In 2011 the city of Flint decided to begin sourcing its water from Lake Huron, ending a purchasing arrangement it had with the city of Detroit. In the interim, it began drawing water from the Flint River. This switch was expected to save the city $5 million over two years. However, the city failed to adequately test the river water and neglected to treat the water with anti-corrosive agents, which would have cost only $100 per day, before pumping it into the Flint water system. As a result, the water corroded the city’s many lead pipes, causing lead levels to spike in many Flint citizens’ drinking water.
This attempt to save a few million dollars will likely cost the state of Michigan many times that amount. Michigan Governor Rick Snyder has already requested $28 million for short-term fixes and safety measures which include distributing water filters and bottled water to citizens, testing and replacing fixtures in schools and other high-risk locations, and treating children with high lead levels. Repairing the corroded pipes will cost millions more. A complete fix of Flint’s aging water infrastructure has been estimated to cost up to $1.5 billion. While much of Flint’s water system would have needed to be repaired or replaced eventually, the damage done to the system by corrosive water has certainly accelerated the process.
In addition to the costs of repairing Flint’s water system, the state will be paying for healthcare costs caused by the water crisis for years. Between 6,000 and 12,000 children are believed to have been exposed to dangerous levels of lead. Lead poisoning is especially nefarious in children because it damages their brain development and can lead to permanently lowered cognitive function and learning disabilities. Today, the United Way is estimating that the long-term healthcare costs for the children affected by elevated lead levels in Flint could reach up to $100 million.
The state will be on the hook for much of these healthcare costs. Approximately 40% of Flint’s population lived below the federal poverty line in 2015. People with low incomes are disproportionately reliant on government-funded healthcare programs like Medicaid, or SCHIP for children. Since states cover roughly half of Medicaid expenditures, with the rest coming from the federal government, Michigan could incur tens of millions in healthcare costs due to this crisis, with equal liabilities falling on federal taxpayers.
Finally, some of the children who experienced the worst lead exposure are likely to have long-term learning and behavioral problems. Any special education programs they require will be an additional cost to the state, as education experts estimate that on average, special education costs per student are more than double the cost of general education. In the long-term, the children suffering from cognitive disabilities due to lead poisoning will be less likely to finish high school or attend college, and may see their lifetime earnings prospects permanently lowered, costing the state more in the form of increased welfare spending and lower income taxes.
This is a stunningly bad negative return on investment and highlights the dangers of cutting corners when it comes to basic public health measures. The pharmaceutical industry spends over $100 billion a year worldwide on research and development for cutting edge drugs, and while many of these drugs will be greatly beneficial to their target consumers, their effect on overall life expectancy will be minimal. While life expectancy rose dramatically in the 20th century, from 49 in 1900 to over 78 today, much of this increase was driven by improved public health measures, including clean drinking water. The WHO estimates that for every $1 spent reducing environmental lead hazards, society has seen a benefit of at least $17, and possibly as high as $220. Those returns are much lower now that so much of the lead has been removed from the environment, but numbers like these show the very high value of public health initiatives—and the equally high costs of undoing them.
The Flint water crisis should serve as an example to all states and municipalities looking for ways to improve their budget outlooks. While it can be tempting to try to save money wherever cost-cutting measures are identified, governments should exercise caution with anything related to the foundations of the public health improvements we have achieved over the last century, as the costs of negligence can far exceed any savings that cost-cutting can generate.