How much is a human life worth?

A lot of people seem to hate any discussion of costs.  You'll often hear "if it saves just one life, it will have been worth it" but this really isn't practical.  If it was, we'd all be wearing full body armour the whole time, and never driving faster than 10 mph.

I freely admit that I admire capitalism.  I think that markets provide a fantastic way of getting the most bang for your buck, and I'd like to consider how market-based thinking can be used to save more lives.

Consider this completely made up example - you have a hundred people who are ill.  50 of them have illness A and 50 have illness B.  Illness A reduces your average lifespan to 5 years and costs £100,000 to treat, whereas illness B reduces average lifespan to 10 years and costs £50,000 to treat.  Suppose that the average lifespan for one of these people who had no illness would be 40 more years, what is the cost of a life?

Treating Illness A gives you an extra 35 years, for a cost of £100,000 - or £2,857.14 per year.  Treating Illness B gives you an extra 30 years, for a cost of £50,000 - or £1,666.67 per year.

Thus, Illness B should surely get funding before Illness A.

The reason being that the money we spend on healthcare is limited.  It comes from somewhere (the taxpayer's pocket) and there isn't an infinite supply.  In an ideal world (one with infinite energy and resources perhaps) we'd treat everyone that's ill, but in our world we have limited money, and spending money treating Illness A costs 70% more than treating Illness B for the same result.

What I'd like to see is a proper evaluation carried out on the various things that we do, looking at (among other things) quality of life, cost/benefit ratio, success rates, recurrence rates, etc.  Then we can build a picture of what it really costs to treat the various problems that people have, and we can figure out how to spend our healthcare money most efficiently.

Pros: More lives saved for less money spent
Cons: Might lead to bad press

One big problem I can see.  If the system is taken to extremes and every case looked at on it's merit, treatment for the elderly would be seen as considerably more expensive than treatment for anyone else (largely because you don't get that many extra years from successful treatment).  This could be offset either by not breaking it down at an individual level (which is sort of against the whole point of this) or by the government funding part of the treatment (well, if you had Illness B we'd pay for it and that costs £50k to treat, so we'll put £50k towards the cost of your treatment if you can pay the rest).  This would likely encourage private topup insurance.