CBO Doubts Aside, Wellness And Prevention Look Strong In Health Reform

The case for wellness and prevention playing a role in health care reform remains strong despite Congressional Budget Office doubts about whether associated cost savings are quantifiable, stakeholders say.

In an Aug. 7 ¹ letter to Rep. Nathan Deal, R-Ga., CBO notes "designing government policies that are effective at inducing people to be healthier is challenging" and will likely involve substantial costs over an extended period.

"Identifying the effects of wellness services on health is especially difficult because those effects may not emerge for years," CBO Director Douglas Elmendorf writes to Deal, ranking member of the House Energy and Commerce Subcommittee on Health.

Under CBO's budget scorekeeping rules, prevention and wellness activities do not produce sufficiently demonstrable and quantifiable savings in the near term to qualify as offsets to appropriations.

"Evidence suggests that for most preventive services, expanded utilization leads to higher, not lower, medical spending overall," Elmendorf adds in the letter.

However, CBO scoring differs from a general cost-benefit analysis, which would more accurately reflect savings, Joan DaVanzo, CEO of Dobson, DaVanzo & Associates health care consultancy in Vienna, Va., maintained.

"The objective of a cost-benefit analysis is to include all the costs and all the benefits of a given intervention and properly quantify them. A CBO score is designed to estimate the impact of a given intervention on the federal budget," she said in an e-mail.

Congressional interest in dietary supplements and other prevention and wellness initiatives suggests lawmakers realize the value of long-term cost-benefit analysis. Reps. Dan Burton, R-Ind., Earl Blumenauer, D-Ore., and Ginny Brown-Waite, R-Fla., have offered legislation that would allow tax benefits for supplement purchases (² (Also see "Legislation Seeks Space For Supplements On Health Care Reform Slate" - Pink Sheet, 27 Jul, 2009.)).

The House Agriculture Subcommittee on Department Operations, Oversight, Nutrition and Forestry held a hearing Aug. 5 to discuss strategies for improving nutrition and wellness programs.

"We must shift the health care paradigm in America, moving from a system that treats the symptoms of sickness and disease to one that promotes lifelong wellness and prevention," said subcommittee ranking member Rep. Jeff Fortenberry, R-Neb.

"It is essential that we fully explore the potential health outcomes and cost savings of wellness strategies," he said at the hearing in Lincoln, Neb.

On the Senate side, Tom Harkin, D-Iowa, said he supports remaking the U.S. as a "wellness society," in part by pressing for better nutrition and studying the health benefits of supplements (³ (Also see "Sen. Harkin Defends DSHEA, Promotes Supplements In Health Legislation" - Pink Sheet, 20 Jul, 2009.)).

Supplements As A Piece Of The Puzzle

While CBO does not mention dietary supplements specifically in the letter, it does touch on smoking cessation initiatives and obesity prevention efforts as wellness tools. The office also refers directly to preventive medicine such as vaccines and medical procedures such as cancer screenings.

Case studies of workplace wellness programs that involve nutrition coaching and smoking cessation components show reductions in subsequent medical expenditures, though CBO says "little systematic evidence exists."

"The findings from case studies may not be applicable to programs that would be implemented more broadly," CBO says.

The dietary supplement industry is lobbying to be part of health care reform, and CBO's scoring should not diminish the role of vitamins, herbals and other nutritionals in health care, said Council for Responsible Nutrition executive Mike Greene.

"This is not just about dietary supplements. ... They're looking at a whole host of prevention and wellness issues, and the health cost savings associated with them," said Greene, CRN's senior director of government relations.

"By not allowing dietary supplements to be a part of that, particularly with the benefits and the research where we see that it does show a benefit, I think that would be a mistake," he added.

DaVanzo, who studied health care cost savings associated with specific supplements while with the Lewin Group, said she does not expect CBO's doubts to affect the place of prevention and wellness in health care reform legislation. She pointed out that wellness is already a facet of government programs such as Medicare.

DaVanzo's work with cost-benefit analysis demonstrates the extended time horizon necessary for measuring the benefits of nutrient supplementation. Her 2005 Lewin research projected that over a five-year period, seniors' use of omega-3 fatty acids and lutein with zeaxanthin could lead to Medicare cost savings of $5.6 billion (⁴ (Also see "Lutein, Omega-3 Uptake Would Save Healthcare System Billions, DSEA Claims" - Pink Sheet, 7 Nov, 2005.)).

Business Opportunities In Wellness

Supplement and nutritional firms appear poised to take advantage of the wellness and prevention opportunities in health care reform.

At the Canaccord Adams Global Growth Conference in Boston Aug. 11, Herbalife and USANA Health Sciences executives separately talked up the value of their products in the wellness paradigm.

Herbalife Chief Financial Officer Richard Goudis noted that 63 percent of the firm's business aims to help solve the obesity epidemic through weight-management products.

The Los Angeles-based multi-level marketer believes "that proper weight will be probably the best factor in controlling health care costs here and abroad," Goudis added.

People are "moving towards a realization and understanding that nutritional supplementation and prevention is a far more cost-beneficial way of treating and/or preventing disease," said Jeff Yates, VP and chief financial officer for Salt Lake City-based USANA.

"We feel like USANA is well-positioned in the marketplace to take advantage of these trends," Yates told the analysts.

- Dan Schiff ( ⁵ [email protected] )