Austerity takes a toll

National economic policies that impose harsh cuts on social programs, especially healthcare safety nets, can be lethal, literally. That's the argument made by David Stuckler, a senior research leader at Oxford University, and Dr. Sanjay Basu, a Stanford University epidemiologist, in their recent book, The Body Economic: Why Austerity Kills. Their treatise is data-driven, and some of the facts they present indicate just how deadly an austere approach to dealing with an economic downturn can be. In Greece, for example, where the government has made massive spending cuts, HIV infection rates skyrocketed, suicides rose significantly and there was even an outbreak of malaria.

John D. Thomas, Modern Healthcare's chief of editorial operations, spoke with Basu about the role of political ideology in these situations, the authors' call for the creation of an Office of Health Responsibility and how to stop a recession from becoming an epidemic. Here is an edited excerpt:

Modern Healthcare: The International Monetary Fund, which plays a substantial role in your book, is continuing to admit that its austerity plans may have hurt more than helped in places like Greece. How does that admission make you feel and, more importantly, what should that spur the IMF to do moving forward?

Dr. Sanjay Basu: Indeed, the IMF has reversed course quite a bit not only in Greece, but in the past during the Asian crisis we saw the same thing with the IMF initially recommending austerity and then came out and gave a formal apology because the austerity created both a worse economic outcome and a worse public health outcome. From a public health perspective, what we really need to do right now is preserve safety nets for people. We have had a massive natural experiment where different countries have gone through the same recession but either underwent austerity or stimulus, and the austerity countries have done very badly in terms of public health. But there is some room for hope in preserving safety nets right now, and people are very vulnerable.

MH: How much would you say this entire story is about the weak and the powerless not having the political clout to defy these austerity measures, which are often based on political and economic ideology?

Basu: It's a profound and sad recurring theme in the policy's experiment. The fact of the matter is that everyone agrees the banking system and bank-based decisions created the current recession. And yet, public budgets, particularly those that support the weakest and most vulnerable, are being cut in the name of having bailed out the banks and also in being able to really try to reduce short-term deficits, although it doesn't seem to work over the longer term.

MH: Some of your book actually sounds a bit naïve in that you argue that politics should not be ideological, but driven by data. Is a shift like this really feasible?

Basu: I think many times in history we encounter really remarkable ideologies that seem to fly in the face of data. And my responsibility as an academic is to put the peer-reviewed data out there and hope for the best in the sense that I believe strongly in democracy and informed democracy. And we do see change in the face of data even despite some pretty remarkable politics, and U.S. history is fairly optimistic in that regard.

MH: Similarly, you argue that preventive medicine pays off in the long run economically, but people have known that in this country for years and it is still not a priority.

Basu: It took a very long time for us to get even the Affordable Care Act, and we will see how well it does as it is implemented in the coming years. But certainly, while progress is slow, I do see that we have made great strides in healthcare, and the quality improvement movement has done quite a bit to make our hospitals safer. Our public health movement has done quite a bit in order to improve our continuingly improving food supply, and I do feel like we are making some progress in these regards.

MH: Your book is calling for a nonpartisan Office of Health Responsibility to analyze the impacts on public health of economic policies. What kind of responses are you getting from officials in D.C. about this initiative?

Basu: A couple of countries have implemented this, and there certainly are folks who are interested in the same kind of things here. We started a Consumer Protection Bureau in order to understand how various products are safe or unsafe for us, which is one of the reasons we have seat belts in our cars now.

Similarly, Iceland looks at how its various fiscal and economic policies affect public health. We want economic growth because ultimately it will lead to better livelihoods a lot of the time, but we don't want to pursue economic growth at any cost—that compromises the quality of our cities and our family lives and our own health. So we need to kind of recalibrate and realize what the means are and what the end is in terms of the public health discourse.

MH: The 2009 American Recovery and Reinvestment Act is running out. What are the ramifications if the government doesn't reverse that trend?

Basu: It is a little too early for us to know what the impact is of the sequester, for example, or the end of the stimulus at this point. But in terms of the public health data, we already see another natural experiment taking place between states that have responded by using the stimulus to really help bolster social safety nets and those that haven't.

And so we see the states that have really bolstered their safety net experience have much better public health outcomes already. I would expect that to continue unless we reverse course in terms of our austerity experiment.

MH: You write that “just a few key decisions … can stop a recession from turning into an epidemic.” What are the most important of those key decisions?

Basu: I think the first one is to be careful when experimenting with people, and the reason I say that is, austerity—especially in Europe—has been basically a massive experiment in a sense and one that's failed. And, as a physician, I have the mantra “first do no harm,” so when massively adjusting budget cuts through indiscriminant cutting, which is what austerity is, you are really playing with people's lives, and we have to be much more cautious about that. But there is also very good peer-reviewed evidence about which programs seem to work really well to protect health during hard times and even have economic stimulus side effects or cost savings. For example, active labor market programs, which are a group of programs that help people get back to work relatively quickly by working with both the newly unemployed and their former employers seemed to, as a side effect, reduce alcoholism, suicides and a number of other public health bad outcomes.

MH: What are your thoughts on the limited federal funding available to promote the aspects of the healthcare reform law that increase access to healthcare?

Basu: It is remarkable, and the politics of this are certainly very clear. I think there is quite a separation between those who study healthcare and what actually gets implemented, and there are so many of my colleagues working very hard to try to improve the manner in which things are budgeted. I am hopeful that being more open about this process and revealing to folks what's really going on is going to help get a little bit more sensible in budgeting.

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