Global Analysis from the European Perspective. Preparing for the world of tomorrow




What is a life’s worth?

Guest author: C. van Rijn

The Corona crisis is one of the biggest problems humanity has had to deal with in a long time. People are dying in great numbers and radical measures are being taken amid this panic and maybe even mass hysteria. It is often said that human life has no price. And yet, human life has a price. This price is determined on a daily basis by health care systems using the incremental cost-effectiveness ratio (ICER). Usually, countries in Europe are willing to pay in between €20.000-€100.000 to extend a person’s life for a year. On the basis of the concept of quality adjusted life years (QALY) it is calculated whether a person with cancer is still entitled to immunotherapy or whether an older person is still entitled to a heart transplant.
To calculate whether the current measures are worth their money, we are going to estimate the gain in life expectancy resulting from the lockdown and compare it with the costs.

To this end we need to know a few things:
a) total costs of the lockdown;
b) how many years of life are likely to be lost without the lockdown;
c) how many years of life are lost even with a well-executed lockdown;
d) how many years of life are likely to be lost as a negative side effect of the lockdown;
The costs per year of life gained by the lockdown are then: a/ (b- c -d).

These calculations seem easy, but they are quite complicated. As an example we take the Netherlands and operate partly on precise numbers, partly on rough estimates. The findings can be extrapolated and applied to any other country.

First the cost. The economic loss according to CPB estimates stands at 1.2-7.7% and that calculated by the IMF at 7.5%. This means in total about €8 billion to €50 billion.
To calculate how many years of life are lost without the lockdown, we need to know the crude mortality rate (CMR) and the infection fatality rate (IFR). Until now, attention has only been focused on the Case Fatality Rate.

It took a disappointingly long time before the first adequate samples were taken to measure the infection mortality rate. Recently the first data have become known in Germany, Austria, the Netherlands and California. If they are correct, the IFR has been up till now between 0.1-1 %, which means that the corona is about 1-10 times more deadly than flu. Let us assume 0.4 %, like in the latest reliable German study.

Let us also assume that 50% of a country will become infected because that’s what usually happens with flu.

For the Netherlands, this would mean that out of the 17 million people, about 34,000 would die. The average age of those who are likely to die is 80 and the life expectancy of an octogenarian – given the comorbidity of this population – is about 2 years. Thus, 34,000 x 2= about 68,000 years of life which will be lost due to the corona in the Netherlands.
The goal of the lockdown is not so much to save lives directly as to flatten the curve of the spread of corona cases so that the health care system is not overloaded. If the health care system is overloaded, people who could otherwise survive with the aid of the respiratory equipment will have to be sent home. With an adequate triage, people with a 10% chance of survival would then be denied hospitalization. Suppose 20,000 people were sent home of which 2,000 could otherwise have been rescued by ventilation on intensive care. Perhaps these individuals would have lived for two more years. However, given the poor quality of their health after hospitalisation, their QALY is estimated to be one year. The lockdown, which prevents overload, makes hospitalization possible and thus saves about 2000 quality adjusted life years.

How many people will die as a negative side effect of the lockdown? We assume that people will become unemployed and go on the dole. Poor people’s life is about 10 years shorter than that of wealthy people. This is because poor people have more stress, unhealthy lifestyle and commit suicide more frequently. Let us assume for the sake of convenience that every year on welfare takes two weeks off a person’s life expectancy. Unemployment could rise to 5%, given what is happening in America. This means that 250,000 people who have been unemployed for 2 years will cause approximately a loss of 20,000 years of life.

Discussion
Some of the numbers are rough estimates. The calculations about mortality are worrying numbers, but the goal was to put things in perspective. An extra comparison can therefore be meaningful. If everyone in the Netherlands quit smoking and lost weight, 1 million years of life would be saved, every year. This is 29 times the number of the expected loss of life years by the corona.
This article does not address the loss of quality of life during the lockdown, the panic amongst the people or the loss of quality of life of people who get unemployed or broke. The quality of dying in an intensive care unit, a lonely painful death, has not been discussed either. Nor has the enormous burden that rests on the shoulders of the doctors who have to choose who is to be treated and who is not. We have mainly been looking at the numbers because sometimes it is necessary to look at the situation like an indifferent accountant.

Conclusions
The costs will be approximately €8 – 50 billion. So even if we do not take into account the negative side effects, the costs per year sustained are between €2000,000 and €125,000,000. This is more than the €80,000 the Netherlands is usually willing to spend for a life year gained. Jugding by the numbers we can ascertain that a lockdown will in the end kill more people than it will save. These estimates conclude that 18000 nett years of life will be lost due to the negative side effects of the lockdown (20.000 poverty caused years – 2.000 corona caused years). One way or the other, people will die, and many years of life will be lost. A lockdown sounds heroic, but is maybe a non-rational strategy with no gain in the end. Unless we want to stretch the lockdown and pray that a vaccine is available much earlier than expected.

One comment on “What is a life’s worth?

  • Gitte Jensen says:

    Thank you for this analysis. I realize that at this stage many case/mortality ratios and raw numbers are ongoing and thus projections for whole of society cost/benefits are subject to revision. Nevertheless it is clear that in many countries a massive panic obsession to completely eliminate deaths from this virus has created a situation where the cure is now far worse than the disease for the longer term general well being of their citizens (social/economic/health etc..). To take one example, the figures from Western Australia (pop 2,6 million) are staggering : So far, since 25 January 2020 : Cumulative Numbers Tested : 34 250 Positives : 550 (1,6 %) Recovered 480 ( 87 %) Hospitalized 18 (3,3 %) of whom just 4 (1,5 % ) remain in ICU. The IFR is 8/550 or 1,4 % but this is widely exaggerated because 6 of 8 fatalities came from pre-infected disembarked cruise ship passengers and air travel returnees who would otherwise have died overseas. If these are discounted the real IFR drops to 2/550 = 0,4 % in line with both Australian and worldwide estimates ( see : https://www.medrxiv.org/content/10.1101/2020.04.05.20054361v1.full.pdf

    Meantime State governments have declared states of emergency, imposed by decree extra-ordinary social and commerical restrictions, banned entry/exit travel etc..all of which are progressively worsening future economic recovery. Massive public debts are accumulating as fiat money is printed ad infinitum and the welfare state expanded to support most every person or business affected by these measures. No body seems to plan or think even two moves ahead as to fiscal and commercial consequences longer term. To cite just one predictable outcome : A massive surge in compensation claims by those alleging PISD (Post-Isolation-Stress Disorder) and I am not joking.

    Reply

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

13 − six =


GEFIRA provides in-depth and comprehensive analysis of and valuable insight into current events that investors, financial planners and politicians need to know to anticipate the world of tomorrow; it is intended for professional and non-professional readers.

Yearly subscription: 10 issues for €225/$250
Renewal: €160/$175

The Gefira bulletin is available in ENGLISH, GERMAN and SPANISH.

 
Menu
More