Photo by arriba

Mom always said that life was priceless. But, really, how much is a year of life worth? Coincidentally, I was talking to a fellow fire fighter about this issue yesterday. His brother’s friend had a lifesaving heart intervention that, by his estimate, cost $10 million USD in total. While many plans have a lifetime spending limit somewhere near the $2 million mark, his insurance company apparently paid for the procedures in full. A great success, the medical care he received allowed extended his life until age 45, ten extra years.

Unfortunately, most people lack the luxury of limitless health care resources. The health care system in the US is not a cornucopia (as much as we all wish it were), so where does the rationing start? The uninsured are limited by the size of their wallet (or the size of the charity fund at their hospital), and the underinsured are limited by their health plan. In the United States, there is no system for determining which treatments are “worthwhile” or “valuable”. So, doctors rarely contemplate the costs of different treatment options. Cost, and, by extension, value (years of quality life gained per dollar spent) doesn’t get taken into account in their decisions.

However, across the puddle, the National Institute for Health and Clinical Excellence (NICE) in London takes on this very responsibility for the health care system of the UK. Undoubtedly, determining if a life is worth saving is beyond difficult, but NICE draws the line somewhere between 20,000 and 30,000 GBP ($29,000 to $43,000 US) per Quality-Adjusted life year (QUALY). As reported by TIME in the article “Q&A: How Much Is A Year of Life Worth?“:

A QALY scores your health on a scale from zero to one: zero if you’re dead and one if you’re in perfect health. You find out as a result of a treatment where a patient would move up the scale. If you do a hip replacement, the patient might start at .5 and go up to .7, improving by .2. You can assume patients live for an average of 15 years following hip replacements. And .2 times 15 equals three quality-adjusted life years. If the hip replacement costs 10,000 GBP to do [about $15,000], it’s 10,000 divided by three, which equals 3,333 GBP [about $5,000]. That figure is the cost per QALY.

NICE has the power to dictate what procedures and drugs practitioners can provide in the UK’s socialized health care system. Doctors don’t even have the option of utilizing medications and procedures no deemed cost-effective by NICE.

Photo by
Jose Goulao

While entirely cold and impersonal, NICE and the QUALY have taken hold in the UK health system, but would they help curb rising health care costs in the US? People in the US can expect to die, on average, six months earlier than Britons, and health spending per person in the US is double the amount spent in the UK. Responding to skyrocketing costs, President Obama, through the recent stimulus bill, gave $1.1 billion to the Health and Human Services Department for research regarding cost-effectiveness of treatments addressing the same illness.

As health care spending threatens to take over the entirety of the national budget over the next 20 years, cost control could become a necessary evil. Blessed by the age of endless resources, my friend of a friend received an extra 10 years to spend with his wife and young children. Assuming a QUALY of 1, this was at a cost of $1,000,000 USD per QUALY. If he lived in the UK, he would have never received the treatment that prolonged his life.

Additional Reading:
The Health Care Blog — Rationing — how will it be spun?
The New Age Blog (New York Times) — How Old Is Too Old for Lifesaving Surgery?
The New Age Blog (New York Times) — Rationing Health Care