In this month’s Health Affairs, leading health economists Dana P. Goldman and Tomas Philipson challenge five myths about cancer care. To the right we have an infographic that explains them very clearly.
The most economically interesting one is the fourth. This appears to challenge the notion that we should be skeptical about paying high prices for therapies that might buy only a short time of good life. (In health-economics, we use terms like Quality-Adjusted Life Year [QALY] and Disability-Adjusted Life Expectancy [DALE].)
The classic approach to these calculations was illustrated by Professor Christopher Conover in a recent article:
…[M]ost of the gains were concentrated in the 35-64 age group, which narrows the plausible range of what the average gain in life expectancy might be. Someone who is 60-64 is 7.3 times as likely to die in a given year as someone age 35-39. The reason this matters is that there are reasonably well-accepted rules of thumb about the value of what’s called a quality-adjusted life year (QALY).
But of course an infant whose life was saved in 1990 had a life expectancy of about 75 years, meaning the real cost was $87,000 per added year of life. In contrast, today’s 50-year-old only has an added life expectancy of 31.4 years, meaning that Massachusetts implicitly spent $106,000 per added year of life assuming the average person who would have otherwise died was 50 years old.
Goldman and Philipson are not quite talking about that scenario, but a similar one. Whatever a person’s age, if a medicine can buy only a few weeks or months of good life, should taxpayers pay for it? I doubt that is a question that can be answered in a socialized system. In a system of private insurance where we did not skulk around avoiding these embarrassing questions, each person could pay for the insurance policy that suited his preferences. I alluded to this in my previous discussion of Dr. Zeke Emanuel’s desire to die at age 75.