By Ed Conway in THE TIMES, 8 January 2021

You can’t put a price on human life. The phrase trips off the tongue and how desperately we would love it to be true. How awful it would be to live in a world where the most precious of all commodities was expressed in pounds and pence.

Except that’s precisely what we do. No one likes to discuss it but in spreadsheets across Whitehall you will find formulae that measure the cost of human life in numerical terms. At the heart of these dismal calculations is the quality-adjusted life year, or Qaly for short.

According to the Treasury, the value put on a Qaly is £60,000. Let’s imagine you have ten years left to live, all of them in good health. In Qaly terms your life is worth around £600,000 — strictly speaking a little less because the number is discounted by 1.5 per cent a year.

Now, before you reach for your calculator to work out your own, let’s consider why this depressing number might be necessary at all. Imagine you wanted to raise the motorway speed limit from 70mph to 80mph. First consider the benefits, for instance the extra productivity generated by getting everyone from A to B quicker. Now consider that higher speed limits might result in more fatal accidents. How to balance those competing arguments quantitatively? That’s where the Qaly comes in: if the cost of those lives lost (or, say, whose quality is blighted by pollution) is outweighed by the benefits, then perhaps raising the speed limit is a good idea.

No one likes to have to contemplate a tragedy, let alone quantify it, yet such things are necessary and Qalys provide the framework. Consider that after we raise the speed limit there are two new road accident victims. One is 85, the other is seven. Both deaths are tragic but are they equal? Surely not, and the merit of expressing those tragedies in Qaly terms is that the value of the child’s life — all those years unlived — is more than that of the 85-year-old.

Why put those lives into monetary terms at all? Why weigh a life against economic productivity? Well, if we really wanted to put life above gross domestic product, we would cut the speed limit on every road to 20mph. Far from devaluing human life, these tools allow us to weigh it alongside economic concerns.

Qalys are used just as often in healthcare, where the going rate for a Qaly is a bit lower, £30,000. Say there is a new cancer treatment which costs £50,000 and could prolong someone’s life by six months. Since that’s only half a year’s worth of live saved, the cost of the life in Qaly terms is actually £100,000: too expensive. Now imagine the drug prolonged someone’s life by two years; suddenly the drug costs £25,000 per Qaly: affordable.

Decisions like this determine how the NHS functions. Except here’s the strange thing: during the pandemic the concept of putting a price on life, or indeed death, seems to have been forgotten. In normal times, public health officials would balance their interventions against that price but during the Covid-19 crisis the costs of combined interventions have been far in excess of the standard “cost of life”.

Quite how far in excess is difficult to calculate since it involves having to make some enormous assumptions, first about how much these lockdowns will end up costing and second about how many lives would have been lost were they not in place. Last summer David Miles, a former Bank of England policymaker, had a go and worked out that the equivalent Qaly implied by the billions of pounds lost during the first lockdown was, conservatively, worth three or four times that £30,000 number used by the NHS. The subsequent lockdowns will have raised that cost yet further.

This is, on the face of it, quite shocking. Why do we deem Covid-19 sufferers’ lives four times more valuable than those of someone with, say, heart disease or cancer? Perhaps it’s because pandemics are different to usual diseases, both in public health and economic terms, and that there is no straightforward trade-off between the economy and health. Had the disease been allowed to let rip, it is quite plausible that parts of the health system would have collapsed, triggering a secondary wave of health and economic effects that could have far outweighed the damage from the coronavirus.

Either way, it’s odd, is it not, that whereas in every other realm of government policy we are encouraged to weigh the costs and benefits in monetary terms, here we are forced to leave it to economists to do it on the back of envelopes. This might not have changed anyone’s minds about whether government was pursuing the right or the wrong course, but it would at least have had the merit of transparency and clarity.

For in the end, all of these decisions involve uncomfortable trade-offs. And even for those who view these lockdowns as largely justified, viewing the world through this prism raises some other important questions.

If, for instance, we are willing to spend so much on Covid, does that mean that we’ve been investing too little on “normal” healthcare in the past? Does this episode mean we should be raising the value of Qalys for all diseases? That would imply enormous increases in the cost of health, for ever. If not, what does it say about the value we put on the lives of those with other conditions?

We may not like the idea of putting a cost on our lives. But it is, in the end, the most honest way to confront the dilemmas raised by this pandemic.

Ed Conway is economics editor of Sky News

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