Value in Life, Money, and Opportunity

The healthcare debate is once again renewed given last Thursday’s SCOTUS decision and with it some common fallacies are back too. Among these, one of the most prevalent even amongst some very smart people, is the morality-driven idea that a human life is priceless. It might be unsettling to accept (it is for me), but that is simply not true (and I will not let my flawed intuition override strong facts and logic in this case). A human life is tremendously valuable, but it cannot be maintained at any cost because in the end extremely high costs for healthcare may well hurt a lot more human lives than they will help. Once more, it is a matter of costs and benefits.

There may well be some level of healthcare at which it is optimal to find a way for everyone to be covered. Things like emergency services and possibly routine checkups come to mind. But to say that everyone should be covered for everything life-threatening or life-debilitating is just not prudent. Subsidizing six-figure cancer treatments and other costly treatments for everyone who has those diseases would possibly result in a net negative- including for those who are the worst-off. Taking the extreme, hypothetical example makes this point quite clear: Consider a scenario where someone finds a cure for cancer which costs ten million dollars per person (and let’s assume that the cost is that high because of investment and production costs and not because of markup). According to projections from the National Cancer Institute (of the US National Institutes of Health), over 1.6 million Americans will be diagnosed with cancer in 2012. At a cost of $10 million per year, the total cost of curing all these patients would be $16 trillion. That is greater than the projected GDP for 2012 and several times the federal budget for the year. If such a treatment option was covered via a public healthcare program, it is easy to see how helping those 1.6 million people might hurt a lot more others, in the present and the future, including some within that very 1.6 million. The public cost could easily hurt the economy, which in turn would hurt many, many people, including many who are not well-off.

At the end of the day, life has value and so does money. Healthcare is an investment in extending or bettering a life (value) that comes at a very real cost, in the form of money, opportunity and other stores of value. That being said, it is crucial for any country looking to improve utility to look at the cost-benefit of any health policy before implementing it for subjective, conscious-driven reasons of morality. It may be an inconvenient truth, but it is truth nonetheless.

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