Prescription for savings

April 12, 2017

Kimberly Kinchen, business network writer

Adam Coppola Photography

It's a virtuous cycle that may come as no surprise: build bike lanes, and watch health care costs drop. Recent research from the Mailman School of Public Health at Columbia University shows just what a bargain bike lanes can be.

Jing Gu, Babak Mohit and Peter Alexander Muennig wanted to learn whether investing in bike lanes produced better (or worse) outcomes than investing in other health interventions, such as expanding health care services or injury prevention programs.

First, the researchers quantified "If you build it, they will come." The team calculated that the estimated 45.5 miles of new bicycle lanes (protected and otherwise) that New York City built in 2015, at a cost of $8.1 million, increased the probability the people would ride bikes by 9.2 percent. They estimate that the 9.2 percent increase in turn produced future health savings as a result of fewer injuries, better individual health due to increased physical activity, and improved air quality—which improved health for cyclists and non-cyclists alike.

Dollar for dollar, bike lanes compare extraordinarily well to other so-called interventions designed to reduce injury. The researchers estimated gains from bike lanes using a measure called QALY (quality-adjusted life year). One QALY represents one full year of perfect health—think of it as shorthand for how much health a given intervention will produce. The Columbia team estimates a gain of one QALY for every $1267 spent on bike lanes. The cost to gain one QALY from installing drivers-side airbags has been estimated at about $30,000, about 23 times the cost of QALY gained from building bike lanes.

This multi-pronged effect is key to bike lanes' cost-effectiveness. Few other kinds of health care interventions are designed to address health problems on so many simultaneous fronts as bike lanes do. Consider a program that promotes helmet use. More people wearing helmets might prevent some kinds of head injuries, but is not likely to play much if any role in improving air quality or preventing non-head injuries or disease related to lack of physical exercise. Bike lanes are a triple-threat that keeps healthcare costs in line.  

The researchers provide a tool that cities can use to calculate how much savings adding bike lanes could yield. But given that those costs have taken an ever-upward trajectory in recent years, businesses will want to take note of potential savings, too. Companies might want to weigh how well a city sets itself up for biking when calculating the costs of locating there. Or they may want to support the expansion of bike networks in their current location not just to attract millennial talent but also to yield indirect reductions on the company’s healthcare costs through employee benefits. Businesses can also complement their own programs that provide incentives for employees to commute by bike to reap win-win rewards in the form of a more productive workforce that also has lower average healthcare costs. Bottom line: cities and businesses alike can stay ahead of the curve by getting behind bike lanes.

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