The Value of Human Life and Healthcare Reform

July 31st, 2009

To some extent, many dont want healthcare reform for any number of reasons, ranging from personal financial interest, to ideology, to the status quo being ideal for them and their family. All are reasonable and understandable objections. Of course, the problem is, whether now, or later by market force, its going to happen. Whats a bit scary though are some of the tactics used… Sure, maybe some of it is ideologically / sound bite driven, but when statements are so far off the mark, it does make me wonder what planet folks are on.

I came across the following:

Putting dollar amounts on human lives is unacceptable to us in America!

???? It is common practice, and widely accepted in America. However its the elephant in the room that no one wants to talk about. Granted, there may be some folks who are unaware… either by ignorance, or perhaps its horrific enough, they just dont want to think about it.

Human life does have a dollar figure whether in ones family, ones employer, products we consume, or ones government. Decision matrices do include the dollar costs of human life, whether it be how much life insurance one can afford, workmans comp limits, design calls based upon projected loss of life/litigation, and regulation. There are only so many resources, and tough calls do have to be made…

Some examples:

Mattress Safety

The CSPC propose a new standard for mattresses. It would cost $343 million, in order to save 270 people a year. The value of human life is thus calculated to be $1.2 million, just a tad more than most health insurance companies current set as their life time payout. It was implemented.

School Bus Safety

The National Resource Safety Council did a study as far as school bus safety was concerned. It was determined students lives could be saved by changes in the standards, but at a cost of $40/million per students life. This was deemed too high, and as such was not implemented.

The DOT

The NTSB makes recommendations left and right per their charter. Ie to protect the public. Other agencies balance such recommendations with the economic costs to private business. Changes which are low cost are put out as NPRM with ease, and usually there are few if any comments. Recommendations which are expensive, often times dont even make it that far, and if they do, private industry and lobbyists post comments with a vengence. Sure, on the individual level, where one has control/responsibility it makes sense. Ie, if there is the potential for a landing gear trunion failure in my single seater, and I dont fly much, and its spendy… I dont want this to become a spendy airworthiness directive, I can intelligently accept the risk after weighing all the factors.. Otoh, if a common carrier is involved, where most folks may be unaware of a safety issue, such as 777 thrust roll back, even if it is spendy, the public must be protected, even if the costs mean the end of the $99 airfare.

The Value of Life/Year

Another factor commonly used is the value of life/year. Ie, what is the value of extending a person’s life for 1 year. In the UK, NICE uses a figure of ~$49,000, which has caused no small amount of upset over rationing. In the US, ~$50,000 is a commonly used figure… except when it comes to the uninsured. Stats based upon a Wisconsin study bear the figure out to be around $5,500 for those who do not have insurance. Yet… there is no moral outrage, even if the reason for such is well beyond the control of the individual.

These stats are the elephant in the room no one wants to talk about…