This document provides a critical review of the current "cost-benefit analysis tool" used in the health sector. It argues that this tool values human lives differently based on their income level and country, seeing lives in richer countries as more valuable than lives in poorer countries. This is because the tool calculates the monetary value of a statistical life based on people's "willingness to pay" to reduce their mortality risk, which is determined by their ability to pay rather than true willingness. The document proposes using a "percentage willingness to pay" model instead to address this issue and allow poorer people's lives to be valued equally rather than less.

1. CRITICAL REVIEW OF CURRENT “ COST-BENEFIT
ANALYSIS TOOL” USED IN HEALTH SECTOR.
Researched & Presented by
Dr. Muhammad Arif
MSPH, DipGIS Mapping & Spatial statistics, MBBS,Certf:Biostatistics,FELTP

2. HOW POLICIES,DECISIONS & ACTIONS ARE
NORMALLY MADE IN LIFE?

3. Can the same analogy be applied in the Health
Sector?
• Answer
Yes
Health economists can impact, shape, design & even change a Health
policies with their complicated Cost-Benefit analysis.
IS IT FAIR TO USE THE SAME TOOL IN HEALTH SECTOR?

4. ANSWER: “NO”
Infect “Health Economists” are working off un-ethical frame work,
because the “Cost Benefit analysis” values some human lives more
than others.
Currently “ Health Economists” values more the rich peoples lives over
the lives of poor people.
LETS SEE HOW IS THIS HAPPENING?

5. This is happening because
“Health economists” across the globe link “VALUE OF HUMAN LIFE” to
some “Monetary” ($$$) value.
In the eyes of a Health economist there is a dollar value for every
persons life.

6. According to Health economists:
Each Human life
 In a lower income country is worth about………100,000$$.
In a Middle income country is worth around ……. 700,000$$.
 In High Income country is worth around …… 1500,000 $$.
KEEP IN MIND “ COST BENEFIT ANALYSIS” COMPARES $$$ Vs $$$.
Let us explain it through an example.

7. Suppose you are asked to dump some toxic nuclear
waste & you only have two countries to dump this
waste. Remember wherever this waste is dump the
people of that country will die.
WHAT WILL BE THE ETHICAL CHOICE
IN THIS CASE?
IN COUNTRY “A”
WITH A TOTAL POPULATION OF
20,000 people.
IN COUNTRY “B”
WITH A TOTAL POPULATION OF
2000 people.
WITH NO OTHER CHOICE LEFT OBVIOUSLY ETHICALLY YOU WILL SELECT COUNTRY “B” BECAUSE THE HUMAN LOSS IN THIS
OPTION WILL BE LESS.

8. Now let us thick like a Health Economist.
SUPPOSE THE COUNTRY “A” (WITH 20,000 POP) IS A LOW INCOME COUNTRY SO SAVING THESE 20,000 LIVES
WILL BE WORTH ABOUT= 20,000 X 100,000 $$ = 200 MILLION $$.
& THE COUNTRY “B” (WITH 2000 POP) IS A HIGH INCOME COUNTRY SO SAVING THESE 2000 LIVES
WILL BE WORTH ABOUT = 2000 X 1500,000 $$ = 3 BILLION $$.
Considering $$$ Vs $$$ the economist will dump the toxic waste in Country “A” without
considering the number of lives.

9. How did Health Economists came up with
these numbers?
Each Human life
 In a lower income country is worth about………100,000$$.
In a Middle income country is worth around ……. 700,000$$.
 In High Income country is worth around …… 1500,000 $$.
For this Health Economists use a concept called “WILLINGNESS TO PAY”

10. WILLINGNESS TO PAY CURRENT COST BENEFIT
MODEL IN HEALTH SECTOR
It is defined as
“ Average of how much people in a specific country will be willing to
pay to reduce the average number of deaths by 01”.
Statistically it is denoted by “Value per statistical life”(VSL)
Let us Understand the concept of VSL through an example.

11. VSL example
We go to different countries and we select a sample of 100,000 people
from each country & we ask them
HOW MUCH WOULD THEY BE WILLING TO PAY FOR A REDUCTION IN
THEIR RISK OF DYING BY 01 IN 100,000 OVER THE NEXT YEAR?
We will calculate the average amount each group is will to pay for a
reduction in their risk of dying by 01 …. This is considered as VSL.

12. Further elaboration.
Suppose 100,000 group sample from a country “X” are willing to pay
100$$ EACH in order to reduce the risk of dying by 01 out of 100,000.
So in this case
VSL= 100X 100,000
VSL= 10 Million $$

13. Similarly suppose in an other country “Y” 100,000 group sample are willing
to pay 20$$ EACH in order to reduce the risk of dying by 01 out of 100,000.
So in this case
VSL= 20 X 100,000
VSL = 02 Million $$

14. So
“If you are willing to pay more so YOU value your life MORE so YOUR
life is more valuable”
THIS MAKES SENSE??
“YES”
BUT THERE IS A CATCH IN ALL OF IT (critical thinking).

15. Actually
Your “Willingness to Pay” is determined by your “Ability to Pay”
For Example
If you are “Filthy Rich” and you asked to reduce your chance of death by 0.01% …….. You
could say ……..Hmmm………500$. Because you have so much money.
BUT
If you are poor & you have very little money you may say “05 $” because that is all you
can afford.
BUT
According to the economists since you are willing to pay less hence your life has less
value but in reality you want to pay more but you don’t have money to pay more.

16. In Short
This is how VSL for each country is calculated & this is how Rich people
life has more value compare to poor people.

17. According to “CARNEADES”
USING THE CURRENT “VSL” TERMINOLOGY
Saving
01 American life
is equal to 16 Indonesian lives, 40 Mauritian lives & 166 Malawian
lives.
He further calculates
VSL of an American life is about 9,631,000$$ where as VSL for a single
Gambian it is only 79,000$$

18. Suppose
Two different deadly diseases have hit the world, one affects only
Americans and the other affects only Gambians. More over suppose
both the diseases kill people exactly the same way. But their mortality
rates are different. Suppose in USA the mortality rate from this disease
is 0.003% so it will kill 10,815 people in USA. On the other hand if risk
of mortality in Gambia is 50% so it will kill almost 1,050,284 people.
Now suppose you are appointed as UN Emergency Relief coordinator in
this case and you have limited funding to cure one of the diseases. So a
Professional Health economist you would defiantly save the lives of
10,815 American lives because:

19. Because 10,815
American lives are worth
104 Billion $$.
Where as the lives of 1,050,284 Gambian
People is worth not more than 83 Billion $$.
YOU ARE MORALLY OBLIGATED TO TREAT THE AMERICAN DISEASE IN ORDER TO MAXIMIZE THE BENEFITS.MOST PEOPLE
WILL THINK “THAY SHOULD HAVE SAVED THE GAMBIAN PEOPLE”. BUT THE CURRENT ECONOMIC MODEL USED WOULD SAVE
ONLY THE AMERICAN LIVES BECAUSE THEY ARE WORTH MORE STATISTICALLY BECAUSE USA IS A RICH COUNTRY
IN THE GIVEN CENARIO GAMBIANS WOULD DEFINALTY BE WILLING TO SPEND MORE BUT THEY DON’T HAVE THE MONEY
TO SPEND FOR THEIR LIVES.IT IS NOT THEIR WILLINGNESS TO PAY LESS IT IS THEIR ABILITY TO PAY LESS. POOR COUNTRIES
VALUE THEIR LIVES EQUAL TO OR EVEN MORE THAN AMERICAN LIVES.

20. What is the solution to the current Cost-
Benefit analysis model?
ACCORDING TO “CARNEADES”
Instead of using “Willingness to pay model” we should be using
“Percentage willingness to pay model”.

21. So what is “Percentage willingness to pay
model?”
Suppose
The rich person has 1,000,000 $ in his bank while the poor person has
only 100$ in his bank.
So in this case
The rich person’s absolute willingness to pay cant be more than
1,000,000 $ similarly the absolute willingness to pay for the poor
person cant be more than 100 $ for the supposed 01% reduction in the
mortality rates as mentioned previously.

22. We previously saw
The rich person afford to pay 500 $$ while the poor was only able to
pay 05 $$
According to the “Willingness to pay model” the rich person will be
valued higher because he is paying more.
While
According to the “Percentage willingness to pay model” this changes
completely.
HOW?

23. Using the “Percentage willingness to pay model” the poor person is
willing to paying 05% out of this bank balance (05/100) while the rich
person is only willing to paying 0.05% out of his thick bank balance
(500/1,000,000).
By applying this Percentage model poor people will have the chance
to value their lives equal to or more than rich people.

24. For further details please consult
BOOK
“ARE ALL LIVES EQUAL”
Written by
CARNEADES

25. THANKS