Investing in Health

USC economist Dana Goldman wants to improve health and aging by promoting prevention.

Distinguished Professor Dana Goldman

Economist Dana Goldman is working to improve health – and reduce spending – by calling for policy changes that reward prevention, innovation and long-term investments in people of all ages.

Goldman, who is a USC Distinguished Professor in public policy, pharmacy, and economics at the Price School of Public Policy and director of the USC Leonard D. Schaeffer Center for Health Policy and Economics, also holds a joint appointment at the Leonard Davis School of Gerontology. He notes that as lifespans have increased, so too have the costs for caring for our aging society.

Health care spending currently accounts for nearly 20 percent of US gross domestic product, and that number is only expected to increase. But costs aren’t the only issue, Goldman says, and shouldn’t be our main focus.

“I’m a little concerned that in the current debate, we tend to focus mainly on costs and insurance,” Goldman says. “And the questions around aging are much broader and more dynamic than the current policy debate gives it attention.”

In an interview for the Lessons in Lifespan Health podcast, Goldman explains that incentives within the current health care system are tilted toward providing treatments and services, not preventing disease in the first place.

“Historically, the way we’ve paid for health care is we paid dollars for volume of services. So you have an office visit, you get paid. And the system has responded by giving us lots of volume of healthcare services,” he says. “But that’s not actually what people want. I mean, they aren’t looking to go to the doctor every week. What we really want as a society is good health.”

The medical research field experiences the same motivation to provide new treatments versus preventive measures, especially with intellectual property rights coming into play, Goldman adds.

“If I develop a pill, I have a patent system that gives me some protection. And if I take the risk to figure out some way to get this to patients, I know that someone can’t copy it until my patent has expired. And that has encouraged the development of a lot of pills,” he explains. “But if I come up with a way to get you to walk or eat better or something like that, it’s very easy for someone to copy that.”

Focusing on prevention via healthy lifestyle interventions – and public policies that would make them easier to adopt – could lessen the financial and social costs of health care for an aging population.

“There’s a very good drug, for example, that’s under development … it reduces cancer, reduces cardiovascular disease, may be protective for all Alzheimer’s, helps with diabetes. That drug is called exercise,” Goldman says. “And we’ve done a lot of research on it, and we know it’s very good, but there’s no incentive for anyone in our healthcare system to take older people for a walk. And yet, we know that would be extremely valuable.”

Goldman acknowledges that it’s politically difficult to enact policies that encourage prevention when the health care savings may not manifest for decades. However, the potential costs savings of preventing age-related disease versus staggeringly expensive treatments for individual diseases such as Alzheimer’s and cancer make the tradeoff worth it.

“We need to pay for health, not health care,” he says. “And if we do that, then we’ll be able to accumulate some savings out of the system that I think would help pay for all the other types of infrastructure investments that would make sure that people lead wholesome, long, productive lives.”