The need to put dollar values on lives.

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The need to put dollar values on lives.

#1  Postby Loren Michael » May 21, 2013 3:31 am

From here, taken from a much broader-ranging interview that is itself very interesting. The most relevant bit is in blue at the bottom:

Ezra Klein: I almost feel bad asking it after this particular discussion, but what has this work made you think about our health-care system’s problems, recognizing everything you said about how incredibly, incredibly different they are from, truly poor countries?

Bill Gates:
It’s an important topic and I do care about it. My deep interest in this came somewhat because it’s fascinating but also because our big cause in the U.S. is education, and if you look at state budgets, they are moving money from education to health. They have to because the health costs are just exploding. So very quickly say to yourself, gosh, if there’s going to be any money left for university education and adequate money for K-12, even to stay flat, you have to figure out health-care costs.

Unfortunately, in rich-world health, innovation is both your friend and your enemy. Innovation is inventing organ replacement, joint replacement. We’re inventing ways of doing new things that cost $300,000 and take people in their 70s and, on average, give them an extra, say, two or three years of life. And then you have to say, given finite resources, should we fire two or three teachers to do this operation? And with chemotherapies, we’ve got things where we’ll spend our dollars on treatments where you’re valuing a life here at over $10 to $20 million. Really big, big numbers, which if you were infinitely rich, of course that would be fine.

So most innovations, unfortunately, actually increase the net costs of the healthcare system. There’s a few, particularly having to do with chronic diseases, that are an exception. If you could cure Alzheimer’s, if you could avoid diabetes — those are gigantic in terms of saving money. But the incentive regime doesn’t favor them.

EK: You’ve talked a lot so far about this question of DALYs. We’re very uncomfortable putting a value on human life. The way I see our health system is we’ve chosen to pay a huge premium in order to avoid these questions. A prerequisite for the kind of cost-cutting innovations you’re talking about it is being willing to make judgments about what a human life is worth, or even what a few months of a human life are worth. Because if you can’t decide that, then of course you just pay for everything. But if you start trying to make those choices, or even get people to think about those choices, people cry “death panels!”

BG: Yes, someone in the society has to deal with the reality that there are finite resources and we’re making trade-offs, and be explicit about that. When the car companies were found to have a memo that actually said, “This safety feature costs X and saved Y lives,” the very existence of that memo was considered damning. It was “Oh, you think human life is only a bank account.” Or when you made it reimbursable for a doctor to ask, “Do you want heroic care at the end-of-life,” that was a death panel. No, it wasn’t a death panel! It was asking somebody to make a decision.
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Re: The need to put dollar values on lives.

#2  Postby epete » May 21, 2013 4:04 am

Yeah, It's a tricky one. In capitalism you pretty much have to deal with these sorts of thing. Virtually everything winds up with a cost/value of sorts. If people don't like it, then they need to understand that this is just how capitalism operates. If they understand this and still don't like it, then they need to support a different way of doing things.
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Re: The need to put dollar values on lives.

#3  Postby Loren Michael » May 21, 2013 4:22 am

I don't know that "capitalism" is the determining factor. Limited resources don't become a nonfactor in other ways of organizing an economy.
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Re: The need to put dollar values on lives.

#4  Postby natselrox » May 21, 2013 6:09 am

Yeah, I don't see how capitalism is the thing to blame for this. In any system of finite resources, we have to make rational decisions that might sometimes be in conflict with our emotions.

Paul Bloom wrote this wonderful article recently on the downside of (irrational) empathy.

"...empathy will have to yield to reason if humanity is to have a future."

http://www.newyorker.com/arts/critics/a ... rentPage=4
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Re: The need to put dollar values on lives.

#5  Postby Loren Michael » May 21, 2013 8:33 am

That was extremely interesting! I used to watch Paul Bloom on Bloggingheads.tv all the time.

Given that the subtext of this thread is in part about policy, I thought this was a particularly relevant bit:

This dynamic regularly plays out in the realm of criminal justice. In 1987, Willie Horton, a convicted murderer who had been released on furlough from the Northeastern Correctional Center, in Massachusetts, raped a woman after beating and tying up her fiancé. The furlough program came to be seen as a humiliating mistake on the part of Governor Michael Dukakis, and was used against him by his opponents during his run for President, the following year. Yet the program may have reduced the likelihood of such incidents. In fact, a 1987 report found that the recidivism rate in Massachusetts dropped in the eleven years after the program was introduced, and that convicts who were furloughed before being released were less likely to go on to commit a crime than those who were not. The trouble is that you can’t point to individuals who weren’t raped, assaulted, or killed as a result of the program, just as you can’t point to a specific person whose life was spared because of vaccination.

There’s a larger pattern here. Sensible policies often have benefits that are merely statistical but victims who have names and stories. Consider global warming—what Rifkin calls the “escalating entropy bill that now threatens catastrophic climate change and our very existence.” As it happens, the limits of empathy are especially stark here. Opponents of restrictions on CO2 emissions are flush with identifiable victims—all those who will be harmed by increased costs, by business closures. The millions of people who at some unspecified future date will suffer the consequences of our current inaction are, by contrast, pale statistical abstractions.

The government’s failure to enact prudent long-term policies is often attributed to the incentive system of democratic politics (which favors short-term fixes), and to the powerful influence of money. But the politics of empathy is also to blame. Too often, our concern for specific individuals today means neglecting crises that will harm countless people in the future.


Moral judgment entails more than putting oneself in another’s shoes. As the philosopher Jesse Prinz points out, some acts that we easily recognize as wrong, such as shoplifting or tax evasion, have no identifiable victim. And plenty of good deeds—disciplining a child for dangerous behavior, enforcing a fair and impartial procedure for determining who should get an organ transplant, despite the suffering of those low on the list—require us to put our empathy to one side. Eight deaths are worse than one, even if you know the name of the one; humanitarian aid can, if poorly targeted, be counterproductive; the threat posed by climate change warrants the sacrifices entailed by efforts to ameliorate it. “The decline of violence may owe something to an expansion of empathy,” the psychologist Steven Pinker has written, “but it also owes much to harder-boiled faculties like prudence, reason, fairness, self-control, norms and taboos, and conceptions of human rights.” A reasoned, even counter-empathetic analysis of moral obligation and likely consequences is a better guide to planning for the future than the gut wrench of empathy.
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