ROI/Payback

Q. Why should state & federal governments and private health plans & providers be interested in investing in schools?

A. Because clinical settings and other approaches have not improved health behavior enough to prevent chronic diseases and to control health costs at the scale needed.

In spite of the constant admonitions of doctors & nurses, not to mention pervasive TV, clickbait & social media health advice, few adults permanently change their unhealthy lifestyles.  Instead, they are dependent on lifelong drug prescriptions and other “disease management” care—at very high cost to themselves and others.

We all pay the price for our & others’ unhealthy habits—and that price is now close to 15% of our incomes, and averages out to $12,000 per person—and still increasing.

(Business owners and employees with private health insurance pay a particularly high price:  The government won’t reimburse health care providers for the true cost of Medicare & Medicaid.  So health insurers must pass on the extra costs—with ever-higher premiums & deductibles.)

We can reduce preventable chronic conditions and associated costs among the non-elderly adult population by an estimated 20%, through healthier state policies, the Plan-Develop-Evaluate model, and other K-12 approaches—sustainably funded with health sector monies.

Those 13 healthier years postpone chronic disease on-set and reduce chronic condition severity among young and middle-age adults. Chronic conditions, which are currently starting in the teens, 20s & 30s, get deferred to later in life—when they used to start.

Adding on adult prevention policies will result in even higher rates of persistence of healthier habits. Past examples of this, which have been very effective, include tobacco taxes and health insurance discounts for non-smokers.

We can ensure that students receive at least 60 minutes of daily physical activity, including a high percentage of moderate to vigorous physical activity, when we do this through schools. While we cannot control all of students’ nutrition, we can control the nutrition quality of school meals, and we can influence student nutrition outside school—especially parental and family nutrition. Recess also helps develop children’s ability to interact socially including how to deal with conflicts and also helps develop character.

In the middle and high school years, as things like bullying, substance abuse, and anxiety and depression become bigger threats, Healthy Students Healthy State invests in both health education and school counseling, as well as physical activity, in order to significantly improve student mental wellness, too.

Thirteen years of healthier habits throughout the K-12 school years could save an estimated 20% of our projected chronic costs–by postponing the on-set and reducing the severity of chronic disease, including a number of mental health issues, for at least 20% of our 64 pre-Medicare years.

Postponing On-set Guarantees Cost Savings

Of course, healthy habits developed in childhood must then be reinforced in the workplace and at home, in order to prolong habits learned at school throughout adulthood. 

We can do this much more easily, if we are able to build on a K-12 foundation of healthier habits. Then follow-on policies and practices targeting young & middle-age adults can reduce long-term preventable chronic health care costs up to a total of 50% below projected future levels, given current health trajectories.

The huge cost savings potential is supported by a growing number of studies, as well as by the US antismoking track record.

We are only including the 20% cost savings from Healthy Students Healthy State in our estimates here, since they are achievable from Healthy Students Healthy State-related impact alone.  We do not assume changes in future public policies targeting adults in these 20% estimates.

We are making significant progress toward increased health sector funding of quality, effective, evidence-based physical and health education, recess, physical activity, & toxic stress reduction at school. (When we say “health sector” here, we mean health-related government budgets such as Medicaid/AHCCCS, as well as the health care budgets of self-insured employer health plans and private health insurance.)

Good news for Arizona and other states adopting Healthy Students Healthy State:

Once public & private health plans step up to help reimburse these costs, with the legislature and Medicaid co-investing, we can eventually reach $500+ million per year in new money into Arizona schools—while significantly reducing diabetes, severe obesity, high blood pressure, back & arthritis pain, many cancers, ADHD, anxiety & depression, & other chronic health conditions.

Other states will benefit proportionally, based on their size.

K-12: 1st Year/Every Year Payback

Due to the high prevalence of ADHD, obesity, anxiety & depression among children now, regular moderate-to-vigorous physical activity (MVPA) for all children at a school pays for itself rapidly. It can provide $30-50 in annual child health savings each year for each elementary student, and $50-75+/year for each middle & high school student.

This addresses health organizations’ central objection: that they are under extreme financial pressure, and find it difficult to invest now in children—if the payback is only much later, in students’ middle-age in adulthood.

This means, given the low cost per student of the Plan-Develop-Evaluate model—for schools with adequate quality physical education instruction time—health plans can pay back their investment in the first year. (Payback is longer when the health sector needs to fund adding more quality PE time, but the ROI is still rapid & high, as described below.)

Beyond K-12: Long-Term Health ROI

It is much easier to keep kids active, give them healthy nutrition, & develop healthier habits in a controlled “captive audience” K-12 school environment for 13 years, rather than attempting to change adult health behavior without that groundwork having been laid in childhood.

In addition, there is huge future upside for health funders, from postponing the on-set and reducing the severity of later-life chronic conditions in adulthood. Through 13 years of K-12 whole-student-population preventive education and healthier behavior, we can expect future annual savings of thousands of dollars per adult.

Those 13 healthier school years postpone chronic disease on-set and reduce chronic condition severity among young and middle-age adults. Chronic diseases, which are currently starting in the teens & 20s & 30s, get deferred to later in life…and in many cases people will remain healthy through middle-age and even beyond, built on a K-12 foundation for lifelong health.

It bears repeating: 

School-based strategies also provide a foundation for follow-on policies for adults.

Healthy habits developed K-12 lay much better groundwork for adult adherence to prevention (& treatment) policies in adulthood, providing a viable opportunity to extend habits and savings much later in life.

Doctors should also expect to see much greater adherence to their recommendations, since individuals will have more awareness of their health, including the causes, prevention and treatment of diseases.  After all, not everything can be prevented.

Reinforcing K-12 Prevention with Adult Policies

Population-wide K-12 preventive education builds a foundation of support for other pro-health policies, both public health and private employer health promotion. 

It raises the awareness of students and their parents & communities, as well as of the general taxpaying and voting public, about the very negative personal and family financial & tax impact of unhealthy behavior. 

For example, instead of sugar-sweetened soda taxes being perceived primarily as “nanny-state” interference in our lives, an increasing proportion of the public would understand the health benefits of prevention.  Many would be able to balance arguments for absolute food freedom and lower cost beverages, with evidence that the public would be healthier and financially stronger by better informing the public and disincentivizing unhealthy food and beverages.

In addition, as health care costs take an increasing share of both federal budgets and household incomes, both the public and political leaders will become increasingly desperate for solutions—and open to strategies which they might not have accepted in the past.

Let’s look at these school-related savings by stakeholder group (This is calculated for Arizona—but scale up or down for your state based on its population relative to Arizona’s 7M+ residents):

Given the estimated $1B/year investment needed, with roughly $250M-400M contributed by each funding stakeholder group, $10B+/year long-term savings imply at least a 5-10x ROI per stakeholder group and at least 10x total ROI.

No matter where you sit, this investment is medically & financially as well as ethically & morally compelling.

Higher Tax Revenue from a Healthier Population

Economic development staff also note that an increase in GDP inherently increases government tax revenue—without raising tax rates:

• Economic growth means higher business revenue & profits, higher family incomes & purchases, and higher property values.
• This means that people are paying more in tax, too. But they are benefiting so much from economic growth that they typically don’t care.
• After all, as long as tax rates are not increasing (“no new taxes”), taxpayers do not generally think that paying more in taxes is a problem.