Taking the Pulse of American Healthcare: Beyond the Headlines
This week we turn the spotlight on healthcare in America, delving deeper than the Senate debate on the Better Care Reconciliation Act to bring you key insights into health policy and outcomes. This blog post will discuss three recent papers, one from our Economics of Global Health edition of 2016 and two from other economists worth taking a look at.
- Deaths of despair?
Case, Anne, and Angus Deaton. Mortality and Morbidity in the 21st Century. Brookings Papers on Economic Activity. Spring 2017.
This recent paper, by highly influential husband and wife economists Case and Deaton, made a huge splash when it was published earlier this year. It further develops upon their joint findings in 2015.
In this new report the pair find not only are educational differences in mortality among whites increasing, but mortality is in fact rising for those without a college degree. Conversely, it continues to fall for those with college degrees.
The decline in mortality from heart disease has slowed and, most recently, stopped, and this combined with rising numbers of drug overdoses, suicides, and alcoholic-related liver mortality is responsible for the increase in all-cause mortality. This is a particularly American issue:
“mortality rates in comparable rich countries have continued their pre-millennial fall at the rates that used to characterize the US. In contrast to the US, mortality rates in Europe are falling for those with low levels of educational attainment, and are doing so more rapidly than mortality rates for those with higher levels of education.”
These statistics should worry us all, particularly in a time where proposed higher health insurance premiums may leave millions with less coverage. But why are so many dying? Case and Deaton suggest the causes can be cumulatively understood as ‘deaths of despair’, proposing “a preliminary but plausible story in which cumulative disadvantage over life, in the labor market, in marriage and child outcomes, and in health, is triggered by progressively worsening labor market opportunities at the time of entry for whites with low levels of education.”
The term used may be criticised in itself — for instance, many drug overdoses are arguably not caused by despair but by misinformation, lack of support structures, or healthcare provision. However, the underlying phenomenon revealed in their data demands urgent attention regardless. The authors note that “this account, which fits much of the data, has the profoundly negative implication that policies, even ones that successfully improve earnings and jobs, or redistribute income, will take many years to reverse the mortality and morbidity increase, and that those in midlife now are likely to do much worse in old age than those currently older than 65.” We must focus on health fundamentals, not just broader growth policies, in order to reverse this tragic trend.
2. The Captain of the Men of Death
Bhalotra, Sonia and Atheendar Venkataramani. Shadows of the Captain of the Men of Death: Early Life Health Interventions, Human Capital Investments, and Institutions. IDEAS Working Paper Series from RePEc, 2012.
Further reinforcing Case and Deaton’s general policy conclusion is an earlier piece by British economist Sonia Bhalotra and American doctor Atheendar Venkataramani. They focus on the scourge of pneumonia in 1930s America, described as the ‘captain of the men of death’, which gives this article its evocative title.
This study uses exogenous variation across cohorts in infant health endowments, driven by the rapid introduction of antibiotics in 1937, combined with historical variation in human capital investments across racial groups. Specifically, they compare the gains from reduced early-life pneumonia of black Americans born outside of the South with those living in the South during childhood. Though this effective econometric technique, and large census data with over 1000 data points, they conclude that the return on treating pneumonia in youth decreases substantially with the intensity of institutional segregation.
Put simply, this suggests that early health interventions are most effective when paired with more general investment in education, health and employment opportunities. They argue that the common neglect in the medical and global health literature of long run and socioeconomic benefits of investments in research and development will have led to persistent underinvestment.
3. The shifting burden of global health
Farlow, Andrew. The economics of global health: an assessment. Oxford Review of Economic Policy (2016) 32 (1): 1–20.
“As in global health itself, while much has been achieved, many challenges and potential achievements await in the field of global health economics.”
In this assessment piece, Andrew Farlow examines the nature health economics specifically. As the disease burden is changing in America and around the world, current health planning must consider what is on the horizon. He discusses how the global burden of disease has been “inexorably shifting (the so-called epidemiological transition) towards non-communicable and chronic conditions — such as cardiovascular and circulatory disease, cancer, and diabetes — which now account for nearly two-thirds of all deaths in the world and an increasing proportion of the suffering.” These trends are not homogeneous around the world, however. Although high-income countries have successfully reduced smoking-related diseases, they have simultaneously exploded in emerging economies.
“There are now about 6m tobacco-related deaths in the world every year — one every 5 seconds. Tobacco is set to be China’s biggest killer (vying with obesity), yet the Chinese government tiptoes around the interests of tobacco companies. Globally, 38 per cent of all adults and 14 per cent of children were overweight or obese in 2013, a rise from 29 per cent and 10 per cent, respectively, in 1980.”
Such challenges, and many more, raise crucial questions about how to design and fund better health systems. Traditional economic tools have previously been applied to health systems, focusing especially on ‘market failures’ such as asymmetric information, economies of scale and externalities. Moving beyond these conventional tools, Farlow recommends the methodology of Smith and Yip (2016) as they look at the bigger picture, focusing on interdependent systems of health provision. “The required combination of five key policy ‘levers’ — the sources and nature of health system financing, organization of the delivery system, provider payment method, regulation, and ‘persuasion’ — are highly interdependent. Armed with this framework, Smith and Yip explain how piecemeal attempts to correct distortions in one dimension will often have unintended consequences in another dimension.”
Finally, Farlow turns his focus to recent waves of data analysis and evaluation, spearheaded by many at the WHO, in government health departments, and in the private and third sectors. He cautions, however, that “data is still weak in many areas, and even if data allows advice to be given, there is no guarantee that those in power will always heed it.”
The future of healthcare will be determined in the policy decisions of today. Take a look at these three papers, and our Economics of Global Health issue here, to be well informed for these debates. Also be sure to check out the OxREP website, and join the debate by following us on Twitter.
