This summer, YHEC welcomed six work experience students into the world of health economics. Their questions reminded me that the next generation isn’t afraid to challenge assumptions that many of us have long accepted. Here are five of the biggest questions they asked, and why they matter for everyone working in healthcare today.

The best work experience students have a remarkable ability to ignore all the assumptions the rest of us have quietly accepted over the years. They ask the questions that everyone else is thinking but is too polite, too busy, or too accustomed to the status quo to ask. These are deceptively simple questions, but they usually uncover some of the biggest challenges in health economics. Not every question was about health economics, of course. We also covered the important topics, like how long lunch breaks are, whether anyone actually enjoys meetings and why everybody has two screens on their desk.

So, here are five of my favourite health economics questions from work experience students, along with my attempts to answer them.

1. “How can you put a price on someone’s life?”

Funnily enough, this was a question that I asked my own undergraduate economics supervisor, and one that got me into health economics. To think about the value of something means first defining what we mean by ‘value’. In 1776, writing his great work The Wealth of Nations, Adam Smith defined value in two different ways: “Value in use” and “Value in exchange”. Diamonds as a commodity have very high value in exchange but have almost no ‘use’ in day-to-day living. Water, on the other hand, though relatively cheap, has infinite value to us. Valuing a human life takes a similar approach. Are we like diamonds or like water? Well, both as it happens, and each approach leads to a different outcome.

If we boiled ourselves down to our constituent parts, we’d find about 0.2 milligrams of gold (worth about two pence), some fairly standard carbon and oxygen and a few other bits and bobs, all totalling around £100.

On the other hand, if we put those elements together in the right way, we actually do stuff – we make things, contribute to the economy, and generally hang around being sentient. The UK government currently thinks that we’re worth £70,000 every year for all of that.

“But that isn’t the NICE threshold?” you might ask. You’re right. The National Centre for Health and Care Excellence (NICE) is willing to approve healthcare interventions for the NHS as long as they cost less than £25,000 to £35,000 per quality-adjusted life year (QALY) gained. However, this value isn’t about the worth of a life year; it’s also about something called ‘opportunity cost’. If the NHS spends money on one thing, it can’t spend that same money on something else. Health economists argue about the exact number, but if something costs more than the NICE threshold to deliver one QALY, then we think that that money would deliver even more health benefits if it were to be spent on something else instead.

That’s the number that health economists tend to base their decisions on. So, we don’t actually put a price on life. We just try to get as much life as we can from the NHS’s budget.

2. “Why can’t the government just print more money if the NHS needs more funding?”

If we printed more money and gave it to the NHS to spend on medicines and doctors, this wouldn’t necessarily increase the amount of healthcare available. Firstly, there is a finite amount of trained doctors and (in the short term at least) there is only so much stock of medicine. Secondly, the new money would flood into the wider economy, causing hyperinflation. This would lead to a crashing of the pound in the world markets and leave the UK drastically worse off when it came to being able to buy medicines from abroad.

3. “If preventing disease is cheaper than treating it, why don’t we just spend all our money on prevention?”

There is little doubt that spending money on prevention delivers more bang for your buck than spending that same money on treatment. Does this mean that spending all of our money on prevention would lead to more QALYs? Well, kind of. But we’d have to pay a huge price in the short term. Millions of people are already ill and need treatment. Even if prevention would lead to more long-term benefits, we have a duty to treat existing people. Also, not all illness is preventable. We’d prevent some things, but many conditions would continue to exist and need treatment. And here’s the slightly gloomy thing: even if we prevented everything that is preventable, we will all die from something at some stage – we would only be putting those costs off into the future, not saving them altogether. My view is that we should be spending far more on prevention, but it’s important to get the balance right.

4. “Why doesn’t the government just make its own medicines instead of buying them from pharmaceutical companies?”

It’s a nice idea in theory. However, medicine is a global business. At the time of writing, the UK’s total GDP is around £4 trillion. The combined value of the top fifty pharmaceutical companies in the word is around £5 trillion. Even if the UK dedicated all of its resources to drug development, it would still be behind the big pharma groups. Developing a medicine takes a long time, too. If a country started a process, it would potentially take decades to see results, whereas existing companies are rolling out new products on a weekly basis. Whilst it’s good to leave this to experts, it’s a valid question as to whether governments could or should have more say in what types of products are prioritised.

5. “Why do we have waiting lists?”

This is an interesting one. On one level, the answer seems obvious: demand for healthcare exceeds the NHS’s capacity to provide it, so some people inevitably have to wait. But it also raises an important question: what do we actually mean by demand? From a patient’s perspective, demand is straightforward. If you’re ill, you want to see a doctor as soon as possible. Because the NHS is free at the point of use, there are relatively few financial barriers to seeking care.

From the NHS’s perspective, however, every appointment, scan and operation has a cost.  The NHS simply cannot meet every request for care immediately. This creates an interesting imbalance. Patients would naturally prefer to receive treatment straight away, but the NHS has limited resources. In economics, when prices aren’t used to ration demand, something else has to. In the NHS, one of those mechanisms is time.

Waiting lists have an economic effect; waiting imposes a non-monetary cost on patients. Some people may decide their condition isn’t serious enough to warrant several hours in A&E or a lengthy wait for an appointment, reducing demand for services.

We can see this effect if we imagine dramatically increasing capacity in A&E (at great expense to the NHS). Waiting times would initially fall, making A&E more attractive to patients who might previously have stayed at home, visited a pharmacy or waited to see their GP. More people would attend, demand would increase, and waiting times would begin to rise again. The additional investment would certainly help more patients to be treated, but it wouldn’t necessarily eliminate queues altogether.

Of course, if waiting lists are too long, this might lead to higher costs in the long run if patients are receiving delayed diagnoses that lead to suboptimal treatment. This balance is one of the key challenges for NHS managers.

None of these questions has a simple answer, but that’s exactly what makes them interesting. Health economics is full of trade-offs, and every decision involves balancing costs, benefits, fairness, ethics and uncertainty. We can never make those trade-offs disappear. In fact, the role of good analysis is to make them explicit, so that better decisions can be made. Our job is to balance competing priorities, weigh evidence and understand the likely consequences of different choices.

The students have reminded me that every piece of research should begin with a simple question.

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At YHEC, asking those questions and answering them with robust evidence is at the heart of everything we do. If you’d like to explore more of our thinking on health economics and evidence-based decision-making, visit our Resources Hub for our latest blogs, research and resources.