Many of us rarely ponder what our health and life are worth. It’s often assumed that life is priceless, but that doesn’t do justice to the stratospherically rising health care and insurance costs; in fact health bills are now the leading cause of bankruptcy.
One common way to calculate the value of our life is to use the same equation used by many health care providers. That cost was once $50,000 per year of quality life, according to the international standard for government-run health insurance plans across the globe. This number has been disputed by economists at Stanford and they were able to calculate that a year of quality life is actually $129,000! That is a lot of money for a year of life, but of course: life is priceless!
Calculating Costs with Kidney Dialysis
As a benchmark, economists at Stanford decided to use kidney dialysis for their research. One reason they chose dialysis is because hundreds of thousands of Americans in the United States are kept alive each year through dialysis while waiting for an organ transplant. The other reason is that Medicare has covered this procedure since 1972 without regard for costly innovations in the procedure.
“Assigning a dollar figure to Medicare patients’ lives may sound crass, but such valuations are routine in Americans’ daily lives.” As an economist, you must focus on the supply and demand of the market. In this case, the patients waiting for an organ transplant have a high demand for organs and unfortunately, a low supply of organs. Therefore, kidney dialysis is a temporary, but costly solution to this law of supply and demand.
How Economics Values Your Health and Life
Modern medicine has changed the way we look at life. We are continually trying to look younger, live longer and stay healthy. The only problem is that it is expensive to keep some patients alive especially for those waiting for a kidney. Hypothetically, Medicare coverage no longer can afford to pay $129,000 for hundreds of thousands of Americans each year based on new research done by economists at Stanford.
Some people waiting for an organ would not be able to afford to pay $129,000 a year to stay alive and would say farewell to their family. The miracle of life lies in our ability to receive the health and care that we deserve, when we need it most – all while staying alive, at least until an organ is ready.