Quantifying national spending on wellness and prevention

Abstract

Purpose: We estimate national health expenditures on prevention using precise definitions, a transparent methodology, and a subdivision of the estimates into components to aid researchers in applying their own concepts of prevention activities.

Methodology/approach: We supplemented the National Health Expenditure Accounts (NHEA) with additional data to identify national spending on primary and secondary prevention for each year from 1996 to 2004 across eight spending categories.

Findings: We estimate that NHEA expenditures devoted to prevention grew from $83.2 billion in 1996 to $159.8 billion in 2004, in current dollars. As a share of NHEA, this represents an increase from 7.8 percent in 1996 to 8.6 percent in 2004. This share peaked at 9 percent in 2002 and then declined due to reductions in public health spending as a percent of NHEA between 2002 and 2004. Primary prevention represents about half the expenditures, consisting largely of public health expenditures--the largest prevention element. ORIGINALITY/VALUE OF PAPER: Our 2004 estimate that 8.6 percent of NHEA goes to prevention is nearly three times as large as the commonly cited figure of 3 percent, but depends on the definitions used: our estimate falls to 8.1 percent when the research component is excluded, 5.1 percent when consideration is limited to primary prevention plus screening, 4.2 percent for primary prevention alone, and 2.8 percent if we count only public health expenditures. These findings should contribute to a more informed discussion of our nation's allocation of health care resources to prevention.