Insurance companies decide how much a year of your life is worth. The good news is you’re worth more than what most people make in a year, the bad news is – not by much. The tried and true accepted figure of the value of a year of human life is $50,000. So an insurance company looks at its customers in $50,000 increments? Feel special? I’ll bet!
Well Stanford has more good news. They think your year might be worth closer to $130,000. Stanford’s B-school conducted a study of kidney dialysis patients to come up with their figure. I won’t spoil their method so you’ll need to read the article to discover what Stanford thinks of you.
What does this mean for you? Ugh, why are you always thinking about yourself? Selfish reader. If other studies suggest a greater figure like Stanford’s, it could open the door to more expensive procedures being worth it to your insurance provider. The $50,000 estimate is just a benchmark, or estimate that’s used to determine the expense per person. This study could be the first of many prove that benchmark to be wrong. Still not making sense?
Why does my blog get stuck with the slow readers? Since healthcare is such a sensitive subject to you fatties, we’ll talk about something else you might understand – oil. The greasy bald guys that run the Big Oil firms likely have economists on their payroll crunching out figures for them left and right.
Let’s say Exxon has an economist, we’ll call him Dr. No. Dr. No thinks that for Exxon to remain profitable, the average consumer must use 500 gallons of oil a year. Along comes Dr. Evil, an economist at the University of Chicago, and says Dr. No’s calculation may not be accurate. Based on Dr. Evil’s math, consumers only need to use 300 gallons of oil a year to keep the same profitability.
While the number looks different, the calculation is all that changed. The fundamentals that create profit don’t change, just the statistics used to make big decisions did. I look forward to seeing what kind of change this Stanford study might bring to our healthcare system.
By the way, kudos to Time for producing original content!
 By The Weakonomist |
The Weakonomist is the founder of Weakonomics. Clicking the picture of the puppy will tell you more about him. If you like what you're reading consider subscribing to the blog, following him on Twitter, and checking out the related posts below. Please consider a donation if you really enjoy Weakonomics. Also keep in mind that nothing I say can be construed as financial advice. |
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