Mercury Regulation – Good News and Real Cost Savings

Today’s Managing Health Care Costs Indicator is $90 billion

These are power plants likely to be closed by the new EPA regulations.  Click image to enlarge.  Source 

It’s a light week – and in the spirit of the holiday season, the rest of my posts this year will be positive. No more blogging about pharmaceutical company price yields or insurance plan positive selection. No more greedy self-interested physicians or businessmen. No more hopelessly flawed studies that purport to show the magic solution to our health care cost crisis – but really just show data manipulation. 

Just five full days of stories about things that are working!

First up is news from last week, when Washington Post reported that new EPA regulations to limit future mercury emissions will provide between $37 and $90 billion in health benefits by 2016 – and will cost a bit under $10 billion to implement.  The regulations will also save 11,000 lives and prevent 4,700 heart attacks, and 130,000 asthma attacks each year. 

I often talk about how most of the best health care interventions give us QALYs (quality adjusted life years) for a reasonable price, but it’s rare to get QALYs AND actual cost savings.  But this intervention –forcing utilities to shut or substantially renovate some of the oldest and dirtiest coal-fired power plants- -saves money AND saves lives.

And there’s more.  These regulations save money even without quantifying the value of saving children from mercury-related brain damage, or decreasing the carbon dioxide emissions from the exceptionally inefficient plants that will be closed.  The actual societal benefits are even larger than the stated billions of savings.

The stated savings from this regulation:
Avoided Outcome
Savings Range (3% discount rate)
IQ loss from mercury                
$4-6 million per year
Adult premature death
$34-87 billion per year
Infant premature death
$1.4 billion per year
Heart attacks
$900 million per year
Hospitalization for respiratory or heart disease
$40 million per year

It is typical that public health efforts – even those which have a high initial cost – are often cost-saving, while interventions within the medical sphere tend to be cost effective rather than cost saving.   Hoorah for preventing 11,000 deaths per year AND saving money at the same time.

The EPA has an exceptionally good web site explaining savings - and segmenting these by state. 

Four more days of positive news on the way.  Stay tuned.