than the next best alternative use of resources.

For example, much of the evidence demonstrates that improving awareness and early diagnosis of cancers is a cost-effective thing to do, but it may not be cost-saving in the long run. Similarly, few people would argue that stopping children from becoming overweight is not the right thing to do, rather than treating the morbidly obese with gastric surgery – even if in the short term there were no cashable savings from doing so.

Still, we know that cost savings are desirable, given the pressures on budgets, so how can we develop a useful approach to harness the potential of public health interventions to save cash or resources?

Returning to the diabetes example from my last blog, imagine a world where we had identified all those at risk of diabetes and we had largely prevented those people from developing the condition. Would this save money?

To answer this question we have to return to economic basics and understand what types of cost are under consideration; for this example we can largely simplify these to capital (hospitals and diagnostic equipment, for example) and labour.

Not having to treat all the complications of diabetes is unlikely to save us the cost of employing diabetologists or surgeons, or the cost of running those services within the hospital sector. The most likely scenario is that the vast majority of resources will simply be re-deployed to deal with other service pressures or conditions, therefore the cash will not be released.

Yet what might be feasible in our diabetes example is that the clinicians involved could be re-deployed into primary and community-based services, possibly leading to lower average costs of care over time within a different service model. We can learn lessons here from other areas such as mental health, where we have already seen a shift from a model of institutional-based care to community-based models of delivery.  This will almost certainly have achieved system efficiencies and released resources over time, even if an element of ‘double-running’ costs was needed to move from one delivery model to the other.

Given the financial challenge facing the NHS and the health and social care system, a call for double-running costs may be treated with derision. But radical problems require radical solutions.

However, we have to be candid about some of the financial and budgetary implications of upscaling prevention. For example, there is a need to identify resources to invest in prevention activity to stop people from becoming overweight, yet a significant proportion of funding is still tied up in treatment for obesity.

Or take the diabetes example above. A shift to a community-based model could lower costs, but building up a new model of service delivery will incur an element of ‘double-running costs’.

Given the financial challenge facing the NHS and the health and social care system, a call for double-running costs may be treated with derision. But radical problems require radical solutions. The LGA’s recent call for a public health ‘transformation fund’ is built on this very principle, and it merits serious consideration.

The risk is that the health care system carries on with business as usual and any new resources are devoted to dealing with acute sector pressures – with no real change to the pattern of investment.

As well as understanding the value of long-term benefits over short-term gain, we must start to measure prevention and treatment by equal standards. Rather than trying to look for immediate cost-savings, we should look at the long-term gains that could be achieved by investing in preventive activity and new models of delivery.

Where there are cost implications, we must look at how we can shoulder these across the wider system to ensure that investment is shared by those that will benefit. This will be examined in more detail in the fourth and final blog in this series.

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