What Is a Human Life Worth?

President’s Council of Economic Advisers Calculate the Value of a Human Life

President Trump has declared the opioid crisis to be a national health emergency and appears to be developing the rationale for funding interventions to combat the program. The first step is to update the cost of the opioid crisis.

The President’s Council of Economic Advisers (CEA) recently published a report estimating the cost of the opioid crisis in 2015 to be $504 billion.

For that calculation, the CEA estimated the value of a life to be about $10.1 million.

The CEA multiplied the $10.1 million by the number of opioid-related deaths of 33,091 in 2015 to reach the $437.7 billion for the cost of opioid-related fatalities. They then added $72.3 billion for the cost of non-fatal abuse and addiction in 2015 to reach $504 billion.

When we divide the $504 billion figure by the number of opioid-related deaths (33,091), we see that the CEA has assigned roughly a $15 million value to each opioid-related life lost. Since this seems to be the official government value of an opioid-related life (that is, presumably, the amount of money the government would be willing to invest to save a life), we should examine a couple of other areas using the same methodology. This should give us a sense of how the cost of the opioid crisis compares to other health care crises.

Adding the Value of a Human Life to Costs of Other Health Care Crises

According to the American Foundation for Suicide Prevention, there were 44,193 suicides in 2015. The foundation states that the cost of suicide was about $51 billion in 2015, but it is unclear what makes up this cost. If we use the CEA’s value for a fatality alone, the cost is about $446 billion ($10.1 million times 44,193). According to the CEA’s value of a life, this puts the cost of suicides in America about equal to the cost of opioid-related overdoses. Of course, there is some overlap between the two populations, because some suicides involve opioids.

Another stunning statistic is the cost of drug overdoses in general. Drugs include opioids, but they also include non-opioids such as methamphetamines, cocaine, and benzodiazepines. According to the New York Times, the government estimates that there were 64,000 drug overdose deaths in 2016. Again according the CEA the fatality cost only for drug overdoses (which, by definition, does not include the cost of non-fatal overdoses from all drugs) is approximately $640 billion dollars. Of course, this, too, exceeds the total cost of opioid-related overdoses.

Pain, while a separate issue, is closely intertwined with opioids. Its cost, too, is staggering. The national price tag for pain is estimated to be between $560 and $635 billion annually for medical costs and lost productivity. This does not include the cost of premature deaths or suicides from pain.

Suicide rates among people with chronic pain are about 3 times greater than those without pain. We can’t know the exact number of intentional opioid-related deaths classified as unintentional that are caused by undertreated pain, but it is certain there are some.

However, we can make a reasonable guesstimate as to how many suicides are related to pain. Since one in three Americans experience chronic pain, we can extrapolate that one in three of the 43,000 suicides might involve people with significant pain. This might mean there were roughly 14,333 pain-related suicides in 2015.

The Economic and Human Costs of Pain

Therefore, we can estimate the cost of pain in America to be the cost of lost productivity and medical expenses ($560-$635 billion) plus the cost of fatalities (14,333 x 10.1 million = $143 billion) or $703-$778 billion dollars. This is more than two-thirds of a trillion dollars, which is one-and-a-half times the estimated cost of the opioid crisis.

It is even more striking to know that pain-related costs far exceed the costs of prescription opioid-related overdose fatalities (given the fact that most opioid-related fatalities are now caused by illicit drugs rather than by prescription opioids). It is estimated that there were about 15,000 prescription opioid-related overdose deaths in 2015. This is about the same number of estimated suicides that are pain-related (14,333).

How the Institute for Clinical and Economic Overview Values a Human Life

Earlier this year, the Institute for Clinical and Economic Overview (ICER) reported that Abuse-Deterrent Formulations (ADFs) would add $533 million to the cost of health care if they were mandated for extended release formulations. While ICER admitted that ADFs could reduce the number of opioid related overdose deaths by 29%, we can infer that they assigned a value of only $20 thousand dollars to each death.

Assuming that switching to ADFs would lead to about 5,000 fewer fatalities (one third of 15,000 deaths), the value of these lives is $5 billion dollars, or 10 times the cost of mandating ADFs.

Interestingly, the value of a human life depends on one’s frame of reference. Payers such as Centers for Medicare & Medicaid Services and commercial insurance companies may prefer to place less value on lives that could be saved by the use of ADFs than on lives that might be saved by reducing the amount of opioids prescribed. That is evidenced by their willingness to focus on policies that would lower the supply of prescription drugs instead of covering the cost of ADFs.

It seems to me that a human life is a human life. If we remove the political benefits of prioritizing one approach of solving the opioid and pain crises over others, then we can begin to focus on the immutable fact that human lives are worth saving by all available means that are affordable and effective.