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The Hidden Health Costs of the Great Recession

• May 09, 2014 • 8:00 AM

(Photo: Eric Von Seggern/Shutterstock)

We are almost certainly sharply underestimating the bill that is coming due.

This June will mark five years since the Great Recession officially came to an end, and amidst an uncertain recovery, the nation has started taking stock of what the disaster cost us.

A landmark report from three economists at the Federal Reserve Bank of Dallas, published last July, has attempted to put a price tag on the crisis that extended from 2007 to 2009, often and rightly described as the nation’s worst economic disaster since the Great Depression of the 1930s. Their dizzying estimate: Somewhere between $6 and $14 trillion, or 40 to 90 percent of 2007 economic output. This is roughly one to two times all government spending in the United State this year—state, federal, and local—which is estimated at $6.3 trillion.

And yet, mind-boggling as these totals are, they omit at least one key metric: The impact of the downturn on already staggering U.S. health costs. As a result, we are almost certainly sharply underestimating the bill that is coming due.

There can be no full accounting of the costs of the Great Recession without recognizing that the crisis and its aftermath is not simply an economic story—it is also a public health story with economic implications. This insight is not new. Indeed, more than 80 years ago, the U.S. Public Health Service undertook research into the health impact of the Great Depression. We must do the same.

The Great Recession in effect kicked off a natural public health experiment—a clinical trial in which we were each enrolled simply by virtue of being alive, with no semblance of informed consent. The time has come to assess the results, including the final price tag.

While it is still early days for Great Recession-related research, there is already good reason to think that the resulting health costs will be both substantial and enduring. Researchers David Stuckler and Sanjay Basu, authors of The Body Economic: Why Austerity Kills, have written that the United States saw an estimated 4,750 “excess” suicides between 2007 and 2010, with suicide rates significantly greater in states with the greatest job losses. More broadly, a new article in Harvard Public Health offers a depressing portrayal of the many harmful health impacts linked to involuntary job loss, foreclosures, and widening wealth inequality, another hallmark of the post-Great Recession world—all important areas of ongoing research. For example, a 2009 report by University of Albany sociologist Kate W. Strully found that losing a job when a business closes increased the odds of developing health conditions such as stroke, hypertension, and heart disease, by a whopping 83 percent.

Given the magnitude of its impact, why is talk of the Great Recession as a health story all but absent from the public conversation? Amidst all the anecdotal plot points, why has a coherent and compelling narrative yet to emerge? Having spent my career delving into how we communicate about and spread the most important public health ideas, I have given this question a lot of thought and offer the following answers.

First, and most obviously, Great Recession-related health costs—unlike the GNP or employment figures—are not routinely tracked or easy to calculate. This is true for a number of reasons, including the fact that health impacts are often not apparent for many years, even generations. (On this point, research has found that a pregnant woman’s stress can be registered by her fetus, as evidenced by chromosomal changes in her baby.) Moreover, events affect different people very differently. For example, a job loss may be far less dangerous to an optimist with a healthy savings account and lots of supportive family and friends than it is to isolated pessimists living paycheck to paycheck, in danger of losing their homes.

Further complicating the picture is widely reported research making the counter-intuitive claim that downturns are good for health. When times are tough, people have more time to take care of themselves and spend less money on bad habits such as drinking and smoking—or so the argument goes. Let it be said that I am skeptical. For one thing, a focus on averages—on the total health impact across the population of well off and impoverished alike—necessarily obscures the impact on the most vulnerable groups. Further, even assuming short-term marginal improvements to general well-being, these may do little to offset long-term and catastrophic impacts on those most painfully affected, let alone long-term costs to the rest of us.

Finally, and beyond the complexities of disputed research, there is another far simpler reason we aren’t hearing more about the health costs of the Great Recession: The nation’s agenda setters have not focused on it. Simply put, we aren’t hearing about this issue, because we aren’t talking about it. Neither the institutional elites nor the social movement leaders who tend to shape our national discourse have placed the issue of health center stage. We are finally paying attention to the issue of inequalities, and rightly so. Yet this developing discourse largely ignores public health consequences.

This needs to change. The Great Recession in effect kicked off a natural public health experiment, as researchers Stuckler and Basu have noted—a clinical trial in which we were each enrolled simply by virtue of being alive, with no semblance of informed consent. The time has come to assess the results, including the final price tag.

In their July 2013 paper, the Federal Reserve Bank of Dallas researchers made a compelling case for measuring the costs of the Great Recession. This is the obvious way to do a proper cost-benefit analysis—to “assess the relative expense of policy proposals designed to avoid future episodes.” But to do this we need complete and accurate inputs—including a statistically sound index designed to reflect the impact of economic policies on public health costs. Creating such a metric—and encouraging its widespread adoption—should be central to our public health agenda. We need to watch this metric as closely as we watch the unemployment rate and the GDP. Until we take this into account, the full cost of this recession—and those to come—will remain a mystery.

Kasisomayajula Viswanath
Kasisomayajula “Vish” Viswanath is professor of health communication at Harvard School of Public Health and serves as faculty director of the Health Communication Core of the Dana-Farber/Harvard Cancer Center.

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