Austerity kills?

Excuse the sensationalistic title, but it seemed appropriate. A new publication in The Lancet is out and it's so important that they even talked about it on the radio news this morning. Here's the abstract (full article costs money, though):

The financial crisis in Europe has posed major threats and opportunities to health. We trace the origins of the economic crisis in Europe and the responses of governments, examine the effect on health systems, and review the effects of previous economic downturns on health to predict the likely consequences for the present. We then compare our predictions with available evidence for the effects of the crisis on health. Whereas immediate rises in suicides and falls in road traffic deaths were anticipated, other consequences, such as HIV outbreaks, were not, and are better understood as products of state retrenchment. Greece, Spain, and Portugal adopted strict fiscal austerity; their economies continue to recede and strain on their health-care systems is growing. Suicides and outbreaks of infectious diseases are becoming more common in these countries, and budget cuts have restricted access to health care. By contrast, Iceland rejected austerity through a popular vote, and the financial crisis seems to have had few or no discernible effects on health. Although there are many potentially confounding differences between countries, our analysis suggests that, although recessions pose risks to health, the interaction of fiscal austerity with economic shocks and weak social protection is what ultimately seems to escalate health and social crises in Europe. Policy decisions about how to respond to economic crises have pronounced and unintended effects on public health, yet public health voices have remained largely silent during the economic crisis.

- http://www.thelancet.com/journals/lancet/article/PIIS0140-6736%2813%2960102-6/abstract

Emphasis mine.

For more info, we can go to news articles that include interviews with the researchers in question; here are parts of such an article:

Countering these threats requires strong social protection schemes, researchers argue. But the austerity measures imposed after a string of crises in southern Europe - most recently in Cyprus - has shredded such safety nets.

"There is a clear problem of denial of the health effects of the crisis, even though they are very apparent," said lead researcher Martin McKee of the European Observatory on Health Systems and Policies, a group backed by the World Health Organisation.

"The European Commission has a treaty obligation to look at the health effect of all of its policies but has not produced any impact assessment on the health effects of the austerity measures imposed by the troika."

[...]

McKee said the failure of European governments and the European Commission to face up to the health consequences of their policies was reminiscent of the "obfuscation" of the tobacco industry over curbs on smoking.

- http://biz.thestar.com.my/news/story.asp?file=/2013/3/27/business/20130327085030&sec=business

I'd particularly like to point to the mention of Iceland's - from the EU-policies diverging - approach in the abstract (see above) as well as the news article:

Despite a devastating financial crisis, Iceland rejected austerity, following a referendum, and instead continued to invest in its social welfare system. As a result, the researchers found there had been no discernible effects on health since the crisis.

Iceland's economy has now returned to growth, but the recovery is patchy and inflation has remained stubbornly high.

- http://biz.thestar.com.my/news/story.asp?file=/2013/3/27/business/20130327085030&sec=business

Now, of particular importance for the overall discussion might be the following:

In particular, there is a growing trend for patients to seek care at a later stage, even though this will mean worse outcomes for individuals and higher costs for the healthcare system in the long term.

- http://biz.thestar.com.my/news/story.asp?file=/2013/3/27/business/20130327085030&sec=business

This, of course, validates an argument that is often brought in favour of universal healthcare: The long-term costs of a working system of universal coverage are lower since people end up in emergency rooms with preventable conditions less often, since people are less sick and more productive. Because it is ultimately not just better for the patients but cheaper for the system as a whole to screen regularly and intervene early.

That said, what are your thoughts on the study?

One might say it's kind of obvious that austerity, i. e. lack of funding, will lead to worse outcomes, right? But are we underreporting this issue? Are we too focused on squeezing out a little bit of economic recovery at the cost of much worse consequences? And is austerity even the way to go to stimulate the recovery in the first place?

Well, yeah, it is kinda obvious that cutting healthcare leads to deaths.

However, not everyone is as the pointy end to the same extent. There are people who are going to be hit much harder than others, and the ones who aren't getting hit might well not see the problem firsthand.

Then again, there's people going to see the problem when they get unlucky and it turns out they are on the pointy end after all.

Hmmm... I was thinking that austerity has a depopulation effect,but didn't had in mind reduced health care.
I live in Greece,and I can tell you at least 3 persons I've met the last year have tried to suicide.
Thankfully none of them made it. I was talking once at a psychiatrist and he told me he writes 10x times more prescriptions of psychological treatment drugs than he used to.

I think though that the most interesting is something that isn't that much obvious. I'm talking about the depopulation that comes up because people stopped making babies. As today people struggle to live themselves,thinking of bringing children to life seems crazy. The thinking of my fellow Greeks is that we don't want to bring children to the world if we are not sure we can afford them.Pay for their food,clothes,care etc. There is no money for that for the average Greek.Getting married and making kids has become a dream,something for the few and wealthy. Basic human need as reproduction has become a privilege of the "rich".Because of the reduction of babies born annual, the number of deaths is now higher than the number of births,and that means the population of my country gets less less. It got some hundreds of thousands less in the 3 years since the austerity packs measures started getting applied in Greece. If the same rate keeps true and doesn't change,my nation will probably be extinct in a century by now,as Greece is a small country. (sigh)
Of course a lot of things can change in 100 years,and I believe will change soon,and I hope even sooner.

The overly dramatic headline aside,the degrading of the healthcare systems is also true for the non-Euro states in south (eastern) europe. If a generous tip for the doctor is necessary to get an adequate treatment it's no wonder that the public services are in decay.

Besides the corruption the necessary reevaluation of the really existing productivity and economic performance of the affected states will slowly lead to a process of adjustment of the living standards and public services to a level that the states can afford out of their own pockets.

Stavros Dimou:
Hmmm... I was thinking that austerity has a depopulation effect,but didn't had in mind reduced health care.

Mark Steyn of Nationalreview.com is often writing it is the other way around. Greeks were not having kids, so they figured they could party hardy now as there is not future they cared about.

Supposedly Japan has similar problems and has seen no growth in 20 years because they're not growing as a society. They too are not having babies.

Smokej:
The overly dramatic headline aside,the degrading of the healthcare systems is also true for the non-Euro states in south (eastern) europe. If a generous tip for the doctor is necessary to get an adequate treatment it's no wonder that the public services are in decay.

Besides the corruption the necessary reevaluation of the really existing productivity and economic performance of the affected states will slowly lead to a process of adjustment of the living standards and public services to a level that the states can afford out of their own pockets.

I am very confused by this statement. I have never heard of anyone tipping a Physician in this day and age, nor would I imagine myself or anyone else in the field accepting such a tip. I have, however, known MANY dedicated Physicians that have paid for patients treatment out of their own pockets, worked endlessly in insane working environments and under extreme conditons to save lives, and expect nothing in return. What I see happening from my end on this, is too many patients and not enough doctors. There are simply too many people that need treatment, and not enough people wanting to become a Physician. Due to this, the existing Physicians are under extreme stress to meet demand, often running more out of the field making the problem worse. Yes, the amount of stress Physicians are currently under are increasing the number of Physicians that quit practicing all together.

As far as cost reduction, we really need to focus on bringing the costs of necessary equipment and testing down to better improve services provided. If we can reduce the costs for the use of medication, medical supplies and equipment, we can greatly reduce costs, because currently those costs are extremely high and not affordable for most people.

Generally when people are afraid they tend to spend less right? In an attempt to save their funds for a health crisis and only basic necessities which could slow down economic growth right?

Gorfias:

Stavros Dimou:
Hmmm... I was thinking that austerity has a depopulation effect,but didn't had in mind reduced health care.

Mark Steyn of Nationalreview.com is often writing it is the other way around. Greeks were not having kids, so they figured they could party hardy now as there is not future they cared about.

Supposedly Japan has similar problems and has seen no growth in 20 years because they're not growing as a society. They too are not having babies.

On the other hand, if your population isn't growing, its not that important that your economy isn't either, provided your GDP per capita remains the same you should enjoy similar quality of life.

This ignores the fact that you'll have one or two generations of real trouble as you have loads of old people to look after with fewer people able to work, but if you got through that there seems to me no reason you couldn't have a working stable zero growth economy.

Which in a world of finite resources, should really be the aim of every country if we want this civilisation of ours to last more than a couple of centuries.

Despite a devastating financial crisis, Iceland rejected austerity, following a referendum, and instead continued to invest in its social welfare system. As a result, the researchers found there had been no discernible effects on health since the crisis.

LOL! What a load of bullshit.

After the crisis hit our healthcare system has been slowly going down into the gutter with cuts being made left and right. In addition there is lots of hate coming from our doctors many of whom are outright leaving the country because their pay is so disgustingly low considering how hard their job is.

Our healthcare is suffering, a lot. I will admit that I don't know much about whatever it is that your are quoting here, but anyone who claims that our government has "continued to invest in our healthcare" and that there has been "no effect" on our health at the same time our healthcare system is slowly falling a part has no idea what he is talking about.

ClockworkPenguin:
Which in a world of finite resources, should really be the aim of every country if we want this civilisation of ours to last more than a couple of centuries.

Not necessarily. Growth doesn't require more resources, you can be cleverer with what you have.

thaluikhain:

ClockworkPenguin:
Which in a world of finite resources, should really be the aim of every country if we want this civilisation of ours to last more than a couple of centuries.

Not necessarily. Growth doesn't require more resources, you can be cleverer with what you have.

Increased efficiency does produce growth, but there is a fundamental limit to the efficiency of any given process, so that to is finite. Certainly, we can't afford continued exponential growth as we currently have.

Hardcore_gamer:
Our healthcare is suffering, a lot. I will admit that I don't know much about whatever it is that your are quoting here, but anyone who claims that our government has "continued to invest in our healthcare" and that there has been "no effect" on our health at the same time our healthcare system is slowly falling a part has no idea what he is talking about.

That is very interesting. What I'm quoting here is sourced: It's a major article in The Lancet, one of the most famous general medical journals in the world. But it's happened before that even journals like them or Nature or whoever have published badly researched stuff. Do you perhaps have a source for the healthcare problems in Iceland following the economic crisis of 2008 that I could check out?

ClockworkPenguin:

thaluikhain:

ClockworkPenguin:
Which in a world of finite resources, should really be the aim of every country if we want this civilisation of ours to last more than a couple of centuries.

Not necessarily. Growth doesn't require more resources, you can be cleverer with what you have.

Increased efficiency does produce growth, but there is a fundamental limit to the efficiency of any given process, so that to is finite. Certainly, we can't afford continued exponential growth as we currently have.

One can also increase inputs other than labor and not be more "efficient" as regards consumption of resources per person, but still have growth. Efficiency with regard to labor use does not have a fundamental limit except in the short term. In the long term, industry begets larger industry. To a certain extent we can produce goods and services without any human labor at all. Barring some extreme catastrophe, this will only increase in the future. Automated industry powered in some way by the sun (it needn't be a traditional idea of solar energy-- could be a plant derivative or anything else, but the sun is the largest source of energy nearby) even with a strong depopulation could allow for economic growth. An economic model that rides the wave of the massive ball of fusion in order to serve the desires of a few people could be something that approaches utopia. Unfortunately, it seems people like to have children.

Lil devils x:

Smokej:
The overly dramatic headline aside,the degrading of the healthcare systems is also true for the non-Euro states in south (eastern) europe. If a generous tip for the doctor is necessary to get an adequate treatment it's no wonder that the public services are in decay.

Besides the corruption the necessary reevaluation of the really existing productivity and economic performance of the affected states will slowly lead to a process of adjustment of the living standards and public services to a level that the states can afford out of their own pockets.

I am very confused by this statement. I have never heard of anyone tipping a Physician in this day and age, nor would I imagine myself or anyone else in the field accepting such a tip. I have, however, known MANY dedicated Physicians that have paid for patients treatment out of their own pockets, worked endlessly in insane working environments and under extreme conditons to save lives, and expect nothing in return. What I see happening from my end on this, is too many patients and not enough doctors. There are simply too many people that need treatment, and not enough people wanting to become a Physician. Due to this, the existing Physicians are under extreme stress to meet demand, often running more out of the field making the problem worse. Yes, the amount of stress Physicians are currently under are increasing the number of Physicians that quit practicing all together.

As far as cost reduction, we really need to focus on bringing the costs of necessary equipment and testing down to better improve services provided. If we can reduce the costs for the use of medication, medical supplies and equipment, we can greatly reduce costs, because currently those costs are extremely high and not affordable for most people.

If you haven't heard of it, no problem, let me shed some light on it. Those tips are nothing other than bribes to get the best public services, important documents and licenses and they have their own greek term: "Fakelaki". You can find several articles about the Fakelaki system online. You could start here to get some first impressions: http://www.guardian.co.uk/commentisfree/2012/nov/13/greek-people-system-bribery

http://www.transparency.org/news/pressrelease/20130307_less_and_cheaper_fakelaki_in_greece_the_key_results_of_2012_nation

ClockworkPenguin:

On the other hand, if your population isn't growing, its not that important that your economy isn't either, provided your GDP per capita remains the same you should enjoy similar quality of life.

This ignores the fact that you'll have one or two generations of real trouble as you have loads of old people to look after with fewer people able to work, but if you got through that there seems to me no reason you couldn't have a working stable zero growth economy.

Which in a world of finite resources, should really be the aim of every country if we want this civilisation of ours to last more than a couple of centuries.

Others pointing out you can have growth through greater efficiencies. There are sectors of the market that feed off of growth. Zero growth is going to have an effect, but I think you ultimately have a point. Any society has to be sustainable with what they have.

I do think a reverse demographic pyramid is going to be troublesome. Lots of old and retired people vs. fewer working people. Hopefully our economies are flexible enough to stand the change. But I also worry about that "party hardy" attitude. A society has to see itself having a future it is going to bother governing itself like it has one.

Smokej:

Lil devils x:

Smokej:
The overly dramatic headline aside,the degrading of the healthcare systems is also true for the non-Euro states in south (eastern) europe. If a generous tip for the doctor is necessary to get an adequate treatment it's no wonder that the public services are in decay.

Besides the corruption the necessary reevaluation of the really existing productivity and economic performance of the affected states will slowly lead to a process of adjustment of the living standards and public services to a level that the states can afford out of their own pockets.

I am very confused by this statement. I have never heard of anyone tipping a Physician in this day and age, nor would I imagine myself or anyone else in the field accepting such a tip. I have, however, known MANY dedicated Physicians that have paid for patients treatment out of their own pockets, worked endlessly in insane working environments and under extreme conditons to save lives, and expect nothing in return. What I see happening from my end on this, is too many patients and not enough doctors. There are simply too many people that need treatment, and not enough people wanting to become a Physician. Due to this, the existing Physicians are under extreme stress to meet demand, often running more out of the field making the problem worse. Yes, the amount of stress Physicians are currently under are increasing the number of Physicians that quit practicing all together.

As far as cost reduction, we really need to focus on bringing the costs of necessary equipment and testing down to better improve services provided. If we can reduce the costs for the use of medication, medical supplies and equipment, we can greatly reduce costs, because currently those costs are extremely high and not affordable for most people.

If you haven't heard of it, no problem, let me shed some light on it. Those tips are nothing other than bribes to get the best public services, important documents and licenses and they have their own greek term: "Fakelaki". You can find several articles about the Fakelaki system online. You could start here to get some first impressions: http://www.guardian.co.uk/commentisfree/2012/nov/13/greek-people-system-bribery

http://www.transparency.org/news/pressrelease/20130307_less_and_cheaper_fakelaki_in_greece_the_key_results_of_2012_nation

I apologize for my misunderstanding. In the US we have to worry about Pharmaceutical companies bribing doctors, not so much patients in need of care. Here, we have the issue of very little public health existing, and Physicians paying for the patients care themselves when the system has failed them. Physicians here open and support free clinics, open medical charities and sometimes resort to just ripping up the bills when a patient is unable to pay. I often forget with all of the problems we have here, there are often more serious issues elsewhere. US healthcare does have very serious issues as well, but in comparison to the very dire situation in Greece, I am very concerned for the people there with their present situation. Yes, from my understanding, many physicians have left Greece, making the situation even worse than it was before, and the situation before was far from good to begin with. When we have a world-wide doctor shortage, nations in financial despair are the hardest hit.

Edit: I had read something about the Physicians leaving a while back, but it appears that more had left than I had originally read:
http://greece.greekreporter.com/2013/01/31/greek-doctor-exodus-4000-flee-country/

Over here, they're trying so hard to dismantle the NHS and sell off the spare parts.

I can't help but feel these cuts are aimed at removing basic needs from the poorest, knowing that the deaths of those people will reduce the benefits bill, and they can claim this cull was a 'success in getting people off welfare', not mentioning they got them off welfare by getting them into a hole in the ground. Every peasant's demise is another bit of proof that they're doing it right.

IDS in particular has been caught lying over and over again and yet because he's got the Sun and Mail newspapers on his side, he's still just about got the masses behind him as he whittles away at the basic needs of not just the unemployed, but the underemployed and those on minimum wage.

Skeleon:

Hardcore_gamer:
Our healthcare is suffering, a lot. I will admit that I don't know much about whatever it is that your are quoting here, but anyone who claims that our government has "continued to invest in our healthcare" and that there has been "no effect" on our health at the same time our healthcare system is slowly falling a part has no idea what he is talking about.

That is very interesting. What I'm quoting here is sourced: It's a major article in The Lancet, one of the most famous general medical journals in the world. But it's happened before that even journals like them or Nature or whoever have published badly researched stuff. Do you perhaps have a source for the healthcare problems in Iceland following the economic crisis of 2008 that I could check out?

I can certainly back up that health expenditure has gone down significantly, by around 10% based off World Bank data (although it is a year or two out off date)

http://www.google.co.uk/publicdata/explore?ds=d5bncppjof8f9_&ctype=l&strail=false&bcs=d&nselm=h&met_y=sh_xpd_pcap_pp_kd&scale_y=lin&ind_y=false&rdim=region&idim=country:ISL&ifdim=region&ind=false

How that's impacted on performance I don't know, but with a massive drop like that I'd find it very strange if there weren't some problems.

I think it would be interesting to compare socialized medicine of Europe to privatized medicine in the US. Both entities have suffered through a recession, so it would be interesting to see if socialized vs privatized medicine does a better job weathering the fiscal downturns. Here in the US lots of people lost their jobs therefore losing health insurance, while in Europe austerity resulted in severe cut backs on health services. Both seem pretty lousy for people without the means to afford pricey coverage but on average I wonder who fared better.

@Overhead

That is very interesting indeed, although I must say I would like to see the numbers for more recent years as well. After all, this might merely be a temporary dip. Or, of course, the beginning of a much stronger reduction in healthcare expenses. Either would be illuminating.

I must say I'm very disappointed that I don't have access to the article in whole, because comparing the numbers of expenditure-reduction would be extremely important as well. Assuming the reduction in Iceland continued, the claim that they didn't reduce expenditures in that field at all would clearly be false, but it would still be very interesting to see it put in relation to the reductions of other countries, especially the ones with the worst increase in healthcare problems.

When the IMF/Banking Cartels visit each and every western country there will be two options, the path of Iceland or the path that Argentina was offered in 2001. Those that took the latter option are: Greece, Cyprus, Italy, Ireland, Portugal and Spain, now they are on the same path at varying speeds and where they lie on that path.

 

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