Paying for Sovaldi, and paying for prevention in general

The many posts on Sovaldi, including those by Allan, Bill, and the Upshot piece by Margot, all make me want to make a larger point about paying for prevention in general. The financial argument for Sovaldi is straightforward. We pay what seems like a lot of money right now, because we will save a lot more money in the future.

That’s the same argument we often hear about prevention, when it’s pitched as a financial good.

The problem there is that the costs and the savings aren’t felt by the same groups. Often it’s employers or private insurance who are being asked to pay for the prevention. But the savings aren’t guaranteed to be felt by that same employer or insurance company. People change jobs and insurance plans all the time. Another company may see the later savings. Or, it might be Medicare, when people reach age 65. Why should a company pay tons of money now when others are going to see the financial benefits?

I think this problem is glossed over too often when people talk about prevention in economic terms. I keep hearing how prevention, and Sovaldi, are societal goods. But healthcare isn’t always drawn from societal spending. It’s often private spending, from private insurance companies. Where’s the economic argument for how this works for them?

This is one of those moments when a single payer system* seems to make more sense. When it’s one insurance system covering you from birth to death, then the argument for spending money now to save money later makes more intuitive sense.


*I’m not looking for a debate on single payer here. I’m just saying that when it’s clear that the same entity (private or public) is responsible for you now AND later, then the arguments for prevention and Sovaldi seem more logical

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