Health is priceless, but that doesn’t stop economists from pricing it. Cutler, Rosen, and Vijan tell us that, on average, an additional year of life for a 65 year old in the US costs $145,000 in medical care. And that’s for the 1990-2000 decade, so it’s probably higher today.
But health spending produces more than life extension, it also increases the quality of life. In other words, a lot of those $145,000 dollars that Cutler and colleagues said were expended per additional life-year didn’t actually increase longevity. But they may have increased health. Liming Cai estimates that for Medicare beneficiaries 65 years old or older, an additional disability-free life-year costs just $75,000 in health care, or almost half that for an additional life-year. (His estimate is for the 1992-2005 period.)
Of course citizens of other countries get their disability-free life-years cheaper. Still, the US price may be worth it, considering the benefits. Is it? Factor in that, here in the US, you also get access to this.
[Cross-posted at The Incidental Economist]