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Valuing Human Life July 14, 2006

Posted by federalist in Economic Policy, Government Spending, Healthcare, Social Politics.
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Suppose you were captain of a ship sinking in the North Atlantic.  Of course, you’re going down with your boat, but after putting the women on the life raft you have room to add exactly one more person.  Everyone else will certainly die.  And it turns out that there are only three people left to save: A toddler, a young man, and an elderly man.  You know nothing about any of them, and there’s no time for interviews.  Who do you choose to take the last spot on the raft?

Your answer to this question may be rooted entirely in your relative emotional response to seeing each of those individuals sent to his death.  But what’s the right answer?  Hopefully you could be persuaded that the person that should be saved is the most valuable of the three.  And how do you determine the relative value of people — not to yourself, or to their loved ones, but to society in general?

This is an issue our society has neglected to confront, and it is costing us terribly.  We continue to dedicate ever greater public resources towards the preservation of life and health, but we have not dedicated a commensurate amount of time towards considering how those resources should be allocated.  Healthcare resources are finite but the capacity to spend on healthcare for any individual is growing without bounds.  How do we draw the line on public healthcare spending?

One Nannette Croce had an excellent commentary on this problem:

Many do not realize that affordable health care is much like the nation’s oil supplies. Overconsumption leads to … less availability. In this analogy, current older Americans are like the SUV owners — consuming the biggest share and increasing prices for all of us.

Lest this sound too damning of our elderly population, it is only fair to point out that the World War II generation has served as guinea pigs for a vast experiment. They are the first generation to benefit from a wealth of medical achievements that prolong the length, if not always the quality, of life, and are exhorted by health-care givers and their boomer children to “not go gently into that good night” but to fight it at every turn.

We have arrived at the point where it is taken for granted that an 85-year-old will undergo the same aggressive cancer treatment as a 35-year-old…. Prolonging life, even a very debilitated life and even for a very short time, has become the driving focus. 

I would take for granted that we have to maintain a principled respect for life at all its stages.  We will all (hopefully) pass through every stage, and we owe each other that basic dignity.  But respecting life doesn’t mean we can’t also accept basic facts of life and mortality.

This question only arises when private wealth is confiscated for public spending on healthcare.  I.e., this question would be a lot easier to answer if government stayed out of the welfare and healthcare business.  But I suppose we could view government as a massive, mandatory mutual insurance co-op, to which we all subscribe as soon as we are born, and from which we all therefore derive the same basic coverage.  So let’s answer the question: What healthcare insurance does government owe us?

In private insurance, participants are assessed premiums sufficiently high to cover the expected payouts of the insured pool.  Insurance exists only to isolate individuals from unexpected, catastrophic costs — not to subsidize them from known costs.  But government healthcare embeds a subsidy along with its insurance characteristics, which clouds the question of how much of government healthcare is welfare and how much is insurance.

Government also doesn’t seem to want to price in the differential costs of its insurance.  As far as I can tell (and does any one person really know the full extent of government healthcare?) there is a menu of healthcare services that the government will provide to any “needy” citizen.  Since the cost of providing a fixed menu increases dramatically with the age of an individual (a known risk factor that pure insurance would price into its premiums) the welfare component of government healthcare also skyrockets as its insured citizens age.

Maybe government healthcare is just a giant pyramid scheme.  If the citizens really want to impose taxes in order to fund increasingly costly treatments for increasingly old and sick people, I guess they can choose that.  But if we explicitly showed the costs and benefits of these public dollars, I can’t believe any reasonable democracy would make that choice.

Leaving aside the question of what the right level and nature of social insurance is, the other consideration would be the public interest in preserving the life and health of any individual.  And this should be a much more tractible question.  If government is a social machine designed to maximize the public good, then it would have to weigh the public value of each individual.

We may not like to make life and death choices between individuals, but whether we do so explicitly or tacitly we have a public system that does not do everything possible for anybody.  I.e., we’re already making these choices.  We just aren’t doing it very intelligently.

Consider a newborn, a five-year-old child, a 20-year-old laborer, a 24-year-old with an advanced degree, a 65-year-old retiree, and an 80-year-old elder.  Suppose you hold the public purse strings, and you have to decide how much you would be willing to spend on healthcare for each of these catagories (without knowing any more about the individuals).

This is still a very difficult question, because a lot of healthcare is prophylactic, so the costs are definite but the benefits are not.  So let’s simplify it further and suppose that each of these individuals is about to die unless they receive a life-saving treatment.  You have $1 milion in your purse.  Your duty is to act in the public interest.  What is the maximum you would allocate to each of these individuals to save their life?

Here are the factors that occur to me first: The infant represents very little public investment.  If he dies, he could be replaced in just one year with a small marginal cost.  If nothing else the 5-year-old has that advantage — namely, a 6-year lead-time to replacement.  He has also survived a critical period in human life, so his life expectancy is higher, and maybe he has some publicly funded immunizations.  The young laborer is at his peak potential, capable of perhaps 40 years of production.  Similarly, the young master represents an enormous investment in human capital that has generated hardly any returns for society.  These are probably the individuals most worth saving.  The retiree may have even greater skills than them, but the expected return on him is very low.  If he works at all, it won’t be for much longer.  The elder has all but exhausted his productive capacity.  If he needs public funds to preserve his life, he probably doesn’t have anything left to give back other than even more costly health complications in short order.

Age is a simple factor.  Life expectancy and public investment are also not terribly complicated to estimate.  Entitlement is also partially weighed — the Veterans Administration provides exceptional care to citizens who have risked their life in their country’s defense, and my understanding is that essentially no expense is spared to recuperate casualties of war.  This is as it should be.  I find it odd, however, that on the other side we don’t restrict the eligibility of convicted felons — violators of the social contract — for public healthcare benefits.

In any case, it would be nice if at least these simple factors were incorporated into our public funding of healthcare.

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1. federalist - September 4, 2006

WSJ features an article with some interesting statistical conclusions:

The authors examined life expectancy figures from the Centers for Disease Control and Prevention as well as government surveys on medical spending. They found that, on average, a person born in 1960 could expect to live 70 years, whereas someone born in 2000 has a life expectancy of 77 years, a gain of seven years. But for the person born in 1960, lifetime medical spending was only $13,943; the figure for someone born in 2000 was $83,307. (To make each year comparable, the study adjusted amounts to the dollar’s inflation-adjusted value in 2002.)

Of course, healthier behavior could also account for longevity gains. So the researchers estimated that about half of the years gained — about 3.5 — were directly due to medical care. Based on their analysis, each one of those extra 3.5 years cost about $19,900. The cost of each added year of life went up from $7,400 in the 1970s to $36,300 in the 1990s.

This, say the authors, is a good value — based on health economists’ widely accepted figures of cost effectiveness in health care that consider a person’s lifetime of economic productivity and the value placed on staying alive. In general, treatments that extend life for a cost below $100,000 a year are deemed acceptable, says Dr. Vijan.

However, the study found that as one gets older, gains in life expectancy are not as steep, and costs start to pile up. For example, a person aged 65 in 1960 could have expected to live an additional 14.4 years, whereas a 65-year-old in 2000 can expect an extra 18 years, a gain of about 3.5 years. But the cost per year of life gained through medical care was, on average, $84,700. The cost between 1960 and 1970 was $75,100, whereas between 1990 and 2000 it was $145,000.

Kenneth Thorpe, chairman of the department of health policy and management at Emory University’s Rollins School of Public Health in Atlanta, praised the study, but says it leaves unanswered the question of what exactly is producing the increased life expectancy. “I worry that it gives the impression that the spending is worth it,” he says. “We’re still spending way too much on health care.”

2. federalist - October 6, 2006

Sharon Begley’s Science Journal column applies this question to the ethics of distributing limited flu vaccines:

This dilemma is haunting experts concerned that avian influenza might start spreading from person to person instead of (as far as we know) mainly from birds to people. But it also applies to regular old flu, which always has the potential to reach pandemic proportions. In response, studies now are shedding light on the ethical issues and the most effective strategy for reducing illness and death if vaccine must be rationed. Sadly, they make a pretty good case that current U.S. policies leave a lot to be desired.

First, ethics. In May, scientists at the National Institutes of Health stirred things up with a paper calling into question the policy that aims to save the most lives by first vaccinating the old, the very young and the sick, putting last those who are two to 64 years of age.

The value of a life, they argued, depends on age. A 60-year-old has invested a lot (measured by education and experience) in his life, but has also reaped most of the returns. A child has minimal investment. A 20-year-old has great investment but has reaped almost none of the returns. Conclusion: To maximize investment in a life plus years of life left, 13- to 40-year-olds should have first claim on rationed vaccine, explains NIH’s Ezekiel Emanuel.

Second, efficacy. Let’s leave aside the fraught question of the value of a life. Evidence keeps accumulating that vaccinating the elderly might not even be the best strategy for minimizing deaths. The reason is that during some flu pandemics, the mortality rate among the elderly is hardly higher than during nonpandemic years. The flu certainly kills some old people, says Dr. Emanuel, but many would have died anyway. In addition, they may not benefit from flu vaccines as much as is assumed: A 2006 study found that the antibody response by people over 65 is less than half that in young adults.

Critics reply that the elderly are more likely to die if they get the flu, so ethics requires you protect them, the most vulnerable, first. Indeed, in the 1957 and 1968 pandemics, the very young and very old had the highest flu-mortality rates. But in the 1918 pandemic, 20- to 40-year-olds and children under five had the highest mortality rate. The elderly were more likely to either not become infected or to survive if they did, perhaps because only someone with a sturdy immune system lived to a ripe old age back then.

The common-sense notion that vaccinating the elderly is the best way to save the elderly also deserves scrutiny, according to a study this week in the journal PLoS Medicine. Infants and the elderly don’t spread the flu as much as, say, a schoolchild or business traveler. Might you decrease both illness and death, including among the old, by vaccinating other age groups first?

3. federalist - August 17, 2007

Notable quote by Kip Viscusi care of MarginalRevolution:

[I]n the case of Superfund cleanups of hazardous wastes, the people who benefit from the cleanups are not paying the costs directly and thus demand the most stringent standards possible. The result is that the median cost per cancer case averted is about $7 billion. It’s off the charts because you are using the responsible parties’ money to clean up the site. In contrast, if you look at the amount of money people are willing to pay for houses that are not exposed to hazardous waste risks, you don’t observe that kind of large trade-off at all. It’s more like $5 million rather than $7 billion. Similarly, the premium that workers require to work in relatively dangerous jobs is a lot less than what government agencies spend on regulations.

4. federalist - September 12, 2007

Robin Hanson brings us more evidence that we are overspending on healthcare:

[A] 1998 Lantz, et al. study in the Journal of the American Medical Association of 3,600 adults over 7.5 years found large and significant lifespan effects: a three year loss for smoking, a six year gain for rural living, a ten year loss for being underweight, and about fifteen year losses each for low income and low physical activity (in addition to the usual effects of age and gender).

Note that someone willing to pay $1,000 to gain 2.5 days of life should be willing to spend about $1,000,000 to gain six years by living rurally, and $2,000,000 to gain fifteen years via high exercise. These figures seem to me to overestimate the observed eagerness to live rurally or to exercise.


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