Most healthcare costs are at the end of our life, and we all die and often spend all we have, so the costs are fairly invariant i.e. you can never “save” $2k.
The ROI for better health is very odd to measure.
If you use dollars (for an economy) then the best ROI is to spend nothing once someone is of no economic benefit (i.e. the vast majority of healthcare spending is on the elderly and provides no dollar benefit to society, so economically most healthcare spending should be drastically cut).
You could also look at an integral of quality of life over time. However “past me” is really bad at caring about “future me”, and “current me” doesn’t care at all about optimising for “past me”.
Most people seem happy to argue that the amount that society should spend on them (or their loved ones) for health services is infinite (you can’t put a price on life), and the amount they should spend on the health services for others should be zero (those scabs should have made better life choices!)
Good luck trying to make sense out of spending $20 to save $2000!
My ROI argument is approximately that allocating $200 for health watches for everyone AND cutting $2,000 across the board everywhere else in healthcare would lead to the same health outcomes.
It's a good point about how the cost of healthcare is unevenly distributed toward the end of life. I really like the newish term "Healthy Life Expectancy".
> ROI argument is approximately that allocating $200 for health watches for everyone AND cutting $2,000 across the board everywhere else in healthcare
That sounds a lot like taking $2000 from an elderly cohort (where savings today would mostly come from), and spending $200 on a younger cohort (who would eventually get the $2000 health gains!).
Your statement needs far more qualification on who would pay the costs, and who would get the accrued benefits. And even if you make it fair, people would still complain because I think we are mostly hopeless at understanding past costs versus future savings/benefits (both individually and as a society.)
The gist of what I got from the post you're replying to, which I agree wasn't well fleshed out, is this:
If everyone gets a $200 smart watch, and 1/10th of those people avoid obesity, we can avoid $20,000 a year in diabetic care and heart surgery and hip replacement for them when they get to be 60.
Completely made up numbers of course, but speaking as one smartwatch wearer, the nudges built into the system play a significant role in keeping me heading to the gym.
It doesn't follow that we'd get the same effect if everyone wore one! But there's something to the case they're making.
> $200 smart watch, and 1/10th of those people avoid obesity, we can avoid $20,000 a year
Oh, I completely agree that that is a realistic and worthwhile scenario.
I just think that lifetime health costs in dollars do not decrease.
Let’s say we get 1/10th less diabetes due to subsidised watches. The total number of people with chronic diseases remains constant because we just get a different chronic disease on average (because we all die of something!). So the $2000 saved is just spent elsewhere. Ignoring potential savings we could make by increasing the number of sudden deaths and decreasing chronic conditions.
Or from another angle, at an individual level many spend all they have on their final healthcare costs so our individual spending remains the same, and at a government level total healthcare spending mostly remains constant regardless of health improvements or lack thereof (e.g. we spend close to 0% on polio these days – however healthcare costs didn’t decline and instead other health costs substituted instead).
Now, quality and length of life may improve, but total spending has not changed. I suspect I lack the economic language for talking about situations where we need to optimise for cost substitutions and quality of life. I do believe that optimisation of healthcare for an economy just using dollars as inputs to the objective function would fail us miserably.
I find it really hard to think about healthcare costs, because it just doesn’t work like my intuitions might expect about saving money.
Edit: the original post “U.S. per capita healthcare spending is $11,172. If the U.S. gave everyone a $200 a year tax credit to spend on a smart health watch, we'd probably save $2,000 a year per capita and get a 10x ROI.”. I believe U.S. per capita p.a. healthcare spending would now be $11,372 (the extra $200 couldn’t be found in the budget, and the amount spent on diabetes did not decrease, the total budget was not decreased.) However people have a better QOL, and are living longer so they are better off, but the economy is worse off because we’ve added years of extra cost to support the longer-living elderly!
I'm with you on this one: my intuition on the subject is screwy and I don't trust it.
Some people spend the last ten or twenty years of their life in and out of the hospital, and some just fall over from an aneurysm after otherwise perfect health. Obesity (really type II diabetes, which morbid obesity pretty much guarantees) really pushes people into the first camp.
But sure, a smart watch won't keep cancer from metastasizing, and staying out of the obesity BMI band only decreases lifetime cancer risk, doesn't eliminate it by any means.
> and staying out of the obesity BMI band only decreases lifetime cancer risk
Three times as many people die from cancer now than in 1900!
Our percentage risk of dying from cancer decreases significantly after about 65 - but only because because heart disease and mental health issues become so deadly: https://flowingdata.com/2016/01/05/causes-of-death/
A mite morbid topic, but interesting to me because the facts seem so contrary to my intuitions. PS: I am not a specialist in the topic, the above is just from a quick google.
> Three times as many people die from cancer now than in 1900!
I usually look at that as "today's medicine is advanced enough to keep us alive until we get a cancer". Keep in mind that research on antibiotics only started about in 1928...
The ROI for better health is very odd to measure.
If you use dollars (for an economy) then the best ROI is to spend nothing once someone is of no economic benefit (i.e. the vast majority of healthcare spending is on the elderly and provides no dollar benefit to society, so economically most healthcare spending should be drastically cut).
You could also look at an integral of quality of life over time. However “past me” is really bad at caring about “future me”, and “current me” doesn’t care at all about optimising for “past me”.
Most people seem happy to argue that the amount that society should spend on them (or their loved ones) for health services is infinite (you can’t put a price on life), and the amount they should spend on the health services for others should be zero (those scabs should have made better life choices!)
Good luck trying to make sense out of spending $20 to save $2000!