Does $2,000 save a life? Conditionally, yes

Tim Costello’s response to the Coalition’s aid cuts was grist to the fact-checkers’ mill. He said the $4.5 billion to be cut from the aid program between this year and 2016-17 will cost 450,000 lives because it costs around $2,000 to save a life. He had made a similar statement in relation to earlier cuts by Labor, as had Oxfam International last year (though with a €1,000 price tag) in response to the 2012 fall in OECD aid. The ABC’s fact-checking unit duly mobilised and reached this verdict: ‘Mr Costello’s claim is not credible’.

Actually, it is conditionally credible. Conditionally because its truth depends on that of a prior claim by the Global Fund.

World Vision Australia told the ABC they based the $2,000 figure on two numbers in the Global Fund’s results report for 2011 [pdf]. The Global Fund states that it has spent a total of $13 billion over the period 2002 to 2010 and also claims responsibility for saving 6.5 million lives over the same period. If the latter claim is true, it is quite definitely true that it costs $2,000 to save a life. (Actually, based on numbers in the most recent [pdf] results report, for 2012, the price has dropped to $1,800.)

Given the information that about one-fifth of Australia’s aid falls under the ‘saving lives’ strategic objective, and the numbers above, arithmetic alone yields the conclusion that $4.5 billion could have saved 450,000 lives.

An important qualification here is that the Global Fund’s claim relates to lives saved through three specific interventions: antiretroviral therapy for HIV/AIDS, DOTS (the basic package that underpins the Stop TB strategy) and the distribution of insecticide-treated nets to prevent malaria. In other words, it costs an average of $2,000 to save a life by means of these interventions. This doesn’t fundamentally alter Costello’s point.

The ABC contacted the Global Fund for comment. Strangely, a spokeswoman said:

No dollar value can be put on an individual human life.

Far more important than any estimate of the number of lives that can be saved is the broader impact of good health that spreads through every affected family, community and nation.

That is more real than any numbers can show.

The second and third sentences are certainly true but the first is disingenuous. By claiming responsibility for saving 6.5 million lives through its expenditure of $13 billion, the Global Fund has in fact put a dollar value on an individual human life, and it’s $2,000.

What really cries out for checking, while being quite safely uncheckable, is the claim that the Global Fund was responsible for saving 6.5 million lives. This is of a piece with claims made in the former Australian government’s Comprehensive Aid Policy Framework—that Australia would, by 2015-16, vaccinate more than 10 million children, have more than one million additional births attended by a skilled birth attendant, provide more than 8.5 million people with increased access to safe water, and so on.

There’s a lot of pressure to produce numbers of this kind and, once they’re abroad, it’s futile to hope they will be used with caution.  The interesting thing is that much of the pressure to speak in terms of quantified aid results comes from those with a disposition to question and cut aid. When they do cut, the arithmetic turns against them.

image_pdfDownload pdf

Robin Davies

Robin Davies was appointed Head of the Indo-Pacific Centre for Health Security at the Australian Department of Foreign Affairs and Trade in September 2017. Previously, from 2013, he was the Associate Director of the Development Policy Centre and from mid-2014, concurrently an Honorary Professor at the Crawford School at ANU.

2 Comments

  • Thanks Robin and Joel for this discussion.

    The message World Vision was trying to convey was that “$4.5 bn could save at least 450,000 lives based on Global Fund and other health program experience”. Unfortunately in the rush of media interviews the original wording sometimes gets blurred a bit.

    In order to be extra conservative we assumed that only 20% of the ODA would be used to “save lives” and therefore made our calculations based on $10,000 of aid expenditure per life saved. However we were not trying to claim that the planned Australian aid program would save an additional 450,000 lives if it had not been cut by $4.5 bn – just that there are available practical opportunities for governments to save at least this number of lives with $4.5 bn.

    We decided to talk about lives lost, and give an actual number that we thought was conservative and justifiable, because we are concerned that these sort of budget decisions are not just about numbers in a balance sheet. They are literally life and death decisions for the people who cannot afford the simple and cost effective health interventions that have been proven to work across the world.

    While millions of people continue to die from unsupported childbirth and untreated diarrhoea, pneumonia, AIDS, TB and malaria the opportunity to save hundreds of thousands or millions of lives, at very low cost, will be available to aid ministers.

    In addition, in the interests of maximising the effectiveness of Australia’s aid, we believe that it is important to talk more specifically about the cost effectiveness and proven impact of the different types of aid (eg health, economic development, governance etc), different delivery mechanisms (eg multilateral, bilateral, NGO) and comparative need and capacity in each country. It seems to us at World Vision that the current balance is not maximising impact and that a starting point for improvement would be to increase the share of funding going to well proven health programs.

    While we can’t be precise about the number of lives health aid can save, we believe that there is sufficient evidence that $4.5 bn in aid can save at least 450,000 lives by supporting and expanding existing effective programs.

  • Hi Robin,

    Fundamentally, I think that fact-checking regarding the 450,000 kind of misses the point: the aid cuts will have a big impact on what AusAID is able to deliver and that includes life-saving or life-prolonging interventions, education that expands opportunity, agricultural interventions that fill hungry bellies. Whether the figure is 450,000 or 300,000 or something else, is not – to me at least – the crux of the matter. So we shouldn’t spend too much time analysing the figure.

    That being said – I am going to do just that! As you note, the $2000 figure is an extrapolation of Global Fund spending by Global Fund analysis of lives saved. So the $2000 figure represents an extrapolation on analysis based on some GF assumptions – and then assuming that the AusAID cuts will be applied at a consistent percentage to the health sector – and within the health sector to interventions that are equally cost-effective. That represents multiple assumptions. In the absence of specific data from the Coalition on the nature of the cuts, assumptions do have to be made but the 450,000 is hard to validate at this time.

    There are however a number of health interventions that can save lives for around $2000 (or much less) so that figure itself is not inaccurate. For example:
    • “Expanded vaccine coverage is among the most cost-effective programs we’ve considered. In Sub-Saharan Africa, available estimates claim that it costs approximately $14 to fully vaccinate a child and $200 to save a life with this program.”
    • Bednets “cost under $10 each to purchase and distribute (including all costs), and this intervention is generally considered to be among the most cost-effective ways to save lives. We estimate one life saved for just under $2,300 (this does not include other benefits of ITNs).”
    • The World Health Organization has cost effectiveness tables but they are not organised by “life saved” but rather by “disability-adjusted life year saved”.

    If the AusAID cuts are to programs that deliver immunisation coverage (which a good chunk of AusAID health spending does), then the World Vision figure does have some merit.

    I personally wouldn’t use the 450,000 figure as it implies specificity where we have little. But we can all agree that the aid cuts will have an impact on lives saved and hunger and development.

    Joel

Leave a Comment