An Unhealthy America: The Economic Burden of ... - Milken Institute

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An Unhealthy AmericaMilken Institutetwenty-year period. The baseline projection calls for an annual growth rate in the health-care cost index of3.4 percent, while the optimistic projection uses a rate 0.5 percent lower. This optimistic path would still result inhealth-care cost index increasing nearly 1.0 percentage point faster than overall inflation.Figure 10 : : Avoidable Treatment Expenditures, 2023Heart DiseaseCancersMental DisordersPulmonary Conditions$110 $76$109 $37$107 $28$92 $26HypertensionDiabetesStroke$27 $10$65 $23$63 $17Alternative FutureExpenditures Avoided$0 $50 $100 $150 $200Treatment Expenditures (US$ Billions)Source: Milken InstituteAs discussed previously, our assumptions on the reduction in health-care cost growth attributable to improveddisease management practices, early screening, and intervention in the optimistic scenario are modest. Forexample, more widespread breast self-examination or improved diagnostics would catch breast cancer at anearlier stage, when less-aggressive treatments are available, and reduce the growth in expenditures to treatpatients. In the case of asthma (included in pulmonary conditions), improper management can lead to frequenthospitalizations and result in higher treatment expenditures. Improved disease management of diabetes canlessen the risk factors for developing cardiovascular disease and other conditions.We estimate that more effective prevention and management of disease could save $218 billion in treatmentexpenditures annually in 2023 in the optimistic scenario. These avoidable treatment costs, $1.6 trillion over theperiod, can be attributed to changes in behavior, preventative measures, and innovation. To put this intoperspective, such a savings—or a loss, depending on how we face the issue—is nearly double the size of India’seconomy. Or twenty-one times the Department of Education budget.We find that breast cancer treatment expenditures drop 20.6 percent ($3.2 billion) in the optimistic scenario;colon cancer expenditures decline by 25.5 percent ($2.7 billion); prostate cancer expenditures fall 28.9 percent($4.1 billion); lung cancer expenditures are down 26.2 percent ($4.2 billion); and expenditures for other cancers fall25.8 percent ($23.1 billion). Treatment costs for all cancers are 25.6 percent ($37.4 billion) less in the optimisticscenario. The cumulative difference through 2023 between the optimistic and baseline scenarios is $22.3 billion for[ 19 ]
An Unhealthy AmericaMilken Institutebreast cancer; $21.7 billion for colon cancer; $27.2 billion for prostate cancer; $32.4 billion for lung cancer; and$168.5 billion for other cancers. In the optimistic scenario, all cancers total $272.0 billion lower on a cumulative basis.In 2023, treatment expenditures for pulmonary conditions are 22.2 percent ($26.2 billion) lower in the optimisticscenario. They drop 20.7 percent ($28.0 billion) for mental disorders; 21.5 percent ($17.1 billion) for diabetes;40.8 percent ($75.8 billion) for heart disease; 26.4 percent ($23.3 billion) for hypertension; and 26.5 percent($9.7 billion) for stroke. The cumulative difference over the projection interval for pulmonary conditions is $199.6billion; $196.6 billion for mental disorders; $118.5 billion for diabetes; $561.7 billion for heart disease; $179.6 billionfor hypertension; and $72.7 billion for stroke.Potential to Avoid Lost ProductivityBaseline and optimistic scenarios help convey the forgone economic output attributable to lost workdays andproductivity. As before, the estimate of future productivity losses will be the difference between the two scenarios.National projections show a difference in the baseline and optimistic scenarios (based on GDP) of $905 billion(26.9 percent) in 2023. Figure 11 provides a comparison of the scenarios for total productivity losses. The productivityloss from cancer is $373 billion (38.9 percent) lower in the optimistic scenario. Similarly, the productivity loss forheart disease is $137 billion (43 percent) lower. The cumulative difference between the projections is $6.9 trillion(16.1 percent). 22Figure 11 : : Avoidable Productivity Losses, 2023CancersHypertensionMental DisordersDiabetes$587 $373$666 $173$480 $88$277 $73Heart DiseasePulmonary ConditionsStroke$182 $137$218 $47$47$14Alternative FutureProductivity Losses Avoided0 100 200 300 400 500 600 700 800 900 1000Productivity Losses (US$ Billions)Source: Milken Institute[ 20 ]
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