there have been more than 10,000 additional suicides and up to a million extra cases of depression across Europe and the United States since governments started introducing austerity programs in the aftermath of the economic crisis. In Greece, where spending on public health has been slashed by 40 percent, HIV rates have jumped 200 percent, and Greece has seen its first outbreak in malaria since the 1970s.
David Stuckler and Sanjay Basu talking:
Weve been studying how recessions affect peoples health over the past decade, looking at the Great Depression through the East Asian financial crisis, right through to the present Great Recession. And what we found is that recessions hurt. Unemployment, job loss, foreclosure, unpayable debt are risks to health. But what ultimately matters is how politicians respond. And when they make large cuts to social supports, social protections, they can turn recessions into severe epidemics.
Greece is in the middle of a public health disaster, as you mentioned. To meet budget deficit reduction targets set by the so-called troikathe International Monetary Fund, the European Central Bank and European CommissionGreece has cut its health sector by more than 40 percent. At a time when homelessness is escalating and austerity has further driven up youth unemployment, weve seen HIV infections jump, concentrated in injection drug users. The malaria outbreak was linked to the cut in mosquito-spraying prevention programs, creating an outbreak thats much more costly to control than the short-term money saved by reducing the budget. Healthcare access has declined substantially. The majority of people who have lost access are pensioners who have contributed to the system their entire lives. And these are just a few of the many health effects seen in Greece, mirrored in Spain, Italy and, to some extent, the U.K. and the U.S.
Amaia Egaña. It was a case of Spains eviction suicides. Spain has a system where when peoples homes are foreclosed, even if they default on their home, theyre still liable to pay back the debt. So people are plunged into poverty and arrears at the same time, without support. Weve seen this trigger large rises in suicides. Spain, Italy and Greece are at the high end of increases in economic suicides.
Amaia Egaña was 53 years old. She jumped from a balcony to her death as she was about to be evicted.
One of the major questions we asked here: Is this inevitable during a recession? Recessions are bad times. Could this just be the recessions effects as opposed to austeritys effects? And so, what we did is used so-called natural experiments. We compared regions and countries since the beginning of the recession, and even beforehand, to control for peoples pre-existing conditions, pre-existing mental health and alcoholism and so forth, and also compared areas that faced the same economic shock but had different policy responses. And looking at those as comparative cases, we could find that, in fact, during recessions, inevitably suicides or alcoholism didnt increase, but rather, it was after austerity, in particular. And controlling for other factors that could statistically explain this, austerity consistently came up as a key trigger not just for suicides, but for alcohol, stress-related heart attacks and other major causes of death.
We can look, for example, at Iceland as a contrast. Now, Greece and Iceland are very different socially, politically and economically, but Iceland serves as a nice case in point right now. They had faced a debt at 800 percent of GDP, the largest banking crisis in history compared to the size of the economy.
all three major banks failed. And they had invested, of course, in U.S. mortgage-backed securities. After this, the Iceland politicians decided to do something truly unique as compared to the rest of Europe. They actually put the austerity plan to a public vote. And the public voted that instead of paying off bankers debts immediately through public cuts, they would instead do it gradually. They would still bail out their banks, but over the course of time and with great pace towards preserving their social safety net. And indeed what Iceland ended up doing was maintaining some of the healthiest standards in the world and the highest level of happiness.
a great misunderstanding around debts and deficits. When we face a liquidities crisis, meaning that theres a collapse in demand in the system, we actually find, quite robustly, through peer-reviewed journals and consistent with those of our colleagues, that stimulus early on does not actually produce higher, longer-term debts, but it generates the revenue and the building of the economic cycle that allows us to pay off those longer-term debts. By contrast, these short-term cuts end up so slowing the economic cycle that we find both economic and public health devastation as a result.
Sweden faced a large banking crisis. Unemployment jumped by more than 10 percentage points. And yet suicides fell steadily. What we learned is that when politicians managed the consequences of unemployment well, they were able to prevent a mental health crisis. The specific programs we found are called active labor market programs. These help the newly unemployed link to caseworkers, develop an action plan and return into jobs. They treat unemployment like the pandemic it is. It not only saves money on healthcare bills, but even pays for itself by helping spur economic recovery.
The Centers for Disease Control and Prevention recently revealed the suicide rate in people aged 35 to 64 rose by nearly 30 percent over the past decade, to 17.6 deaths per 100,000. The biggest increase was seen for men in their fifties, where the suicide rate increased 50 percent. Overall, suicides are now a greater cause of death in the United States than car accidents.
what we have found in our research is that these suicide rate spikes seem to correspond quite closely to state-level unemployment rates. And in particular, when we do these long-term studies that track individuals before the recession, during the recession and after, we can control for their pre-existing mental health statistically, and we find that its the new unemployment that seems to trigger new onset of depression and suicide, particularly among our most vulnerable, adults over 50, who, when they lose a job, are often discriminated against or have a very hard time finding new work. Theres a great deal of shame, and also its quite hard for our healthcare system to access those individuals, given the degree of barriers that they have, social barriers, to accessing mental healthcare.
Austerity in health is a false economy. The cliché, an ounce of prevention is worth a pound of cure, is really true. New York City officials learned this the hard way in the early 1990s, when they cut TB prevention programs by $120 million but ended up with a drug-resistant TB outbreak that cost more than $1.2 billion to control. What we found is that smart investments in public health can have a return on investment, for each dollar, of up to $3.
In looking comparatively among OECD countries, European countries,Japan, Australia etc, you see a lot of false claims about the U.S. health system. Why is it that we cost so much more and seem to be getting less?
And you can see a lot of the myths by just looking at the data. So, what are the theories? The theory is, for example, maybe its just American obesity. Well, actually, the costs started well before American obesity and doesnt seem to correspond actually statistically to obesity. Maybe its that we have an older population, but not so. Switzerland actually pays more in nursing home care. Japan has an older population, yet they still pay less while getting more in terms of health. Maybe its just technology. We do a lot of research and development.
But, in fact, if you look at the Securities and Exchange Commission data, the R&D pharmaceutical industry.
While they make a higher percent profit as a percentage of revenue than any other Fortune 500 industry at the moment, they actually spend almost double on marketing as compared to research and development. And while we do use more technology and we do tend to have some higher costs from technology, it doesnt actually explain the majority of the bundle.
What you do see, on the other hand, if you just look at the raw data, is that we get morewe get more incentives in order to test the people who are covered, in order to bill more. And theres a lot of companies making quite a bit of money on that margin. You can go to one hospital across town and be charged double or more of what another hospital has on a different side of town. But its not like a consumer market. If Im in a car accident, I cant say to the surgeon, “Hold my hand there for a moment before sewing it back on. Im just going to go across town and compare prices for a minute.”
So healthcare is a different kind of industry, in which we have what is classically called “market failure” by the Nobel Prize winner Kenneth Arrow back in the 60s, but people ignored his work. I think what we really have is a system where we confuse inequality with choice. The majority of our costs come from common conditions in a small number of patients who have complications of diabetes, heart failure, hypertension. And we need more primary care prevention rather than paying for the ICU care.
Roosevelt took bold steps, at a time when debt was 180 percent of GDP, to boost financial relief to the newly unemployed, to save Americans from homelessness. And weve studied the effects of his landmark program, the New Deal, on health. And what we found is that, comparing the states, the red and blue states, that pushed it to different degreesthe blue states tended to go further with the New Deal than the red statesled to a polarization in public health outcomes across the U.S. The greater relief spending implemented under the New Deal helped reduce suicides, reduced tuberculosis and pneumonias, and was in fact the biggest and one of the most effective public health programs on U.S. soil.
Investing in public health is a wise choice in good times and an urgent necessity in the worst of times. Had austerity been organized like a clinical trial, it would have been discontinued, given evidence of its deadly side effects. There is an alternative choice that we found in the historical data and through the present recessions, that when we place people and their health at the center of economic recovery, it can help get our economy back on track faster and yield lasting dividends to our society.
Down in Bakersfield in California, there was a suspicion about why crows were dropping from the sky and people were also showing up in hospitals. A variety of theories were posited, ranging from polio to heat stroke, but in fact it amounted to a West Nile outbreak that, through a number of our colleagues research, it was found that the abandoned and foreclosed homes had stagnant water in old swimming pools and in other locations that were breeding mosquitoes. And this led to a rather large West Nile outbreak. Indeed, the reason why it was discovered was something called the California Encephalitis Project, a group of public system laboratories that work in concert with the CDC. And ironically, after helping to control that outbreak, they were closed due to budget cuts.
This is a devastating situation were seeing in Greece with a drug crisis escalating at a time when drug prevention budgets are being cut. With gaping holes in social safety nets from austerity, people are becoming desperate, turning to the means of self-harm. Weve seen drug use and infected needles spread HIV, creating rise of more than 200 percent, leading to an epicenter of HIV/AIDS spread in Europe.
What we can learn from these mistakes, and areas where we see successes in policy, is that recessions can hurt, but austerity kills. When politicians make smart choices to protect people during hard times, it doesnt happen at expense of recovery but can help put our societies back on track to a happier, healthier future.
were facing and implementing a large sequester in the U.S. While its too early to see the full health consequences, what we are seeing is the Women, Infants, Childrens health program, which provides nutritional subsidies to women, will be forced to reduce those subsidies from 600,000 pregnant women. And that program has been linked to reducing infant mortality. Were also seeing large cuts to public housing budgets at a time when 1.4 million homes are still in foreclosure. We are concerned that, if done rapidly and indiscriminately, that budget cuts in the U.S. could create a repeat of the disasters that were seeing in Europe.
Coming from the public health field, we have something called the “precautionary principle,” which is that when a idea or policy is controversial, we should first do whatever protects people the most. And what were doing is entirely the opposite. Weve essentially had a massive untested experiment. That experiment has failed, and it sounds like its quite deadly, given all the data through history.
– source democracynow.org
David Stuckler, co-author of the book, The Body Economic: Why Austerity KillsRecessions, Budget Battles, and the Politics of Life and Death. He is a senior research leader at Oxford University.
Dr. Sanjay Basu, co-author of the book, The Body Economic: Why Austerity KillsRecessions, Budget Battles, and the Politics of Life and Death. He is an assistant professor of medicine and epidemiologist at Stanford University.