Friday, October 16, 2009

Charles Krauthammer--The Indespensible One

Krauthammer's explanation of why preventative care does not save society money should be required reading. The fallacy comes, like so many others, from confusing two levels of analysis, the individual and the aggregate. At the individual level getting a $500 test that prevents a $10,000 disease is a great deal, $10,000 - $500. But for society it is $10,000 - $500*(the number of people that tested negative).

In this hypothetical the break even number is 1/20. If the disease is any less common than that the test is a waste of money. As Krauthammer reports, the CBO finds that prevention typically costs 10 times what it saves. Turns out everything is expensive, including human lives. Who knew?

Charles Krauthammer : The "Preventive Care" Myth -

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