The Influences of Prevention on the Quality of Life

This research proposes the concept of “utility-adjusted life expectancy” (UALE), which adjusts the lifetime survival function with a more comprehensive utility measure that combines utilities from both consumption and health to investigate the influences of prevention intervention on a population’s well-being. We find that an economy with appropriate preventative healthcare provisions is associated with better human well-being and greater UALE in terms of utility-adjusted life years (UALYs). Based on Taiwan’s experiences, when the share of prevention spending to GDP increases from real 0.27% to 1.19% for growth maximization, the per capita GDP growth rate increases from 3.2% to 4%. Human well-being increases from 26.37 UALYs to 32.57 UALYs. Over all, human well-being increases by 6.2 UALYs. When this share is at 2.03% for welfare maximization, the economy grows at 3.9%, and the UALE increases by 6.65 UALYs. The economy trades a 0.1% economic growth rate reduction for 0.45 UALYs of well-being improvement.