A new life or an old life?
One of the fundamentals of economics is also a fundamental of life. It involves cake and eating
Most people know pretty well what actions are needed to make babies. But these technicalities are a necessary condition, rather than a sufficient one to actually produce a new life. For some couples with a desire to have children of their own, that first step is not a straightforward process.
About 1 in 7 couples may have difficulty conceiving. 16% of couples will fail to become pregnant naturally within a year if they have regular unprotected sex, and those who have unsuccessfully tried to do so for more than three years have only a ¼ chance of succeeding in the next year. Many such couples turn to in vitro fertilization (IVF).
Science to the rescue
Thankfully, for British women this intervention is available free of charge through the UK’s National Health Service. But IVF is not a done deal. The chance of a successful treatment falls rapidly with the age of the would-be mother, from 29% for women aged under 35, to just 2% for women over 44.
The age of the first pregnancy for women has been steadily rising (e.g. in the UK from about 26 years in 1974 to 30 years in 2015). This means that more women discover relatively late that they may need to resort to IVF, and hence the number of them seeking the treatment when they’re 35 or older is growing. The average age of a woman receiving IVF treatment in 2016 was 35.5, up one year since 2000.
But recently the treatment has been refused to women over 34 in twelve areas of the UK (and is no longer offered to anyone in a further seven). Not surprisingly, this has been met with protestations. What is going on?
The NHS, the UK’s flagship (at least in the eyes of a sizeable part of the British population) health service, does not have unlimited resources, and funding has been under pressure for years. In one area’s own words, it has “taken into account the relative cost-effectiveness [of IVF] compared to other treatments that could be funded with the resources we have available.” In the UK, the cost of IVF is around £5,000 ($6,500) for one cycle. Of the 68,000 IVF treatment cycles in 2016, 41% were funded by the NHS — a total cost of about £139 million.
That looks like a sizeable amount, but if you compare it with the bill for cancer diagnosis and treatment, it is relatively small: the NHS spends about £8 billion ($10.5 billion) on this. Look at the individual patient expenditure, though, and the picture changes. A woman under 40 is entitled to up to three IVF cycles funded by the NHS. 29% of those under 35 will be lucky and become pregnant in the first cycle. Yet others won’t, and a woman under 35 will, on average, receive 2.2 IVF treatment cycles, with an overall probability of around 65% of getting pregnant. The average number of cycles increases, and the probability of a successful pregnancy decreases as the age of the woman at the time of the treatment is higher, as the table shows.
The key number to look at is the he cost of producing an IVF-baby. This increases rapidly from just over £17,000 for women under 35 to £250,000 for women over 44. For women aged 38 or 39, the cost is already a little more than that of diagnosing and treating a cancer patient, which is £30,000.
The healthcare cake
This is the choice the people in the NHS face: should they spend £30,000 of their scarce resources to fund the treatment of a cancer patient or for producing a pregnancy in a woman aged 38 or 39? Should they prioritize the old life, or the new life?
They can only spend every pound once. They can, as the hackneyed phrase has it, either have their cake, or eat it — but not both.
Those stark trade-offs confronting health decision makers are not always apparent to the rest of us. We are only superficially aware of how healthcare is funded. Our tax and social security contributions are deducted automatically from our income, and we don’t really know what they actually buy. On the other hand, we are used to healthcare being available on demand — without ever having to make a trade-off between having a filling in our wisdom tooth, and having physiotherapy for our sprained ankle. We can have both. So it is not entirely surprising that we wonder why we can’t have IVF and cancer treatment.
Trade-offs — like this one — are a core concept in economics, but not just in economics. The economist Robert Frank argues that in the future Charles Darwin (rather than Adam Smith) may well be seen as the father of economics. Evolution itself is indeed characterized by trade-offs, notably between the benefit of a trait for the individual, and the benefit (or cost) of that same trait for a larger population. He gives the example of the antlers of the male elk. To secure a mate, a bull elk must dominate, and if necessary fight off, a bunch of rivals. The bigger his antlers, the bigger his advantage in stand-offs and combats — and the more likely he will be able to pass on his genes.
But keeping pushy suitors away from his is not male elks’ only concern. They must also be able to outrun wolves. And then the construction on their head, weighing nearly 20 kg, is rather inconvenient, making escaping a hungry pack much harder. So a better chance to procreate for the individual comes at the cost of an increased likelihood of being eaten by wolves — for all bull elks.
Imagine the elks could agree to reduce the size of their antlers by 50%. The relative advantage of the toughest bulls would persist, but they would all be much better positioned to escape a wolf attack.
Of course, elks don’t have that capacity. Most animals don’t even consider multiple simultaneous options, don’t weigh up immediate advantage with benefits in the longer term and so on. They just follow their instincts, fine-tuned over many generations to favour whatever option is optimum for the continued success of the species. Their very existence today is testament to this.
For us humans it is a bit different. Evolution has endowed us with the ability to evaluate costs and benefits of multiple competing options. We can reason about which is the better of a range of possibilities… and we can ponder the question whether we prefer to have our cake, or to eat it.
Unfortunately, that doesn’t give us a quick and easy shortcut to choosing between spending money on IVF treatment, and spending money on cancer treatment — between favouring a new life and favouring an old life. If we had to make that kind of decision in our personal life, it would be a tough call.
And yet so it is for the NHS (or any health insurer). It is not different from the hypothetical dilemma in which you would have a daughter struggling to conceive, and a spouse who is suspected to have cancer, and you have only £30,000 available. You would be able to help one or the other, but not both.
The call is no less tough for the people who need to allocate the scarce, limited resources available for the health of the nation. There are no easy answers.
It is good to remember this, before we start criticizing them for making the wrong choice.
Originally published at koenfucius.wordpress.com on November 9, 2018.
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