We shouldn't only be counting the lives we save from coronavirus. Health versus wealth is a serious question government must answer

Both government and the NHS is used to operating within cost benefit constraints which assign money values to life. It makes no sense to stop that now

Vince Cable
Sunday 19 April 2020 13:49
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New OBR coronavirus UK economy analysis

One of the serious missteps in the government’s handling of the pandemic has been the brusque dismissal of the request of Sir Keir Starmer and others to have a public discussion of the strategy for exiting lockdown.

People might get confused, we are told. Really? People are already becoming aware that Germany and other countries are embarking on a process of opening shops, schools, work-places and will ask why – apart from their better government planning and organisation – the same is not happening here.

At present, the remarkable discipline being maintained in the UK is being sustained on the back of empathy for victims and their families, as well as simple fear. The tragedies of men and women in the prime of life, especially medical staff and those running essential services, leaving young families, is indeed moving and disturbing.

The growing evidence of mass unemployment and extreme poverty is also moving and disturbing and is the inevitable consequence of closing down the economy to save lives.

It is right and necessary that we try to make the trade-off as rational and evidence-based as possible. Much as it is a cliché to say you cannot put a value on human life – and some consider talking about the economic value of lives to be tasteless or even immoral – arriving at such values is actually something we do routinely as a society and as individuals.

We like to think of the lives of our loved ones or ourselves as having infinite value. Religion teaches us that life is sacred. But that is not how we behave. We all take risks. That can involve a hazardous job: for example mining, fishing, soldiering, building, or a hazardous hobby (free climbing; base jumping; even my rather basic skiing and cycling). We go so far as to put a money value on our lives and families in the form of life and accident insurance premiums. We pay, or not, to reduce the risk of dying: buying a more expensive car with automatic emergency braking; flying with a safety-conscious airline; acquiring high-vis cycling gear.

The monetisation of the value of life is embedded in government decision-making as around health and safety regulations and environmental standards. Usually that involves a civil servant or economist calculating the cost to the economy of the regulation set against the value of lives (or serious injuries) avoided. MPs clamour for environmental or regulatory impact assessments to ensure that policies are rational and proportionate. And we all make fun of “elf and safety” when the costs seem to exceed the benefits.

Something as mundane as railway crossings or bridges over motorways will involve someone in the Department of Transport making an estimate of the VPF (value of prevented fatality) or the VSL (value of a statistical life). Crucially, such cold-blooded calculations are also made inside the NHS.

The key concept used to evaluate the cost effectiveness of drugs by NICE (the National Institute for Health and Care Excellence) is the QALY: quality-adjusted life years. This tells us not how many lives are “saved” – a meaningless concept in scientific terms – but how many years of life are secured through a new drug or other intervention. It also adjusts for the fact that the quality of life may be impaired after treatment, rather than a complete return to good health. The NHS is reported to take the value of one QALY as £60,000 though there are claims that in fact its screening criteria are more severe, perhaps half the official figure. I am told by NHS insiders that more informal (and arbitrary) measures are now used but, however done, the NHS is used to operating within cost benefit constraints which assign money values to life.

We can, in principle, apply these concepts to the now-extended lockdown and begin to make a stab at assessing costs and benefits. We can already see the outline of the economic costs. If the ONS is approximately right and there is a fall in GDP of 35 per cent in the April-June quarter, followed by a sharp “V-shaped” recovery, we could be talking about a GDP fall of 10 to 12 per cent over the year. It could be much worse if the recovery is delayed or aborted.

But let us assume that order of magnitude. We are looking at a cumulative loss of income of £200bn to £300bn. And even this ignores the indirect costs of keeping a population of millions confined to a small space for some time, the waste of potential and the loss of human capital as education and training are impaired and jobs disappear for good.

The poverty and hardship currently being experienced are immense – and mostly shouldered by people who are vulnerable, but not in the terms defined by the pandemic.

The benefit of a successful lockdown is a cut in the UK death rate from the Imperial College estimate of 500,000 without controls (which some thought excessive) to a much lower number – approximately 100,000. But these lives saved are not immortal. We need an understanding of the life-years saved.

There is a picture emerging from other countries of the age profile and health condition of victims. The Italian data tells us that something like 87 per cent of deaths, there, were of over seventies. So far in the UK, the ONS records that 80 per cent of Covid-19 deaths here are among the over seventies. The WHO-China Joint Mission confirms that death rates amongst patients with Covid-19 are much higher for older age groups (15 per cent over 80; under 1 per cent below 60).

In the absence of more precise data we can assume that the median UK victim is 70. The life expectancy of a typical 70-year-old male is about 10 years (for women it is slightly higher) though the indications are that victims are significantly less healthy than the average with a variety of conditions: so, say five years. Putting all this together the economic benefits in terms of lives extended amounts to around £100bn – far less than the costs, and that is on very generous assumptions. And these figures take no account of the life-shortening effects on cancer and heart patients whose treatment is being deferred to prioritise Covid-19 cases.

I don’t claim infallibility for the numbers. There is a wide range of possible assumptions. Nor do I minimise the sensitivities around the value we rightly attach to the elderly. As an MP I tried to legislate against age discrimination in the NHS which was common and overt, so I am conscious that these profound ethical issues cannot be glossed over.

Yet the government must – and will, eventually – factor in the economics of different strategies, alongside epidemiological advice, and concern for NHS and care staff. Paul Romer, the US economist, has shown the economic merits of testing and tracing: an option pursued in countries with the best record in fighting the virus, but not the UK. It can cut the lockdown from 50 per cent of the population to 5-10 per cent, with massive gains in economic and social terms.

The public knows what it has to do: social distancing and regular hand washing. The government surely knows what it has to do: testing and more testing; then tracing and isolating.

The country needs hope, and there is little on offer in the government’s new “five padlocks” approach to lockdown. It can only come from having a planned, phased, reopening of the economy – including an adult discussion of the trade-offs which follow.

Vince Cable is the former leader of the Liberal Democrats

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