The Economic Benefits of Prevention

By Dr. Marjorie MacDonald

A common theme has emerged in the last three blogs posted on this website – that is, the need for an increased investment in prevention. Ted Bruce (March 8th) argued for a prevention agenda for addressing childhood obesity and called for a well-funded prevention effort. Trevor Hancock (March 17th) suggested we need to invest in the determinants of health through a whole of government approach because prevention will give us a bigger bang for our buck. Victoria Lee (March 25th) argued that investing in prevention is an investment in our future and provides evidence that there is a significant return on investment for every dollar spent on early learning for children.

I want to pick up on this theme and present additional evidence that prevention makes good economic sense for government investment. In fact, not investing in prevention puts our health care system at risk.  In a PHABC presentation to BC’s Select Standing Committee on Health [1] in 2012, Dr. John Millar argued that at current rates of increase, provincial health care expenditures are projected to increase from the current 40% of spending to about 80% by 2030. This leaves very little money for other essential programs that keep the province functioning and address the determinants of health.

Although there has been controversy over whether prevention will save the health care system money, there is growing evidence that many preventive interventions are cost effective.  The best evidence comes from tobacco prevention. For example, one study in California demonstrated that over 20 years, a 2.4 billion dollar investment in tobacco prevention reduced health care costs by 134 billion dollars – a $55 return for every dollar spent on prevention [2]. Studies in other states have also demonstrated a good return on investment for tobacco prevention [3]. Although heath care savings from young people quitting or not starting to smoke may not show up for many years, some savings occur almost immediately by preventing or reducing smoking among pregnant women and teens thereby lowering pregnancy and birth complication rates.

There is an emerging consensus on a core set of cost effective clinical as well as population-based prevention services that not only provide good economic value for money but yield net savings [4,5]. Cost-effective clinical prevention strategies in primary care include, for example, childhood vaccination programs, colorectal cancer screening, HIV/AIDS prevention, diabetes prevention, and smoking cessation, among others. Cost effective community services include indoor smoking bans, increased taxes on cigarettes and alcohol, immunization requirements for school entry, needle exchange programs, obesity interventions for children and adolescents, and mandatory seat belt and helmet laws.

More evidence on the economic benefits of prevention is emerging from economic modelling studies that illustrate economic returns over the long term. For example, a recent study in the US [6] tested three strategies to reduce avoidable deaths and reduce health care costs, including expanding health care coverage, delivering better clinical prevention and chronic care, and establishing healthier behavioural and environmental conditions. The first two strategies increased costs over the long term but an approach that added the 3rd strategy (i.e., a public health approach) to the first two resulted in significant cost savings to health care by year 25. This illustrates the need for governments to take the long view and to look further ahead than the end of their term in office.

With respect to public health spending, another recent US study examined whether spending increases by local public health agencies reduced mortality rates from preventable causes of death [7]. They found that a 10% increase in public health spending could result in an average 3.2% reduction in cardiovascular disease mortality which, at the population level, represents a significant decrease. By spending just $312,274 dollars more per year, the potential savings in medical care resources were significantly in excess of this amount representing a very high return on investment.

Overall, as Trevor Hancock argued, prevention is good bang for the buck and it is a kinder, gentler solution. If we can reduce overall health spending by investing in prevention, it is a ‘no brainer’ decision for governments. We must remember, however, that preventing people from getting sick also has value in human terms that go beyond economic considerations. The twin moral aims of public health are to improve the health of the population and reduce health inequities. Investing in evidence-based prevention can help us achieve those aims with the added bonus of reducing health care costs.

 –  Marjorie MacDonald is the President of the Public Health Association of BC


[1] Millar, J. (2012) Sustainability of the health care system. Presentation to the BC Select Standing Committee on Health, January 2012. Victoria, BC.

[2] Lightwood, J.M., Dinno, A. & Glantz, S.A. (2008). Effect of the California Tobacco Control Program on personal health care expenditures. PLOS Medicine 5(8): e178.

[3] Riordan, M. (2012) Comprehensive state tobacco control programs save money. Campaign for tobacco free kids.

[4] Woolf, S.H., Husten, C.G., Lewin, L.S., Marks, J.S., Fielding, J.E., Sanchez, E.J. (2009). The economic argument for disease prevention: Distinguishing between value and savings.

[5] Public Health Agency of Canada. (2009). Investing in prevention – the economic perspective. Key findings from a survey of recent evidence.

[6] Millstein, B., Homer, J., Briss, P., Burton, D., Pechacek, T.(2011). Why behavioural and environmental interventions are needed to improve health at lower cost. Health Affairs, 30(5), 823-832.

[7] Mays, G.P. & Smith, S.A. (2011). Evidence links increases in public health spending to declinces in preventable deaths. Health Affairs, 30(8), 1585-1593.