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Old 30th January 2017, 08:12 AM   #392
ponderingturtle
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Originally Posted by Emily's Cat View Post
[actuarial lecture]

Actually, preventive care is only less expensive when you're looking post-hoc at a person who contracted the condition. That is to say, the cost of a colonoscopy is less than the cost of chemotherapy and surgery for colon cancer. The problem is in the aggregations, and colonoscopies are a really good example.

These are made up numbers - I don't have real numbers easily accessible without having to do a lot of work AND there's a degree of confidentiality involved. The made up numbers are illustrative and directionally appropriate. appropriate.

Let's say that an average colonoscopy costs $250, and is recommended to all men age 50 and older, every 5 years. That equates to about 20% of men in that age range per year. Let's say that works out to 10,000 men in that risk pool. So that's a cost of $2,500,000 per year in colonoscopy costs.

Let's say colon cancer has an incident rate of 1 in 100,000. If colon cancer is identified early, it costs $250,000 to treat. If it is not identified early, it has a cost of $500,000 to treat. For the moment, we're going to ignore the survival rates - they add a high degree of computational complexity that is irrelevant to the pint I'm demonstrating.

The expected cost of early-diagnosis colon cancer treatment in a group that is all receiving preventive care is (incidence rate) * (number of people) * (cost to treat) = (1/100,000) * (10,000) * ($250,000) = $25,000.

The expected cost of late-diagnosis colon cancer treatment us (1/100,000) * (10,000) * ($500,000) = $50,000.

So even though the cost to treat is much higher than the cost to screen for an individual who is identified with colon cancer... the cost to screen everyone is massively higher.

Most preventive care is covered by insurers as goodwill. It's expected, it's the right thing to do, and it makes policyholders feel safer. But it's very rarely financially sound.

Childhood vaccinations, flu shots, and a handful of other immunizations are an exception. These are things that actually *prevent* an illness, and are generally low-cost to administer. Most of the other things that we call "preventive care" don't prevent anything, they're just early detection... and they're often not at all cost-effective.

[/actuarial lecture]
Exactly killing people is far more profitable, but by their good graces they refrain from doing that too much.
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