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HomeCOVID-19What price lockdown? That's the multi-million pound question

What price lockdown? That’s the multi-million pound question


HAS the lockdown saved enough lives to justify its cost? Surprisingly, there is an accepted way to think about this tricky question.

The National Institute for Healthcare Excellence (NICE) decides which treatments the NHS will fund based on an assessment of their value for money. It uses a measure known as Quality Adjusted Life Year, or QALY. It is defined thus by NICE

‘A measure of the state of health of a person or group in which the benefits, in terms of length of life, are adjusted to reflect the quality of life. One QALY is equal to 1 year of life in perfect health. QALYs are calculated by estimating the years of life remaining for a patient following a particular treatment or intervention and weighting each year with a quality-of-life score (on a 0 to 1 scale). It is often measured in terms of the person’s ability to carry out the activities of daily life, and freedom from pain and mental disturbance.’

To gain approval a treatment must give a patient an additional QALY for not more than £20,000 to £30,000. Treatments costing more than this per QALY are deemed too expensive and are unlikely to be funded. In practice the NHS is more efficient than NICE’s upper funding threshold and typically delivers a QALY for around £15,000.

If the NHS can deliver a QALY for £15,000 it is natural to ask: What is the comparable cost of extending a life through lockdown? We can make a quick back-of-the-envelope calculation to compare the cost of lockdown with the cost of the NHS. The comparison is shocking.

The first step is to estimate how many lives lockdown has saved. In reality, we will never know this number, but we can make an educated guess by looking at how different lockdown strategies have influenced the fatality rates of other countries.  

According to the Office for National Statistics (ONS), 41,988 patients in the UK died with Covid-19 up to September 27 out of a population of 67million. This gives a population fatality rate of about 0.063 per cent. Sweden chose not to implement a lockdown and has suffered 5,896 deaths in a population of 10.1million. This gives Sweden a fatality rate of 0.058 per cent. Spain and Italy both imposed stricter lockdowns than our own and their fatality rates are estimated at 0.066 per cent and 0.059 per cent respectively. So despite wildly different lockdown strategies, the fatality rates of Sweden, Spain, Italy and the UK are strikingly similar, suggesting lockdowns had little or no impact on the spread of Covid-19. If so, the lockdown may have saved no lives at all and will therefore fall into that class of policy mega-mistakes which become too big to acknowledge and too big to discuss.  

In doing our calculation, the Swedish experience is so problematic for the UK’s policy that we have no alternative but to ignore it. We shall simply assume the UK’s lockdown has successfully cut the number of fatalities in half. For ease of arithmetic, and to be a little more generous to the lockdown policy, we will round the number up and assume 50,000 lives have been saved. (If you prefer a different number, it is easy to work it through the following calculations.)

The latest ONS data, showing deaths by age group, indicates that the average age of a Covid-19 fatality is 79. The ONS has an online life expectancy calculator which tells us a typical 79-year-old can expect to live another nine years. However, we know most Covid-19 victims have pre-existing co-morbidity conditions suggesting they are unlikely to live this long and are unlikely to do so in full health. So, for our purposes, we will assume the lockdown has saved, on average, five quality adjusted life years, or QALYs, for each of the 50,000 lives assumed to have been saved. This gives us an estimate of 250,000 QALYs saved, in total: 50,000 lives at five QALYs each.  

The next step is to estimate how much it cost to save those 250,000 QALYs. Helpfully, the National Audit Office provides an online running total of the cost of the lockdown. At the start of August the Covid-19 Cost Tracker reported that the government had spent £210billion on its lockdown policies. We can safely assume that figure has already risen and will continue to do so for years to come. So, again for ease of calculation, and to be conservative, we can use a total lockdown cost of £250billion. In all likelihood, the government’s final bill could be twice this figure and the costs imposed on the private sector could easily come to as much again.

A price of £250billion for an estimated 250,000 quality-adjusted life years works out at £1million per QALY. That is 67 times greater than the cost per QALY provided by the NHS. Recall, to get to this figure, we have had to assume 50,000 lives have been saved, while the Swedish data suggests the true number could be as low as zero and we have made no estimate of the number of QALYs lost owing to much of the NHS being effectively closed during lockdown.  

In locking down the economy our government turned off one healthcare system, known to extend life at a cost of £15,000 per QALY, and replaced it with another system which, on a generous assessment, may be extending life at a cost of £1,000,000 per QALY. This amounts to a hyperinflationary 6,700 per cent increase in healthcare costs.

As a healthcare strategy, lockdown fails to meet the government’s own value assessment and does so by an enormous margin.

It is possible to challenge each and every assumption used to reach this conclusion, but you would have to make some heroic alternate assumptions to get to a different assessment.  

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George Cooper
George Cooper
George Cooper is the author of The Origin of Financial Crises.

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