Bernie Madoff, M.D.
Is the recession good for your health?
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Bernie Madoff. Angelo Mozilo. Hank Greenberg. These guys, it is generally agreed, will go to hell for leading the United States into its worst economic downturn since the Great Depression. But if Stephen Bezruchka is right, they may go to heaven instead for achieving, at least temporarily, the twin goals of health care reform.
The health reform bills passed by the House and Senate have two principal purposes: to improve Americans' health and to lower health care's cost. The final bill that emerges after House-Senate negotiations will likely achieve this first goal (at least insofar as it makes medical treatment more widely available) and fumble the second (though not so badly that the measure, which will include offsetting taxes and cuts in Medicare spending, adds to the budget deficit).
But thanks to Madoff, Mozilo, and Greenberg, the recession that began after December 2007 (and which may or may not be over) has already achieved that second elusive goal. And according to Bezruchka, there's a good chance it will also achieve the first.
Let's start with costs, where the data are less surprising. In 2008, total national spending (public and private) on health care grew by 4.4 percent, according to a new study by the federal Centers for Medicare and Medicaid Services. Four and a half percent was a pretty high spending growth rate compared with that for other goods and services in 2008. (The overall inflation rate was zero.) But the 2008 rate is low compared with health care spending growth in earlier years. (Health spending grew 6 percent in 2007, 6.6 percent in 2006, and 7.9 percent in 2005.) Private health insurance premiums grew a mere 3.1 percent in 2008, the smallest increase since 1967. The study's authors conclude that, while health spending is typically insulated from economic downturns, the recession that began in 2008 was severe enough to have an immediate and significant dampening effect. That was true even though federal health care spending grew unusually fast in 2008 (8.6 percent for Medicare, 8.4 percent for Medicaid).
This study led me to wonder about what I presumed to be the other side of the equation. A bad recession might have a salutary effect on medical inflation, but wouldn't it also worsen Americans' physical health? Yet in searching for evidence of this seemingly obvious conclusion, I discovered instead this article in the Sept. 1, 2009, issue of the Canadian Medical Association Journal—that's right: Canada, socialized-medicine paradise!—arguing the opposite. According to the author, Stephen Bezruchka, a medical doctor and senior lecturer at the University of Washington School of Public Health, economic downturns were, during the 20th century, "associated with declines in mortality rates."
Maybe I'm reading this wrong, I thought. I read on:
In terms ofbusiness cycles, mortality is procyclical, meaning it goes upwith economic expansions and down with contractions, and notcountercyclical (the opposite), as expected. So while most nationsenjoyed sustained declines in mortality during the last century,the pace of the decline has been slower during economic boomsand greater during so-called busts. The first rigorous studiesdemonstrating this trend have appeared only in the past nine years,although the concept is not new [italics mine].
Indeed, the concept isn't even controversial. "There is a pretty broad literature on this," MIT health economist Jonathan Gruber e-mailed in response to my puzzled query, "and the consensus seems to be that recessions are good for health."
Before proceeding, two caveats.
Timothy Noah is a former Slate staffer. His book about income inequality is The Great Divergence.