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An Ounce of Prevention

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  • Joseph P. Newhouse

Abstract

I look at prevention through an economic lens and make three main points. First, those advocating preventive measures are often asked how much money a given measure saves. This question is misguided. Rather, preventive measures can be thought of as insurance, with a certain cost in the present that may or may not pay off in the future. In fact, although most medical preventive measures improve expected health, they do not save money. Various lifestyle and early childhood interventions, however, may both save money and improve health. Second, preventive measures, including medical and lifestyle measures, are heterogeneous in their value, both across measures and within measure, across individuals. As a result, generalizations in everyday discourse about the value of prevention can be overly broad. Third, health insurance coverage for medical preventive measures should generally be more extensive than coverage for the treatment of a medical condition, though full coverage of preventive services is not necessarily optimal.

Suggested Citation

  • Joseph P. Newhouse, 2021. "An Ounce of Prevention," Journal of Economic Perspectives, American Economic Association, vol. 35(2), pages 101-118, Spring.
    • Handle: RePEc:aea:jecper:v:35:y:2021:i:2:p:101-18
    DOI: 10.1257/jep.35.2.101
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    Cited by:

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    2. Herrera-Almanza, Catalina & Rosales-Rueda, Maria F., 2023. "Community-based health programs and child vaccinations: Evidence from Madagascar," World Development, Elsevier, vol. 170(C).
    3. Dugord, Clara & Franc, Carine, 2022. "Trajectories and individual determinants of regular cancer screening use over a long period based on data from the French E3N cohort," Social Science & Medicine, Elsevier, vol. 294(C).

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    More about this item

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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