Building the cube Marc Fleurbaey Deconstructing the cube Marc Fleurbaey GOOD NEWS AND BAD NEWS • Bad news: there is no simple micro criterion to decide the shape of the cube; it all depends on wider impacts on the population • Good news: we know how to evaluate the situation of a population (or at least there are some ways) WE NEED A SWF (ADLER) • Health affects well-being directly, but also indirectly via capacities: focusing on health effects exclusively misses many benefits • Rate of coverage affects poor-rich access • Population covered affects health and consumption • Services covered too • Mode of funding should be part of the project • The health budget affects consumption of other goods SOLIDARITY MORE THAN INSURANCE (ADLER, VOORHOEVE) • In general, the distribution of individual health and consumption is known ex ante, no macro-social risk (except for longevity and pandemics) • The health system affects the distribution of health and consumption evaluate with a SWF • Peace of mind due to insurance does improve people’s situation, even from the ex post standpoint • A perfect insurance model might not provide a good guideline (Dworkin): People don’t want to insure when harm reduces their marginal utility (frequent with health?) INDIVIDUAL WELL-BEING • 3 dimensions of individual well-being: longevity, health, consumption • There is no way to trade-off these dimensions without relying on population values and preferences • QALYs and similar measures are too restrictive (additive form) • How to elicit preferences? 1) Behavior; 2) Stated preferences; 3) Life satisfaction PREFERENCES Hard questions about: Low longevity (is it better to die as an infant than as a child?) Severe pain: incommensurably worse? Unusual trade-offs: not too complex, but too simple Would you prefer to live longer but poorer (by how much)? Would you prefer a lower health but more income? What about preference heterogeneity? Equivalence approach (Health Economics 2013 –joint with S. Luchini, C. Muller, E. Schokkaert) SWF Some priority to the worse-off Degree of priority hard to specify Sometimes the Rawlsian absolute priority is ok (taxation) For health policy this is dubious Change in population? Probably a good start to study a cohort Ignores new lives created (not clear what the impact on total human population is) RELATION TO CEA • CEA: • Unidimensional measure of longevity-health gains • Can be weighted (O. Norheim: longevity-health weights) • Fixed cut-off or fixed budget • SWF (CBA): • More democratic measure of benefits • More end-state measure of benefits • Weighted by social priority (poor) • Includes non-health benefits (may be essential to convince) • Trade-off between longevity-health benefits and other “consumptions” Conclusion: What are the difficulties? 1. Eliciting preferences on longevity-health-consumption 2. Predicting the impact of expanded health care on population longevity-health-consumption (with feedback effects on growth) Can one do without the SWF? A. Wagstaff: Provide the health care people need At a cost they can afford Focus on most urgent priorities (build-up process) CEA can help but why not go beyond?