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Death, Taxes, and Opportunity Costs

Death, Taxes, and Opportunity Costs published on

They say two things are unavoidable in life: death and taxes. I’d like to propose adding opportunity costs to that list.

In his State of the Union address in January, President Obama announced his support for a “moonshot” researchsotu initiative to cure cancer. “For the loved ones we’ve all lost, for the family we can still save, let’s make America the country that cures cancer once and for all,” the President announced to a hearty round of applause. And deservedly so. I suspect there are few, if any, people whose lives have not been touched by cancer, either suffering it directly or with loved ones.

Since then, I’ve had several friends on Facebook post their support of the President’s proposal and their personal desire to eradicate cancer. Some even arguing we should spend “whatever it takes” to rid ourselves of this horrible disease. But while I empathize with their heart-felt conviction, I can’t help but ask, “at what cost?” And I don’t mean (just) the dollars and cents. Okay, the billions of dollars. I mean the opportunity cost of focusing so many resources on the goal of “curing” cancer.

As an economist, one (should) necessarily asks the question: what is the marginal benefit versus the marginal cost of eliminating cancer. Sounds cold and heartless? Bear with me a minute.

According to the US Dept of Health & Human Services, the National Institutes of Health (NIH) has spent over $5 billion on research and programs related to cancer each of the past five years. The National Cancer Institute shows that amount has been fairly constant over more than the past decade. To this, the President is calling for an additional $1 billion for new cancer research. According to the Center for Disease Control (CDC), cancer is the #2 killer in the US behind heart disease. However, heart disease receives barely 20% of what is already spent in cancer research by the NIH (see the link above), not counting the additional moonshot funding. And the question remains, how much good will an additional $1 billion of cancer research produce?

The simple (and cold) truth is that–contrary to the President’s claim–no amount of spending on cancer research will save lives…it will only change what people die from, and possibly when. Indeed, the fact that cancer is the #2 killer in the US is itself the result of previous medical research that reduced mortality from other (and earlier) causes of death. We have “cured” our way into an epidemic of cancer deaths–because people are going to die of something.

This is made abundantly clear by the World Health Organization (WHO)’s data on causes of death across the globe. On their Q&A page, they explain “the main differences between rich and poor countries with respect to causes of death:”

In high-income countries, 7 in every 10 deaths are among people aged 70 years and older. People predominantly die of chronic diseases: cardiovascular diseases, cancers, dementia, chronic obstructive lung disease or diabetes. Lower respiratory infections remain the only leading infectious cause of death. Only 1 in every 100 deaths is among children under 15 years.

In low-income countries, nearly 4 in every 10 deaths are among children under 15 years, and only 2 in every 10 deaths are among people aged 70 years and older. People predominantly die of infectious diseases: lower respiratory infections, HIV/AIDS, diarrhoeal diseases, malaria and tuberculosis collectively account for almost one third of all deaths in these countries. Complications of childbirth due to prematurity, and birth asphyxia and birth trauma are among the leading causes of death, claiming the lives of many newborns and infants.

In poor countries people don’t have the luxury of living long enough to contract the kinds of cancers that are so prevalent in the US. In fact, no form of cancer ranks in the top 10 causes of death in poor or lower-middle income countries. And from a social perspective, not only are treatments (and preventative measures) for these infectious diseases less costly but the potential benefits are much larger, since reduced mortality among the predominantly young would increase the number of people going on to productive, contributing adult lives…not simply extending lives further into retirement.

Death is unavoidable. The only question is how, and at what age, people will die. Even if cancer is eradicated, people will still die of something. Lives won’t be saved; merely (possibly) extended. And in the case of cancers, extended predominantly at an already-late age. Heart disease will continue to kill many, with stroke, Alzheimer’s, diabetes and who-knows-what-else taking up the place of the various cancers (based on the CDC table). When considering the social value of additional funding for medical cures and treatments, it’s important to think about just how much additional life is being achieved for the amount of money invested.

Opportunity costs are also unavoidable. Focusing additional resources on a cure for cancer takes away resources from other uses, whether those be treatments for heart disease, stroke, Alzheimer’s, diabetes, mental health, or some other diseases or afflictions that shorten life or reduce quality of life; education and job skills training programs; poverty alleviation and remediation programs; environmental issues; or even just leaving the money in the hands of taxpayers to spend on things they want and that create jobs in other sectors of the economy.

It is not an easy trade-off to quantify, either from a practical standpoint or from an emotional standpoint. And my point is not that we should stop funding life-prolonging medical research or even the search for a cure for cancer. But there are trade-offs for any use of resources, even ones that sound so wonderful as eliminating cancer. Failing to take those trade-offs into account–or worse, blatantly and willfully ignoring them–inevitably leads to poor uses of resources, no matter how heart-felt or emotionally appealing those uses may be.


Author’s note: I started drafting this blog shortly after the State of the Union address on January 12, but I’ve been a bit busy the past couple months and not able to blog much (in case you didn’t notice). Even though it’s dated, I figured it was worth going back and finishing up.

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