In leading PHE’s Health Economics team it’s my job to make the economic case for public health, whether that’s providing return on investment tools for local government and the NHS, or working with national government to discuss the wider impact of prevention.
It’s vital that we continue to make this case both with the NHS and with other government departments. As we note in our latest business plan, “evidence shows that prevention and early intervention represent good value for money. Well-chosen interventions implemented at scale help avoid poor health, reduce the growth in demand on public services and support economic growth.”
Through the regular conversations we have with the NHS, local government and national government, we are regularly reminded of two things:
- Firstly, budgets must work harder and harder, year on year, inevitably leading to conversations about initiatives that provide the best value for money or even save public money.
- Secondly, there’s still work to be done to demonstrate where health economics can be applied, including de-mystifying terms like ‘ROI’, ‘cost-effectiveness’ and ‘cost-saving’ for the widest possible audience, particularly as the nature and level of health funding will continue to be a key public debate.
Are public health interventions cost-saving?
In this blog I wanted to look at a question that’s often asked; are public health interventions ‘cost-saving’? This is often taken to mean: “does the intervention deliver cashable financial savings to government budgets within the next two to five years?”
Last year I wrote a response to ‘Return on investment of public health interventions: a systematic review’, a paper which looked at this topic in depth. This concluded:
Overall, PHE supports the conclusions of this review that public health expenditure is relatively cost-effective compared with health care expenditure and that cuts to public health budgets represent a false economy.
However, these statements need to be interpreted as relating to overall social costs and benefits, including the value of long-term health benefits as well as financial savings to government budgets.
We cannot conclude from the review that most public health interventions are ‘cost-saving’ in the narrow sense of delivering short-term cashable savings to government budgets. Some interventions may be cost-saving in this way, but we cannot imply that from existing evidence.
Most of the return-on-investment (ROI) and cost-benefit analysis (CBA) studies included in the review adopted relatively long and broad societal perspectives, and few if any provided sufficiently detailed breakdowns of short-term costs and benefits to determine whether cashable savings would materialise in the short-term.
Given the obvious interest in short-term cashable savings among local government and NHS decision makers, it might be a useful recommendation that future CBA and ROI studies provide narrower, short-term, budget-focused breakdowns of this kind as well as findings from a broader longer-term societal perspective.
However, it is equally important to recognise the ethical point that the aim of public policy is not solely to achieve maximum savings to public sector budgets, but also to improve people’s health and wellbeing and reduce health inequalities.
The focus of most ROI and CBA studies is primarily to quantify the health benefits as part of an overall assessment of value for money. This latest review of evidence by Masters and colleagues is a helpful addition to the literature”.
It’s important to continue this debate about ‘cost savings’ and be clear that some interventions can lead to short-term savings, but most analysis into the return on investment of public health looks at overall social costs and benefits (and indeed, the wide range of ROI tools and resources PHE provides adopt a similar perspective). Tools like our Health Economics Evidence Resource can also help, setting out explicitly what type of economic evidence exists in relation to different areas of the public health grant.
We must also continue to be robust about the fact that short-term cost savings are a high bar to set for public health interventions – you wouldn’t for instance argue that the NHS should routinely justify investment decisions by showing where cash will be saved or released.
I look forward to keeping this conversation going in further blogs over the coming months, discussing how we can keep demonstrating that prevention is a wise investment – but at the same time not over-stating the case.