Tuesday, 18 January 2022

Uncomfortable truths about the costs of healthy living

There's a good article in the New Statesman raising some uncomfortable truths about healthcare spending and lifestyle regulation. It mentions some research I commissioned at the IEA a few years ago.

In Britain we talk often of the “cost” to the NHS of people who smoke or are obese – the health support service One Small Step, for example, points out that smoking costs the UK government £12.6bn a year, £2.5bn of which is spent on NHS smoking services. On the same page, however, it notes that “half of all life-long smokers die early, losing on average 10 years of their life”. Given how dramatically health, social care and pension expenditure increases as someone ages past retirement, those 10 lost years actually represent a saving for the taxpayer.

That is an immensely grisly – not to mention heartless – way to look at things. But if your argument is that those who cost more should pay more, it is vital to crunch the numbers. Despite the perception that certain lifestyle choices would save money as well as lives, a Dutch study from 2008 found that smokers and the obese were cheaper to care for over their lifetimes, while research from the Institute of Economic Affairs concludes that: “By dying early, overweight and obese people saved the government £3.228bn in pension, healthcare and benefit payments in England and Wales in 2014.”

The more you think about it, the darker it gets. It is a triumph of medical science that people are living longer and surviving conditions that would once have killed us: someone who three decades ago would have died of cancer at 70 can now have a life-saving operation and live another 15 years. That’s wonderful – but those 15 years of other age-related ailments and potential dementia have a price-tag attached, for the government purse as a whole and in terms of healthcare specifically. Figures from the Nuffield Trust in 2016 published in the Guardian show how health spending in the UK is skewed towards the over-65s: more than £7,000 a year was spent per person on those above the age of 85 compared to a national average of £2,069, with an 85-year-old man costing the NHS seven times more than a man in his thirties. Miraculous but expensive new drugs compound the challenge. The unpalatable truth is that, above a certain age, the most costly thing someone can do in terms of burden to the NHS is to keep living.

There is no 'obesity timebomb'. 'Unhealthy' lifestyles do not pose a threat to the NHS or any other health system. What we have in the UK and around the world is a pensions timebomb and an ageing population putting unprecedented pressure on health and social care. Nobody in politics or the media knows how to address this and so disfavoured minorities are used as scapegoats to take our minds off it. 
Worthless, economically illiterate estimates of the cost of certain lifestyles are regularly produced (such as this garbage from ASH last week), but for all the talk about 'negative externalities', the reality is that the main economic consequence of people living healthier lives is that everyone has to work for longer before they can retire. Way to go, healthists!

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