Putting a price tag on a human life

The other day, my friends and I were admiring the newly installed Polar Pop machine at the BP station at the corner of Third Street and Indiana Avenue.

Not only does the new machine feature crushed ice, a sorely missed option in the previous machine, but also includes new soda options such as Mug Root Beer and the ever-popular Mountain Dew: Code Red.

Before I digress further, I should clarify that my friends and I have somewhat of a passion for Polar Pops.

Not only have they been a miraculous cure for that Sunday morning hangover, but they are also dirt cheap. For $0.69, you can buy 32 ounces of sugary caffeinated goodness; it’s pretty much amazing.

Now, as we were marveling at the stainless steel workings of the new Polar Pop apparatus, one of my friends joked the machine was worth probably more than the summation of his whole life experience.

And while I don’t necessarily disagree with that point, it did get me to thinking: how much is a human life actually worth?
Most would argue, correctly, that a human life is priceless and should be treated as such. I would agree with that notion on a theoretical basis, as I find it rather discomforting to know that my existence in the world can be outweighed by some finite dollar measure.

In reality, however, human life does have a price cap. In fact, it really isn’t that much at all.

According to a 2008 article in Time Magazine, insurance companies calculate that to make a treatment worth its cost, it must guarantee one year of “quality life” for $50,000 or less.

Medicare, a government-sponsored, publicly-funded health plan that has been in use since the Johnson presidency, also uses the same benchmark.

Roughly translated, that means that your life is worth $50,000 to the U.S. government and most major private insurance companies. That’s about as much as a new, fully-loaded Chevy Tahoe.

This figure comes from a 1984 Canadian study of dialysis patients and their associated expenses over the course of one year.

Dialysis for patients suffering chronic renal failure is the one service Medicare provides for anyone, regardless of age. Many health care economists treat Medicare as a substitute for universal health care coverage, and thus, the value that American society places on one year of life.

However, a new study by Stefanos Zenios and his colleagues at Stanford Graduate School of Business have arrived at a higher figure: $129,000.

The Stanford economists used kidney dialysis again to measure the worth of one year of “quality life,” which translates to two years on dialysis. By accounting for new technological advances in the field and inflation, they arrived at their new figure.

Of course, it is insensitive to assign a dollar figure to the value of human life. But the reality is that we face such evaluations as a part of everyday life.

One example is the “bereavement benefit,” which was been instituted in the United Kingdom in 2001 as part of their social security plan which allocates a one-time tax-free lump sum to widows, widowers or orphans. It’s worth about $3,162.

Another government evaluation of human life can be found in America. The United States government offers a $500,000 “death benefit” to the families of soldiers killed in Iraq or Afghanistan.

This “death benefit” has been the source of some criticism, as it has landed some families in awkward financial situations.

“It’s like winning the lottery, and your relatives all look at you like you’re a cash cow,” said Kathleen Moakler, director of government relations for the National Military Family Association, a nonprofit advocacy organization. “Money makes people do strange things.”

Most for-profit health care insurers routinely use cost calculations as a basis for determining whether or not to award coverage for various ailments and conditions.

While knowing that your life has a price ceiling is rather disconcerting, most Americans are at ease with this reality of life.

In a 2007 survey of New Yorkers, 75 percent of participants felt “somewhat” to “very” comfortable with allowing cost to determine Medicare treatment options, once they understood the concept of the system.  

I suppose I am comfortable with this notion as well, so long as I can keep drinking my delicious Polar Pops.

After all, is life truly worth living without the unbeatable combination of Go-Ape energy soda, Mountain Dew and Orange Fanta? I think not.


E-mail: halderfe@indiana.edu