Why prevention can increase health-care spending

This article examines the impact of disease prevention on health-care spending. The relationship between these two variables is more complex than what, at first glance, appears to be the case. Health-care spending would be reduced if more effective means could be found to prevent health problems that are expensive to treat but are generally not fatal, such as dementia, infectious diseases and accidents. The major focus here is on interventions designed to persuade people to quit smoking. Savings on health-care spending in early years after people stop smoking are counter-balanced (often exceeded) by higher spending at a later time. In addition, when people stop smoking there is a significant negative impact on government finances from the double effect of lost tax revenues combined with increased spending on pension payments. Arguments in favour of policies designed to prevent fatal disease, such as by reducing the prevalence of smoking, should be based on improvements to population health rather than on misleading claims that this will reduce spending on health care.