How Much Would You Pay to Live One Year Longer?

The concept of placing an explicit value on life is always, fundamentally, awful. Yet it must be attempted from time to time in order to make difficult choices about limited resources.

Wednesday, December 9th 2015, 11:25AM

The very title of this article is an attempt to recognise the problem: we talk about the value of a statistical life. We also rehearse problems from time to time in order to get ready for tough choices.

There are hypothetical examples such as the example of a runaway tram (or trolley problem, as it is known in popular media). The trolley problem is a thought experiment in ethics. The general form of the problem is this: Ahead, on the tracks, there are five people tied up and unable to move. The trolley is headed straight for them. You are standing some distance off in the train yard, next to a lever. If you pull this lever, the trolley will switch to a different set of tracks. However, you notice that there is one person on the side track.

You have two options:
1. Do nothing, and the trolley kills the five people on the main track.
2. Pull the lever, diverting the trolley onto the side track where it will kill one person. Which is the correct choice? The ensuing discussions are an interesting exploration of ethics.

Apart from discussions of ethics exploring the Value of a Statistical Life is useful. There are obviously issues of compensation when a person has been killed. In this article at thewireless.co.nz discusses the introduction of the concept of the Value of a Statistical Life in New Zealand. Far from devaluing human life the attempt to quantify the value and include it in project assessment has meant that lots more safety-based initiatives were funded. Much of the drop in the road toll is credited to the adoption of this approach.

Then there is the value of treatment, whenever you see a heart-breaking story about a person whose life might be saved if the taxpayer would only fund the expensive treatment you are faced with a complex and real-world trolley problem - which money may save many others. Take the case of the drug that goes by the brand-name Keytruda (otherwise known by Pembrolizumab) an expensive new treatment for Melanoma. The folks at Pharmac must consider how many lives might be saved if they allocate the budget to other treatments, perhaps for other disorders. For example, a lot of hip replacements, heart treatments, and even Herceptin – the last drug we heard a lot about – can be bought with the money. Ultimately government must decide the total budget for health services – and even there they must balance the lifesaving priorities of, for example, more spending on preventing melanoma, or building safer roads.

You may indulge in some ranting about drug pricing, you might investigate the complexity interplay of economics and freedom inherent in the problem, or you may simply turn the page. But the health system must make real world choices about where to spend their budget. This article in the UK tackles an important part of that problem - how much you might pay to extend life one year.

Here in New Zealand we are still debating that same equation as it applies to Pembrolizumab. Of course, we would all prefer not to face such a choice. Although expensive, non-Pharmac drugs coverage would reduce the chance of you facing this particular version of trolley bus problem of your own: and leave you simply hoping that you are one of the roughly one in three people that the drug reportedly helps. Medical insurance can prevent some runaway trams.

Tags: Russell Hutchinson