Deaths of Despair: An Indictment of the US Healthcare System

The coronavirus pandemic has overwhelmed the recent global health debate. But worrying developments were occurring in America even before the virus appeared. And those developments are brilliantly outlined in the recent book by Anne Case and Angus Deaton: Deaths of Despair and the Future of Capitalism. This book is a genuine must-read when you are whiling away those long hours of quarantine. It is also relevant to the discussion of whether the economic shutdown will cause more deaths than the virus.

The book builds on previous work by the two economists which focused on the sudden rise in mortality among middle-aged white Americans. Indeed, the trend is so substantial that American life expectancy as a whole declined for three successive years after 2014. Having peaked at 78.9 years in 2014, life expectancy fell to 78.6 in 2017 before improving slightly to 78.7 in 2018. Those figures are well below life expectancy in Italy, Spain or Australia, at around 84 years, or the UK at 81.8.

The only precedent in modern times for such a decline in American longevity was the First World War and the Spanish flu. And the authors focus, in particular, on what they call “deaths of despair” — those resulting from alcohol abuse, drug abuse and suicide. Deaths of despair among American men and women aged 45 to 54 rose from 31 per 100,000 in 1990 to 92 in 2017.

What makes the trend all the more remarkable is that the US spends such a big proportion of its GDP on health. But the authors believe that this is not a coincidence. “We believe that the healthcare system is a uniquely American calamity that is undermining American lives” they write, adding that the industry is “a cancer at the heart of the economy, one that has widely metastatised, bringing down wages, destroying good jobs, and making it harder for governments to afford what their constituents need.”

The worst effects have been seen among white Americans without a degree. They are three times more likely to succumb to deaths of despair. But reduced longevity is only part of the issue. “The widening gap between those with and without a bachelor’s degree is not only in death but in quality of life” the authors write. “Those without a degree are seeing increases in their levels of pain, ill health and serious mental distress, and declines in their ability to work and to socialise. The gap is also widening in earnings, in family stability, and in community.”

African Americans still have a worse time of it, in general, with a life expectancy of just 75.4. But the trend for them has been improving, while that of less-educated whites has been deteriorating. From 1970 to 2000, black mortality rates declined by more than those of whites, and they fell in the first 13 years of the 21st century while those of working-class whites were rising.

So what explains the deterioration? The authors trace the change in trend back to 1999, when the problems started to emerge: they estimate that 600,000 additional Americans would now be alive had the previous trend continued. Between 1999 and 2017, there were mortality rate increases for whites aged 45 to 54 in all but six states, with West Virginia, Kentucky, Arkansas and Mississippi the worst, all states with lower than average education levels.

A significant part of the problem is deaths from opioid abuse, which reached 17,087 in 2016, before dipping slightly in 2017. They comprised a quarter of all drug overdose deaths. The cumulative total of drug abuse deaths from 2000 to 2017 was greater than the total of Americans who died in two world wars.

In part, this stems from the legal prescription of opioids such as Oxycontin (also known as hillbilly heroin), approved by the Food and Drug Administration in 1995, and Vicodin, approved back in 1983. The body can build up a tolerance to opioids so that even higher doses are needed to get relief, or pleasure. “Many of those who have followed the opioid scandal see little difference between the behaviour of the legalised drug dealers and the illegal suppliers of heroin and cocaine who are so widely despised and condemned” Case and Deaton write.

An even more dangerous drug is fentanyl, which is 50–100 times more potent than morphine, and largely used illegally. There has been a surge in deaths from fentanyl since 2013, and this has affected African-Americans as well as whites. Fentanyl may have been responsible for three-quarters of the increase in midlife African American mortality after 2012.

In a sense, we are repeating the mistakes of the Victorian era. In the late 19th century, Bayer synthesised and marketed heroin as a nonaddictive substitute for morphine. Heroin was given to children to get them to go to sleep. But the mistakes are less forgivable now because our knowledge is so much greater.

Other factors play a part in this longevity decline. In 2017, white American adults (25 and over) with a high school degree or less were four times more likely to be smokers than those with a bachelor’s degree or more. A third of whites without a bachelor’s degree were obese in 2015, compared with less than a quarter of those with the qualification. Those with a bachelor’s degree were also taller than those without by about half an inch on average — a reflection of better childhood health and nutrition.

Case and Deaton knock down some alternative explanations for the mortality increase. There was no increase in poverty to match the timing of the epidemic. Official poverty counts were falling through the 1990s as the epidemic was getting under way. There was a slow rise in the early 2000s, and then a rapid rise in the Great Recession, followed by a decline. This looks nothing like the pattern of deaths of despair which showed a steady rise throughout the period. The fraction of white non-Hispanics living in poverty was less than half that of African-Americans but the latter were exempt from deaths of despair until 2013.

Nor can we blame the financial crisis of 2008 and its aftermath. There was no jump in deaths of despair after Lehman Brothers crashed and unemployment doubled. There has been no epidemic of deaths of despair in Europe. Between 2007 and 2013, while unemployment rates in Greece and Spain more than tripled, life expectancy was rising more rapidly than in most other European countries.

That finding is in line with other research that shows there mortality does not necessarily rise in recessions, a point worth noting when people are arguing about the death toll resulting for the quarantine measures imposed by western governments.

Nevertheless, America does seem to have developed into a nation of two tribes, determined by education. The well educated move to successful and innovative cities that have good jobs, good schools and entertainment, while the less educated are left behind in the countryside, in small towns, in stagnant or decaying communities.

The proportion of whites aged 40–50 who said they were “not too happy” was stable until the late 1990s when it started to rise. But there was no change in this measure for those with a degree. Instead there was a sharp rise in unhappiness among those without a degree. Marriage rates have also bifurcated. In 1980, 82% of whites with or without a bachelor’s degree were married at age 45; by 2018, it was 75% of those with a bachelor’s degree but only 62% of those without.

The healthcare system plays a part in this divide. The cost of healthcare averages $10,739 per person. While employees don’t pay this cost directly, the amount that employers pay in premiums affects how many workers they employ and the wages they pay. These high costs stem, in part, from the structure of the US healthcare system. The incentives for both providers and patients to spend raise the cost of provision beyond what patients would be prepared to pay, if left to their own devices. Hospitals that are local monopolies charge 12% higher prices than hospitals that face competition. In 2017, US hospitals spent $450m on advertising, money that added to the cost of patient care.

The authors estimate that costs could be cut by a third without compromising American health. The fraction of German income spent on reparations after World War One was substantially smaller than the fraction of American income that is spent unnecessarily on healthcare today.

What is the solution? Case and Deaton say the exorbitant cost of health insurance is down to rent-seeking, the term used by economists to describe “wealth obtained through shrewd or potentially manipulative use of resources”. So the government needs to step in to enforce antitrust provisions in the healthcare sector. The US also needs a more generous welfare state in an era of globalisation. Countries that are more open to trade have more generous social systems because the benefits of trade cannot be fully realised if workers have nothing to protect them if globalisation causes jobs to be reallocated.

It is a powerful and well-argued book, and I have only been able to give a succinct summary here. I urge anyone interested in healthcare or the American economy and political system to read it.

Economist columnist, opinions generally my own, typos always my fault. Author of Paper Promises, The Last Vote and The Money Machine

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