Health: What Is It Worth?

Measures of Health Benefits

Selma J. Mushkin, David W. Dunlop

• Publisher: Pergamon
• Year: 2013
• ISBN:
  9781483188935
• Topic: Medicine
• Subtopic: Alternative & Complementary Medicine

Health: What Is It Worth?: Measures of Health Benefits is a collection of papers that tackles concerns in health care services and health benefit systems. The title first deals with the measure of health status, along with the policy that governs it and the results of contemporary biomedical research. The text also covers the approaches for the assessment of long-term care. The next part talks about valuing health and health benefits. Next, the selection deals with a method for the computation of the social rate of returns derived from investments in biomedical research. The last part discusses the concerns in health resource allocation. The book will be of great interest to the legislative bodies of governments, health officials, and health professionals.

VALUING HEALTH AND HEALTH BENEFITS

Outline

Chapter 4: The Social Value of Saving a Life

Chapter 5: Social Valuation of Life- and Health-Saving Activities by the Demand-Revealing Process

Chapter 6: The Willingness-to-Pay Criterion and Public Program Evaluation in Health

Chapter 7: Issues in the Conceptualization and Measurement of Value Placed on Health

Chapter 8: Willingness to Pay for Probabilistic Improvements in Functional Health Status: A Psychological Perspective

3

The Social Value of Saving a Life

Nancy S. Dorfman

Publisher Summary

This chapter discusses the social value of saving a life. The expanding role of the government in fields such as health and environment has intensified the need for a measure of how much a society is willing to spend to save a human life. The lifesaving efforts concern not the life of a named individual, who can be identified ex ante, but in the probability distribution that the life of an unspecified victim will be lost if the government fails to act. Even if one is aware what the society is willing to pay for the life of such a person, one would be a long way from commanding all of the information needed to make optimal decisions about lifesaving activities. There is much to learn about how many lives, or life-years, will be saved by various programs. It is assumed that all possible programs for saving the lives of anonymous persons can be arrayed with price tags in order of increasing cost per life saved.

The expanding role of government in fields such as health and environment has intensified the need for a measure of how much society is willing to spend to save a human life. Without such a measure, we have no way of knowing whether the public is being asked to invest too much or too little in medical research, air pollution abatement, nuclear plant safety, and similar efforts. Too much would mean that we are spending more than the public is willing to pay for the marginal benefits it receives in return. Too little would imply that the public is willing to pay the price of still greater lifesaving activities in return for the expected rewards.

The lifesaving efforts this paper is about concern not the life of a named individual, who can be identified ex ante, but, in the probability distribution, the life of an unspecified victim that will be lost if the government fails to act. Even if we knew what society was willing to pay for the life of such a person, we would be a long way from commanding all of the information needed to make optimal decisions about lifesaving activities. We have much to learn about how many lives, or life–years, will be saved by various programs. But I want to focus on a narrow but important aspect of the problem. Assume that all possible programs for saving the lives of anonymous persons can be arrayed with price tags in order of increasing cost per life saved. We have, in other words, a supply curve. Where along that supply curve should we stop investing further resources? The problem is to determine the public’s demand function for saving a life. For present purposes, we will assume that the demand price is constant within the relevant range of lives saved.

HOW MUCH TO SAVE A LIFE

To simplify the problem further, consider it in the context of a society made up of exactly n persons. The question, then, is how many dollars would all n persons together be willing to contribute to a program that promised to eliminate the premature death of one additional person in the population in a given year and restore that person’s life expectancy to normal for his age (the life to be saved is not specific to any subgroup in the population and individuals have no control over their own exposure to the particular form of risk). At the time the investment is made, every member of the population is guaranteed a reduction in the risk of premature death during the coming year amounting to 1/n. If n = 1,000, a person who previously faced a 5/1,000 chance of dying next year will find it reduced to 4/1,000 as a consequence of the public expenditure.

Public Good

The benefit produced is what economists call a “public good.” No one can be excluded from its consumption. Hence, if it is available to one, it is available to all. Consumption by one person furthermore does not interfere with its consumption by another. To be sure, in the end the death of only one pers...

Table of contents

• Cover image
• Title page
• Table of Contents
• Pergamon Titles of Related Interest
• Copyright
• Contributors
• Preface
• Foreword
• Introduction
• MEASURE OF HEALTH STATUS
• VALUING HEALTH AND HEALTH BENEFITS
• RETURNS TO BIOMEDICAL INVESTMENTS
• HEALTH RESOURCE ALLOCATIONS
• Bibliography
• Index
• Pergamon Policy Studies