This post is the third in a series about a new book by Angus Deaton and Anne Case titled Deaths of Despair and the Future of Capitalism. This post, “Ill fares our Nation, part 3” is about Case and Deaton’s claim that the US “healthcare system is a uniquely American calamity that is undermining American lives.” The American lives they are talking about are mostly those of the American non-college-educated, white working class.
Case and Deaton say that this is happening in a couple of major ways. In the first place American medical care is by far the most expensive in the world and at the same time, it gives by far the worst results in the first world. The exorbitant cost of American health care is a major factor in the impoverishment of the the working class.
The second reason American health care is such a calamity for American working people was the US legalization of Oxycontin and other opioids in the 1990s. Many, including Case and Deaton, say that this was like legalizing heroin and then telling people it wasn’t dangerous. This is exactly what American doctors routinely told and are still still telling working Americans all across the US. The reason Oxycontin was introduced was, in the opinion of many, including Case and Deaton, not to help the American people but to generate absolute truckloads of money for the producers of these drugs. And this decision has destroyed hundreds of thousand of working class lives.
Lets go back and look at all of this a little more closely.
Case and Deaton are far from the only writers who have been telling us for the last 20 years that American health care is the most expensive in the world and that it achieves some of the worst results. Here is a summary of what Jacob Hacker had to say about this situation in his book American Amnesia.
At mid-century Americans were generally healthier than the citizens of other rich countries, but that didn’t last for long. For one thing US life expectancy is now way down compared to the other rich nations. Generally, American life expectancy is about five years lower than other first world nations.
Life expectancy in America is actually falling. Hacker says that “In the US, whites aged forty-five to fifty-four were dying at higher rates in 2013 than they had been in 1999, even as every other rich country had seen dramatic drops in mortality in this age group.”
In 2013 there were 736 deaths per 100,000 in the forty-five to fifty-four age group in the US. In Canada there were only 249 deaths and the death rate was falling. I was really surprised and deeply shocked by this statistic.
The same thing is true for infant mortality. In 2011, “the only countries in the Organization for Economic Cooperation and Development (OECD) with higher rates of infant mortality were Chile, Mexico, and Turkey.”
These horrible US health statistics are true in spite of the fact that the US spends more that twice as much per year on health care than other rich nations. This is because the American health system is deeply inefficient compared to other first world countries.
The US also has the highest rate of deaths that could have easily been prevented with timely care. This death rate is called Amenable Mortality. The US Amenable Mortality rate is the highest in the world.
Case and Deaton think there is a very good reason for the horrible state of health care in America. They say it is because of the social, political and economic system that it is embedded in. They say that in America, more so than anywhere else in the first world, market and political power have moved away from labour and toward capital. They argue that globalization and weakened unions and recently more powerful employers have all been responsible. Corporations have become more powerful and unions have become markedly weaker in the last 40 years. Large corporations like Google and Apple and Facebook have become monopolies that employ fewer and fewer workers and have higher profit rates per worker. This is great for national income and for the very wealthy but little of these higher profits are shared with workers. Especially the less educated workers.
In many other industries like hospitals and airlines and health care, small companies have become huge corporations. And these corporations have also become powerful monopolies and they have been able to raise prices and cut wages in ways that would not have been possible in a market that was truly competitive. Now-a-days almost all markets in America are no longer competitive markets. Almost all large companies are now monopolies.
And of course most of this has been done at the expense of workers, ordinary people and consumers.
This trend has reached new heights in the pharmaceutical industry and other sectors of the health care industry. Case and Deaton say that
At its worst, this power has allowed some pharmaceutical companies, protected by government licensing, to make billions of dollars from sales of addictive opioids that were falsely peddled as safe, profiting by destroying lives. More generally, the American healthcare system is a leading example of an institution that, under political protection, redistributes income upward to hospitals, physicians, device makers, and pharmaceutical companies while delivering among the worst health outcomes of any rich country.
Case, Anne. Deaths of Despair and the Future of Capitalism. Princeton University Press. Kindle Edition.
Case and Deaton also say that what we have in America today is a reverse Robin Hood world. In this world the robber barrons rob the poor to pay the rich.
What is happening today in America is the reverse of Robin Hood, from poor to rich, what might be called a Sheriff of Nottingham redistribution. Political protection is being used for personal enrichment, by stealing from the poor on behalf of the rich, a process known to economists and political scientists as rent-seeking. It is, in a sense, the opposite of free-market capitalism, and it is opposed by the Left, because of its distributional consequences, and the Right, because it undermines freedom and a truly free market. It is as old as capitalism itself, as Adam Smith knew very well even in 1776.
Case, Anne. Deaths of Despair and the Future of Capitalism (p. 11). Princeton University Press. Kindle Edition.
The worst of all were the new opioid drugs that were turned loose on the American population in the late 1990s. One of the worst of the companies to do this was Johnson and Johnson. A subsidiary of this company grew the poppies in Tasmania that were the raw material for almost all the opioids produced in the US. An even worse offender was Purdue, the maker of Oxycontin which was responsible for the lion’s share of the opioid deaths in this country. Purdue is owned by the Sackler family who aggressively pushed thousands of doctors to prescribe Oxycontin for many illnesses where it was clearly not called for. And of course all of these doctors were ensnared in kickback schemes of free meals, glamorous vacations, and lavish payments to go to medical meetings promoting the new opioid drugs. The Sackler family made billions and billions out of all of this.
There are a couple of very good books about the opioid epidemic. One is Dopesick: Dealers, Doctors and the Drug Company that addicted America. The other book is Pain Killer: An empire of deceit and the origin of Ameria’s Opioid Epidemic. A third book that just come out in 2020 but which I have not read yet also looks very good. This book is Pharma: Greed, Lies and the poisoning of America.
Some of the opioid companies like Johnson and Johnson and Purdue are now being tried in court and getting some pretty huge fines. Some of Purdue’s fines are in the billions. But the opioids are still out there. As Case and Deaton say,
the aggressive marketing of pharmaceuticals to doctors and patients is still in place, as are the rules whereby the Food and Drug Administration approved the use of what is essentially legalized heroin. Many of those who have followed the opioid scandal see little difference between the behavior of the legalized drug dealers and the illegal suppliers of heroin and cocaine who are so widely despised and condemned.18
Case, Anne. Deaths of Despair and the Future of Capitalism (p. 10). Princeton University Press. Kindle Edition.
But unfortunately the problems of the healthcare industry go far beyond the opioid scandals. As Jacob Hacker said, the US health industry spends far more than any other first world country on health with results that can only be called dismal.
Case and Deaton argue in their book that the huge expenses of health care alone has been a major factor in the destruction of the American working people. The high cost of our bad health care system brings down wages and makes it more and more difficult for even the government to come up with do-able health care plans. Bottom line: the US is now clearly trading off the health of a large part of America in order to fill the pockets of the very rich. And as Deaton and Case say, “None of this would be possible without the acquiescence—and sometimes enthusiastic participation—of the politicians who are supposed to act in the interest of the public.”
As Case and Deaton keep mentioning in their book, something is deeply wrong with a nation that treats its people the way the US does.
There is one more chapter in this series of posts about Deaton and Case’s book, Deaths of Despair. The final post will be about the overlarge influence of what is called rent-seeking in the American economy. I think this problem is the most interesting and important part of this whole illness which is destroying both the American working class and in the long run, America itself.
More reading on this subject
“Economist Anne Case on America’s ‘deaths of despair’ — and how to tackle them.” This is an excellent article in the Financial Time that was published in February of 2020 and expands some of the ideas I have discussed in this post
This post is the third in a series about a new book by Angus Deaton and Anne Case titled Deaths of Despair and the Future of Capitalism. This post, Ill fares our Nation, part 3 is about Case and Deaton’s claim that the US “healthcare system is a uniquely American calamity that is undermining American lives.” The American lives they are talking about are mostly those of the American non-college-educated, white working class.