This article will discuss purely the economic benefit, or cost, of any medical activity, that is not paid for or otherwise imbursed by an insurance company. We will fully ignore any ethical or humane influence.
Please note that we are assuming the point of view from a rich first world person`s perspective, who has got access to amazing medical facilities and has quality insurance. This person is assumed to be of an advanced age, so is unlikely to live for a long time in any scenario. This article therefor assumes that any medical treatment not covered by insurance is either risky (experimental, potentially unsafe) or not based on science. We at Opinion Economics acknowledge that in the real world many highly beneficial procedures fall outside of what is insured for unethical reasons (maximising profit mostly), this article assumes that is not the case.
We already know how much the procedure is going to cost: Full cost of the operation+recovery and added care (medication and such), add to that the likely cost of every complication times the likelihood of that complication to occur. In case of future care, inflation and increased demand for health care, bonus inflation really, should be taken into account. A full FTE nurse may cost 60,000 a year know, that may easily be 80,000 in a few years time. Plus few elderly reduce the amount of care they consume in the long run.
The potential profit is more difficult to calculate, since it requires assumptions and guessing: We have to assume how long the person still has to live, how much they contribute in term of taxes, how much economic activity is still realistic given the medical condition(s). Inflation is also relevant here. There is also the question of how much income is going to be received from labour and how much from welfare (which is actually part of cost as it takes money from tax payers). To make a truly educated guess, the average lifetime of people suffering from the original illness has to be used as a baseline for expected time left on Earth. Increases in wages can be calculated as inflation plus a small bonus (another assumption, but overall wealth has been increasing for decades).
There is one more side: The likelihood of the medical treatment not succeeding, which also carries costs and a small boost to economic activity. A failure to prolong the life of the patient, will result in approximately 10,000 one time expenses (funeral and related costs, such as time not spent working by next of kin), plus a boost in tax collection (inheritance tax). The inheritance is likely to boost the activities of the heirs, but only for a few months, in which they plan and execute those plans, after a spending spree the new scenario becomes normal.
Please note that a low quality of life has only costs: The patient will not be feeling well, likely chained to a bed by monitors or illness, whilst costing a huge amount of money in terms of care provided and resources that could be spent elsewhere.
