The Edmonton Downtown Bike Grid Will Save Us Millions More Than It Costs – In Health Care Costs

author’s note: I am grateful to Darren Markland and Isabell Hubert for their help in researching this piece

There has been some discussion (not much really) about the cost of Edmonton’s magnificent new downtown grid of protected bike lanes. So let’s talk about it.

The TL;DR version of this post is that, once the downtown bike network is installed, a group of people will choose to start cycling regularly because they are no longer afraid of riding downtown. Those people will be significantly healthier, getting less sick and saving the health care system $13,360,000 every single year after it is built.

Note: Obviously this is a thought exercise.  I am extrapolating the results of studies and making educated guesses. Nonetheless, I think there is merit in exploring the potential ballpark in health care savings about something that is intuitively obvious: bike lanes = healthier people = health care savings.

Shall we dive in?

The Magic of Induced Demand

When high-quality bike infrastructure is built, it causes people to ride their bikes.

Capture

The thing is, scenes like the above are scary to most people. When you replace them with routes like the picture below, the obvious happens: people get out and ride!

Capture

Calgary’s downtown bike grid “created” 2000 new bike riders in less than a year (source).

However, fewer people work downtown in Edmonton than in Calgary (I’ve heard the numbers 200,000 vs 80,000) so fewer new riders should be created by our bike grid. So let’s say that only 500 people start to ride to work in Edmonton due to the new downtown bike grid.

People Biking = Health Care Savings

What are the health care savings of 500 people suddenly deciding to regularly ride their bikes to work or school?

We all know that our sedentary life styles are causing us massive, expensive problems. Unfortunately, few things have worked so far to get people moving more. We’re about to create 500 new bike riders though right?

Diabetes

According to this study, for every 7 people who start exercising 150 minutes/week, 1 incident of diabetes will be prevented.  Our 500 new bike riders could therefore prevent 71 cases of diabetes). Every case of diabetes in Alberta costs about $5,070/year (from here). So the 71 cases less of diabetes that can theoretically be attributed to the bike grid will save $360,000 per year.

Heart Disease and Cancer

A new study came out recently that examined 250,000+ people in the U.K. The conclusion was that cycling to work/school is associated with 46% less heart disease and 45% less cancer  vs. their sedentary peers.

The reduced cases of cancer of 500 new people riding their bikes daily could save the health care system $12.7 million per year. The reduced cases heart disease could save us another $300,000! (calculations/logic are below)

Conclusion

The downtown grid of protected bike lanes  is going to cost about $7.5 million dollars to build. That’s a lot of money. However, they could save our health care system $13,360,000 each and every year after they are installed, for a payback rate of 178%.

You could argue with my numbers.  In fact, I will. I’ll happily lop 44% off of my estimate. That would leave us with an annual savings of $7.5 million dollars. The bike grid will pay itself back in health care savings every year, in perpetuity.

There are so many reasons why the bike grid will be a wonderful addition to our city. The increased safety, the new choice that it gives people who want to save money getting around, and most of all the sheer fun of it. But we can also feel confident that this is the best financial investment in transportation infrastructure that we could make. In fact, nothing else can touch it.


 

The calculations for Cancer and Heart Disease

(1) What is an Albertan’s (or Canadian’s or North American’s) chance of getting Cancer? Heart Disease? Let’s say those are x and y.

Cancer:
Based on information from cancer.ca, 2 out of 5 Canadians (45% of men and 42% of women) are expected to develop cancer during their lifetimes. These are estimates from 2010. This differs from Albertan statistics (from 2012), where 50% of all Albertans are expected to develop some form of cancer during their lifetimes.
Heart disease:
Is the second leading cause of death in Canada; 1.3 million of Canadians have CVD. Note that this is not the same thing as an individual’s chance to get CVD (so not directly comparable to the cancer stats above. This will come up again below in the calculations though, where I think I have addressed this. Also keep in mind thought that the cancer stats are across several dozens of types of cancer.)
So, x (chance of getting cancer for an Albertan/Canadian) = somewhere between 42% (0.42) and 50% (0.5).
And y (percentage of Canadians having heart disease) = around 6.7% (0.067).
(2) How much does it cost to treat Cancer? Heart Disease? Let’s say those are m and n.
In terms of costs to the system, Sun Life, as an insurer, paid out almost $40 million in 2012 for cancer drugs. (And that’s just one insurer.)
I was only able to find an estimate of the national economic burden that was based on data from 1998: “Cancer costs the national economy at least $14.3 billion annually, including $2.5-billion in direct costs for treatment, care and rehabilitation, and another $11.8-billion in indirect costs, principally the loss of productivity from the disability and premature death of cancer sufferers.”
So, over the course of a year, we’d arrive at $40,000,000 ($40 million) in cancer-related annual costs for one insurer, and at 14,300,000,000 ($14.3 billion) for the annual national economic burden caused by cancer.
[This is where the waters get murky as there are no data available on how many Canadians are suffering from cancer currently, or in any given year.]
However, the (age-standardized) incidence rate might help, which is at 389 per 100,000 population. Assuming I understand things correctly, and with Edmonton having 932,546 inhabitants, we can potentially assume that, on average, 389/100,000 * 932,546 = 3,627 Edmontonians have cancer at any given time.
This would also mean, for Canada as a whole, that the $14.3 billion in cancer-related economic impact stem from roughly 389/100,000 * 35,800,000 = 139,262 cancer patients (which I think is close enough to the estimated ~196,000 new diagnoses in 2015 on page 6 here to be believable, taking mortality rates into consideration). This would result in the average cancer patient imposing a cost of m = 14,300,000,000 / 139,262 = $102,684 on the system annually (remember that this includes treatment, care, rehab, and also indirect costs such as loss of productivity). For within Edmonton, this would mean a cancer-related economic burden of 3,627 * $102,684 = $372,434,868 ($372.4 million) annually.
 

For heart disease, there were more directly relevant numbers available (which was already evident in the answer to question (1)): As per this scientific article in the Canadian Journal of Cardiology, the societal costs per year related to cardio-vascular disease total $21.2 billion (1998; I was not able to find newer data). CVD was the most costly disease in this report, eating up 11.6% of all health care expenses in the nation. As 1.3 million of Canadians have CVD, the average cost per year per patient can be assumed to be n = $21,200,000,000 / 1,300,000 =  $16,307. [This seems very low, compared to the cancer numbers above; however, as about ten times as many Canadians have CVD than cancer, the math checks out as far as I can see.]

(3) If 500 more people start riding their bikes to work due to Edmonton’s bike grid, we will save (500 * .55 * x * m) + (500 *.55 * y * n)
As per everything above, for cancer we’d get:
500 * .55 * .45 * $102,684 = 12,707,145 = $12.7 million saved annually.
And for CVD:
500 * .55 * .067 *  $16,307 = $300,456.48 = $300k saved annually.

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