Is the economic downturn improving Americans' health?

How to fix health policy.
Jan. 7 2010 7:46 PM

Bernie Madoff, M.D.

Is the recession good for your health?

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Bernie Madoff.
Did Bernie Madoff and other financial saboteurs help boost America's general health?

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.

Bezruchka's findings apply only to wealthy nations like the United States. In poor countries, economic growth decreases mortality rates, just as we expect it would, "by providingthe means to meet essential needs such as food, clean waterand shelter, as well access to basic health care services." (This payoff, however, disappears after gross domestic product rises to a not-very-high $5,000 to $10,000 per capita.)

Also, losing your job remains under most circumstances bad for your health, just as you'd expect. According to one study cited by Bezruchka, "Losing one's job was associated with a 54 percentchance of reporting fair or poor health, and for a person withno pre-existing health conditions, the chances of reportinga new one increased by 83 percent." The message a fired employee often receives—that this is the best thing that ever happened to you (lampooned deftly in the film Up in the Airand in Barbara Ehrenreich's book Bright-Sided: How the Relentless Promotion of Positive Thinking Has Undermined America) is a con devised to reduce the discomfort and/or legal liability of the person or company doing the firing. It is not an accurate or sincere prediction of the ditched employee's true prospects.

Paradoxically, though, during an economic downturn in which a lot of people are losing their jobs, collective health tends to improve.

Some of the Bezruchka's explanations sound so Marie Antoinettish that I hesitate to repeat them with a straight face. He cites a study by Christopher J. Ruhm, an economist at the University of North Carolina who has studied this topic extensively, showing that during recessions fat people lose weight, heavy smokers buy fewer cigarettes, and couch potatoes exercise more. Another Ruhm study shows that, although casual drinking increases during downturns, heavy drinkers reduce their intake so much that the aggregate consumption of alcohol declines. Bezruchka also suggests that having more time on your hands allows you to cultivate friendships, which have been shown to improve health, while working a lot and having little personal time increases your opportunities to experience job-related stress. Babies conceived during recessions tend to be healthier, too.

Why do we find these beneficial health effects when people lose their jobs in a bad economy but not when they lose them in a good one? Bezruchka doesn't offer much here in the way of explanation. Perhaps it's easier to take constructive steps to improve your health when you know your job loss is the result of economic forces beyond your control. Maybe there are more people with whom to cultivate friendships when unemployment is high. Automobile crashes decline during recessions; is that because fewer people are racing to work?

Bezruchka mentions the corrosive effect of economic inequality (globally speaking, high in the United States) on a population's physical health. This point is amply demonstrated by the United States' famously poor ranking (37) on the World Health Organization's international scorecard even though it spends a larger share of its gross domestic product on health care than any other nation. (One reason for the connection may be that economic inequality allows wealthier people to bid up the prices of health services and drugs to the point where they become unaffordable to the unwealthy.) If a recession has the effect of reducing inequality (as may be the case now), that might improve health outcomes.

That isn't Bezruchka's argument. He writes that an economic crisis can improve health outcomes by giving the government a concrete, urgent reason to address the problem of inequality. During the Great Depression, relief spending helped reduce inequality while simultaneously lowering the infant mortality rate. Bezruchka urges the federal government to use social welfare spending in a similar way today, perhaps by increasing spending directly on health care. That, of course, is precisely what the health reform bill will do. Would we have gotten this close to its enactment without the sense of urgency created by the 2008 recession? If not, then maybe Madoff, Mozilo, and Greenberg deserve our thanks.

So E-mail Timothy Noah at chatterbox@slate.com.

Timothy Noah is a former Slate staffer. His  book about income inequality is The Great Divergence.