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The Value of Life

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Submitted By samthom87
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A man who knows the price of everything and the value of nothing.
—Oscar Wilde, definition of a cynic
Isn’t health priceless? Some patients and physicians protest that it’s impossible to measure the priceless benefits of medical care with the crude yardstick of money. Regardless of whether people think it’s right or proper, their actions place a dollar value on human life when they make a decision to provide or deny treatment.
If an 87-year-old patient in heart failure is transferred from a nursing home to a cardiac care unit for 10 days, the physician affirms through his or her actions that living another 6 months in a nursing home is worth more than $15,000.
Immediately discharging this patient with instructions to take four aspirin every
6 hours affirms the physician’s belief that it’s not. Our actions place a dollar value on life, even if we choose not to recognize this fact. We live in a world of scarce resources and must make decisions within these limitations. We use money to place a value on (and a limit on the value of ) health, whether we wish to or not. Perhaps the most important role of economists in the CBA of health care is pointing out this reality.
The task of putting a value on human life is difficult, to say the least. It’s relatively easy to tie specific dollar amounts to goods and services that are traded in the market, such as medical care, work time, drugs, and transportation.
The process isn’t so clear-cut when it comes to putting a dollar value on life and death or pain and suffering. Because there’s no organized market like the New York Stock Exchange for postoperative pain and mortality, economists must find a way to reflect the value that people place on these events. By choosing to buy a car that is less expensive but less safe than another, a person is making an implicit trade between money and the risk of
dying.

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