Preventive medical services encompass a wide range of interventions, including vaccinations that prevent diseases from occurring and screening tests designed to detect the presence of a disease before symptoms appear. Delivering preventive medical services results in costs for each person using the service. Vaccinations may cause some of those people to avoid the targeted disease, and screenings may allow some people to receive treatment earlier. Those people generally benefit from preventive medical services, but the net result can be decreases or increases in overall health care spending. In this presentation, CBO’s Director provides an overview of the agency’s methods for estimating the budgetary effects of proposals to expand the use of preventive medical services.

1. Congressional Budget Office
House Budget Committee Roundtable
June 16, 2020
Phillip Swagel
Director
How CBO Analyzes Approaches to Improve
Health Through Disease Prevention

2. 1
CBO
Expanded Use of Many Preventive Medical Services
Has Improved Health and Increased Health Care Costs
The use of preventive medical services can, and often does, improve
people’s health.
A comprehensive review of the research literature conducted in 2008
found that most preventive medical services improved health but that
about 80 percent of them led to higher health care spending overall.
A 2014 study by the Government Accountability Office supported the
findings of the 2008 review.

3. 2
CBO
Savings come from only a subset of people who receive the services—from
preventing diseases or identifying and treating them early on.
Even when the price of a particular service is low, costs can accumulate when
many people receive it.
Services can have unintended costs (adverse reactions to vaccinations and
false positives from screenings, for example).
Services may increase patient longevity, resulting in people living longer and
potentially incurring treatment costs for other medical conditions.
Preventive Medical Services Can Increase or Decrease
Health Care Spending

4. 3
CBO
The effects on the federal budget are often smaller than the effects on total health
care spending because the federal government does not pay for all health care.
Some people may already be receiving the service; for them, additional federal
support might shift costs to the government without improving health.
Savings may not fully emerge within the 10-year budget period.
Improved patient longevity can increase federal outlays.
Effects on the Federal Budget May Differ From Effects on
Overall Health Care Spending

5. 4
CBO
CBO estimated that covering tobacco cessation services for pregnant women
under Medicaid would reduce federal spending for that program.
CBO estimated that expanding Medicare’s benefit package to waive cost sharing
for the “Welcome to Medicare” visit and include a new annual wellness visit with
no cost sharing would increase federal spending for that program.
CBO Analyzes the Effects of Legislative Proposals to Expand
Preventive Medical Services on a Case-by-Case Basis

6. 5
CBO
A vaccine for the coronavirus has not yet been approved and made widely
available.
CBO anticipates that if and when that happens, the effects on the federal budget
could be substantial and would depend on many factors.
Legislation related to a vaccine for the coronavirus differs from proposals involving
most other preventive medical services in that it could have major macroeconomic
effects, such as a faster rebound of economic activity and increases in tax
revenues. The size of such effects would depend on many factors.
By long-standing convention, such effects generally are not reflected in
CBO’s cost estimates.
The Effects of a Coronavirus Vaccine on the Federal Budget
Could Be Substantial But Are Very Uncertain