COMMENT:
"Generally it's not something we would do. We don't put a dollar value on people's lives."
That was Health and Education Minister Chris Hipkins, either dissembling or perhaps, like a schoolchild who's been out of the classroom too long, simply ignorant of how it all works in peacetime.
He was answering questions about economist Martin Lally's finding that lockdown cost New Zealand much more than we ordinarily spend to save and prolong life.
Lally's most conservative calculation - based on his highest figures for the death and persistent medical conditions that would have resulted from a mitigation rather than a lockdown policy - found that New Zealand paid $1.58 million for every quality-adjusted life year (QALY) it saved in responding to Covid-19.
He compared that $1.58m to the $62,000 figure recommended to Hipkins' own Ministry of Health to value a QALY. Covid-19 disproportionately affects the old and the sick, so the value of life years is deployed rather than that of whole statistical lives.
Lally's work, which has had several iterations, put the "expected losses from lockdown over mitigation" at $23-billion in lost GDP. The figure attempts to isolate the cost of lockdown itself, and does not include such expenses as individuals voluntarily changing their behaviour or the actions of foreign governments.
The 5700 QALYs Lally estimates would have been lost without lockdown are a weighty consideration. But they are vastly lower than the tens of thousands of deaths the Prime Minister feared at the time of that March decision.
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Advertise with NZME.There is an ironic aside to that $62,000 figure for a QALY. It represents the country's per capita GDP, and is the figure New Zealand's Burden of Disease Epidemiology, Equity and Cost-Effectiveness Programme (BODE3) recommends health policymakers use to value life. Because it is a measure of GDP it bears some relation to what the Government can afford to spend to preserve life; that figure will fall in 2020 in near lockstep with our economic output and policymakers will consequently value life more cheaply.
Lally's isn't the only analysis to weigh the costs and benefits of lockdown and conclude that by the usual measures we've made an extraordinary departure.
Even as lockdown continued in April, work by Dr Bryce Wilkinson, senior fellow at the New Zealand Initiative, suggested that the Government was heavily overspending to save lives.
Testing New Zealand's elimination strategy in this way is critical for many reasons. Chief among them is that we are on the current course almost by accident.
There was no sober moment in March when either the Cabinet or the country considered alternative and even vaguely costed paths. Indeed, the Government's course of mitigation ("flattening the curve") in mid-March changed to the path of suppression in late March (lockdown) which in turn calcified into the elimination path we're currently on. And it relied on epidemiological modelling that appears to have heavily overstated the likely death toll of Covid.
In April, the Treasury produced economic scenarios to help illuminate the costs of suppression/elimination, and work in a similar vein by the Reserve Bank was completed in May.
The strategy of elimination may have become cheaper since then, though the ongoing heavily shuttered border remains a significant expense with no apparent end as does the suspension of citizens' ordinary rights. Lally's work finds a marginal cost-benefit case for Auckland's August lockdown. However, he recommends that in the future lockdown would only make sense if it contained a more deadly disease, or it was applied on a very local scale, or some combination of the two. Mitigation would otherwise be preferable.
Despite this, elimination has become something of a sacred cow. All major political parties assume this path in their platforms for the upcoming October election (the Act Party has come closest to questioning it). And Labour especially, having reaped both international accolades and tremendous domestic support in the polls, will be loath to abandon it.
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Advertise with NZME.That's a dangerous level of political inertia. Absent a vaccine, no politicians have an exit strategy from the current path. Even effective treatment for Covid (some treatments are now helping severe cases) will pose a significant difficulty. How will politicians about face and tell the country that there is in fact a mortality rate they're prepared to stomach?
The answer lies in our tradition of valuing precious human life. The calculations may seem stark but they help to weigh competing goods. And they are born of the moral philosophy that underpins much of our modern welfare state. That thinking has been refined and contested over centuries but it remains essentially this: achieving the greatest good for the greatest number of people.
