When Health Care Is Free, Total Health Costs Are Lower Because Preventive Health Services Are More Widely Available.
A common argument for national health insurance is that "free" health care saves money by encouraging preventive services, which allow doctors to catch conditions in their early stages – before they develop into more costly-to-treat diseases. The argument is wrong for two reasons.
First, careful studies show that, in general, preventive medicine raises rather than lowers overall health care costs. Preventive medicine is "economical" only when special at-risk groups are targeted. Giving preventive services to the entire population usually costs more than any savings from early detection of disease.  This does not mean that preventive care is undesirable. Diagnostic tests which show that no disease is present benefit patients – relieving anxiety and creating reassurance of health. Preventive care is like a consumer good which creates benefits in return for a cost. It is not like an investment good which promises a positive economic rate of return.
Second, under national health insurance preventive care may actually become less available, precisely because care is free. A comparison of American and British GPs in the 1970s found that the British saw a GP four times as often. Yet when Americans did see a doctor, they spent two-and-one-halftimes as long with the physician and received far more preventive services. 
Because the services of GPs are "free" to Britons, an inordinate number of their visits are for trivial complaints. In order to handle the case load, British doctors have responded by spending less time with each patient. Moreover, because of the British government's desire to control costs, British physicians have much less access to diagnostic equipment, and most send their patients to a hospital even for chest x-rays and simple blood tests. As a result, preventive medical care is slighted in the NHS system. According to the 1970s comparison: "Even though GPs receive an extra fee for cervical cytology tests (PAP smears), most will not provide such tests unless patients insist. The attitude is similar for breast checks. In 1976, only 8 percent of eligible females received PAP smears, and most of these were given to middle and upper-middle class patients. (By contrast, in 1973 almost 46 percent of American women age 17 or older had been given a PAP test within the previous 12 months.) GPs also receive extra payments for certain kinds of vaccinations. But again, it appears that the inducement is small. Over the last decade there has been a general decline in the percentage of children vaccinated against every major childhood disease." 
One consequence of the lack of preventive care in Britain is that many illnesses are never diagnosed. For example, a series of screenings conducted by the British government several decades ago implied that for every case of diabetes, rheumatism or epilepsy known to a general practitioner, another was undiagnosed. For every case of psychiatric illness, bronchitis, blood pressure, glaucoma and urinary infection, another five were undiagnosed. For every known case of anemia, eight were undiagnosed.  The evidence suggests that things may not have improved: 
A fairly recent study (1989) concluded that for every diabetic being treated under the National Health Service, another case of diabetes is undiagnosed.
Another study (1988) suggests that one in 20 diabetics in England is first diagnosed by an optometrist (when the disease is in its late stages), who then refers the patient to a general practitioner.
At one-half the age of the British system, Canadian national health insurance does a better job – but suffers from similar problems. Although Canadians see their physicians more often than Americans do, a Canadian is not entitled to a routine cholesterol check, unless some other condition warrants it.  And we have already seen how limits on technology have caused extensive waits for other diagnostic services, including PAP smears, mammograms and CAT scans.
Note that the United States does not necessarily do a better job at delivering preventive medicine. As in the case of Britain, it is believed that one out of every two U.S. diabetics is undiagnosed and one recent study reported that between 1980 and 1986, there were 121,560 deaths from disorders that are usually not lethal if discovered and treated early.  However, as the discussion above shows, socializing the health care system by no means guarantees that these problems will be solved.