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Austerity Kills: Crippling Economic Policies Causing Global Health Crisis

Economist David Stuckler and physician Sanjay Basu examine the health impacts of austerity across the globe in their new book.

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Amy Goodman: Research and development of the pharmaceutical companies.

Dr. Sanjay Basu:  Sure. 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 doesn’t 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 more—we get more incentives in order to test the people who are covered, in order to bill more. And there’s 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 it’s not like a consumer market. If I’m in a car accident, I can’t say to the surgeon, "Hold my hand there for a moment before sewing it back on. I’m 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.

Amy Goodman: I wanted to go back, and this is a theme you follow in The Body Economic, to the Depression. Going back to the Great Depression and the New Deal, this is President Franklin Delano Roosevelt speaking in 1933.

President Franklin Delano Roosevelt: It is three months, my friends, since I have talked with the people of this country about our national problems. But during this period, many things have happened. And I am glad to say that the major part of them have greatly helped the well-being of the average citizen.

In the short space of these few months, I am convinced that at least four million have been given employment, or saying it another way, 40 percent of those seeking work have found it. That does not mean, my friends, that I am satisfied or that you are satisfied that our work has ended. We have a long way to go, but we are on the way.

We come to the relief, for a moment, of those who are in danger of losing their farms or their homes. I have publicly asked that the foreclosure on farms and cattles and homes be delayed until every mortgagor in the country has had full opportunity to take advantage of federal credit. And I make the further request that if there is any family in the United States about to lose its home or its farm, that family should telegraph at once, either to the Farm Credit Administration or the Home Loan Corporation in Washington, requesting their help.

Amy Goodman: That was President Franklin Roosevelt in 1933. I think this is going to be very interesting for a lot of people listening and watching this today. David Stuckler, the choices made then and the choices being made today?

David Stuckler: Completely different. 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 we’ve 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 degrees—the blue states tended to go further with the New Deal than the red states—led 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.

 
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