How CBO Analyzes Approaches to Improve Health Through Disease Prevention
Report
Preventive medical care includes services that can prevent diseases from occurring and detect diseases before symptoms appear. This report describes how CBO estimates the effects on the federal budget of proposals to expand the use of such services.
Preventive medical care includes services that can prevent diseases from occurring (such as vaccinations) and services that can detect diseases before symptoms appear (such as screenings). When legislative proposals would affect such services, CBO’s primary role is to project the federal budgetary effects of the legislation. CBO’s cost estimates typically cover a 10-year period because Congressional budget enforcement procedures generally apply to that period.
This report describes how CBO analyzes such proposals. Key takeaways are the following.
Costs of Preventive Medical Services. 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.
Effects on Health. People who avoid the targeted disease or receive treatment earlier generally benefit from preventive medical services, and their health care costs often decline.
Net Effects. The net result of effects on costs of preventive medical services and effects on health can be decreases or increases in overall health care spending. In many cases, the effects on the federal budget are smaller than the effects on health care spending because the federal government does not pay for all health care. Health improvements can also affect the federal budget if, for example, they increase longevity (which could boost federal outlays and deficits) or reduce disability rates (which could decrease federal outlays and deficits).
Historical Experience. In the cases that have been studied, about 80 percent of preventive medical services have been found to lead to higher health care spending overall.
Effects of Future Proposals. CBO analyzes federal legislative proposals on a case-by-case basis, considering the details of each proposal and drawing on relevant evidence. For example, proposals concerning a vaccine for the 2020 coronavirus could vary widely, as could their budgetary effects, depending 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. By long-standing convention, such effects generally are not reflected in CBO’s cost estimates. The size of such effects would depend on many factors, including how a proposal would affect whether and when a vaccine was approved and widely available, the scope of the pandemic when the vaccine became available, the characteristics of the vaccine, and the extent to which mitigation measures and social distancing influenced economic activity.
