Using unique individual-level panel data, we investigate whether preventive medical care triggered by health checkups is worth the cost. We exploit the fact that biomarkers just below and above a threshold may be viewed as random. We find that people respond to health signals and increase physician visits. However, we find no evidence that additional care is cost effective. For the “borderline type” (“pre-diabetes”) threshold for diabetes, medical care utilization increases but neither physical measures nor predicted risks of mortality or serious complications improve. For efficient use of medical resources, cost effectiveness of preventive care must be carefully examined.This is consistent with much other data I have seen, including natural experiments such as in Oregon. All are either dispositive or ambiguous about the benefit of preventive care.
It is an interesting question. I have been monitoring this and related issues ever since the mid-eighties. As a management consultant I had a Fortune 500 client. It was tangential to my project but they were at that time questioning the investments they had made in employee fitness centers. The justification in part rested on an anticipated improvement in employee health if they were able to more easily access health/exercise centers. It was thought that the monetary investment in fitness centers would be offset by declines in health costs. Fitter, healthier employees should have lower health costs, right?
Their actual experience was that they expended money to build the exercise centers. Employees used the centers but not to quite the extent that they had anticipated. The problem was that they did not see any linkage whatsoever between investments in exercise/health centers and declines in health costs.
And that, in many fashions, seems to have been the pattern since then. It is logical that better fitness and preventative care ought to lower long term healthcare costs but it is hard to find robust evidence that that is actually what happens.