Life
    Health

    In terms of cold, hard cash, smoking is good for taxpayers. Public health campaigns aren’t

    4 November 2015

    An article in the Guardian warns readers that ‘cuts to public health funding will cost the NHS dear’. This is a reference to the government’s plan to reduce local authorities’ budget for ‘public health’ by £200 million. The Guardian argues that this is short-sighted because money spent on prevention today is bound to save money on treatment in the future. Specifically, it says that a cut of £200 million will lead to at least £1 billion more having to be spent further down the road.

    The source of this estimate is the Faculty of Public Health. The calculations upon which it is based do not appear to be available, but there are reasons to think that a cut of 6.7 per cent to a £3 billion budget will have no effect on taxpayers, now or tomorrow, other than saving them money.

    As several local councillors have told me, the problem is that the money has to be spent on certain projects, regardless of local needs. This almost guarantees an inefficient distribution of resources. Local residents might prefer their money to be spent on the police than on ‘obesity management’, but their leaders’ hands are tied. If there is money still in the budget at the end of the financial year, it has to spent on something — and spending money because it has to be spent is unlikely to encourage prudence. Moreover, each council now has a director of public health (on a six-figure salary) urging them to spend it on the likes of ‘voluntary’ sugar taxes and outdoor smoking bans. One does not need to be an austerity hawk to see that there is fat that could be trimmed.

    But there is a more fundamental reason to doubt that spending a pound on ‘public health’ today will save five pounds in a few years’ time. As the Oxford Handbook of Health Economics explains:

    ‘Although it is frequently argued (but not by economists) that prevention will save expenditure on future treatment, the current body of evidence demonstrates that it is more likely to generate additional health care costs.’

    The simple fact is that when it comes to cold, hard cash, an ounce of prevention is not worth a pound of cure. A review of 599 studies found that 80 per cent of preventive health initiatives cost more money than they saved. Some, such as cancer screening, are inherently expensive, but even relatively cheap, population-wide health promotion projects, such as smoking cessation, cost more money in the long term by increasing demand for healthcare in old age.

    There is no doubt that smoking saves the taxpayer money and there is evidence that this may also be true of obesity. The person who lives to 90 typically consumes a lot more healthcare than the person who lives to 75. Factor in the difference in pension payments and nursing home costs and the financial difference is vast. There are plenty to arguments for encouraging healthy living, but saving taxpayers’ money is not one of them.

    Every special interest group likes to imagine that government spending on their pet projects is an ‘investment’ that will pay off further down the line. Sometimes it is, but often it is not (hello, London Olympics). The truth about spending on ‘public health’ initiatives is that they waste money if they don’t work and they cost even more — in the long run — if they do.