> $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!
