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Would You Pay $100K for a Year of Life? by Anne Kreamer

The Mastercard ads say it all - "time with your family or loved ones, priceless." And if any of us were asked if we'd spend every penny we'd earned to save the life of a child or spouse, we'd say (perhaps) without batting an eye, "Whatever it takes, and then some." But unsentimental economists and health care consultants don't agree. And surprisingly, even the average American doesn't necessarily agree.

It turns out, according to a recent piece by Alex Berenson in the New York Times, that the average American values a year of life at between $100,000 and $300,000.

Health care economists derived this number by a variety of means - comparing the cost of dialysis versus blood pressure medicine, the inconvenience and pain associated with sleep apnea versus blindness and something called the standard gamble test.

In the test, "people are asked to imagine having the symptoms of a certain disease - the pain, loss of function and shortened life expectancy," according to Berenson, and then "the people are told that an operation exists that would cure them. But if the operations fails, the patient will die."

The more profound the disease (leukemia, severe diabetes) the more likely it is that the person will choose the risky operation.    And of course, the more severe the disease, the more likely it also will be that the costs associated with its treatment will be higher.

All this matters to each of us because "once they know how to rank the ‘costs' of various diseases, economists can determine the worthiness of a particular treatment." And if the treatment is not deemed worthy, health care won't cover its use.

I understand this from personal experience. When my father was dying in the early '90s of multiple myeloma, a type of cancer, some of the medicines that were used to keep him alive for a few more days costs thousands of dollars a day.

And many of those drugs were experimental (such as monoclonal antibodies) so, although we did not know it at the time, were not going to be covered by his health insurance. I know if you've also been through this situation, the last thing you feel capable of handling when someone you love is dying is deciding if a treatment is "worth" it.

But we don't live in a world with bottomless pockets and in America, land of an increasingly dysfunctional and unjust health care system, the question of who gets what treatment is enormously important.

As our society ages and as health care treatments and technology become ever more expensive, we need to create non-arbitrary and objective means to help us navigate the really hard choices that are coming.

And the health care industry needs to make the judgments and information transparent and available to everyone - before someone gets really sick and emotion clouds the choices we need to make.