Social Science & Medicine 74 (2012) 684e687
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Social Science & Medicine
journal homepage: www.elsevier.com/locate/socscimed
Commentary
Health systems, health and wealth: The argument for investment applies now
more than ever
Martin McKee a, *, Sanjay Basu b, David Stuckler c
a
European Centre on Health of Societies in Transition, London School of Hygiene & Tropical Medicine, Keppel Street, London WC1E 7HT, UK
Department of Medicine, University of California San Francisco and Division of General Internal Medicine, San Francisco General Hospital, San Francisco, CA, USA
c
Department of Sociology, University of Cambridge, Cambridge, UK
b
a r t i c l e i n f o
Article history:
Available online 4 January 2012
Keywords:
Financial crisis
Recession
Ideology
Health and development
In 2008, European health ministers signed the Tallinn Charter,
committing themselves to investment in health systems and other
sectors contributing to health. Yet within a few months they found
themselves in the middle of a global financial crisis and many faced
calls to reduce spending dramatically. This paper reviews the causes and consequences of the 2008 financial crisis, contrasting the
extensive evidence of the financial situation with the scarcity of
evidence on contemporary patterns of health. It then reviews the
experience of previous crises, noting a consistent pattern of
increases in deaths from suicide and reductions in road traffic
fatalities, while also showing how these can be affected by
government policies and, in particular, the contribution of social
welfare programmes to reducing suicides. It argues that the
commitments made at Tallinn are even more important now, but
examines some of the cognitive and political barriers that constrain
their adoption. It concludes with a call for action by politicians now
to place health and economic growth on a mutually reinforcing
upward trajectory and avoid the possibility of a downward spiral.
The gathering storm
In June 2008, health ministers from across Europe met in Tallinn,
Estonia, to discuss the interrelationships among economic growth,
health systems and public health. After reviewing an extensive
body of evidence (Figueras & McKee, 2011), they affirmed their
* Corresponding author.
E-mail address: [email protected] (M. McKee).
0277-9536/$ e see front matter Ó 2011 Elsevier Ltd. All rights reserved.
doi:10.1016/j.socscimed.2011.12.006
belief in the merits of a balanced investment among growth and
health, recognising a complementary relationship in that “investing
in health is investing in human development, social well-being and
wealth”.
In brief (McKee et al., 2009), the evidence presented to the
ministers showed how better health contributed to economic
growth, primarily through greater productivity and higher labour
force participation, while also reducing future demands on health
care and social welfare systems. Economic growth enabled people to
enjoy better health while making it possible to provide higher
quality health care. And investment in health systems improved
health, by reducing deaths and disability amenable to health care, as
well as supporting economic development through links to research
and support for inward investment in deprived regions. All of this
did, however, depend on the policies being pursued being effective.
In the Tallinn Charter health ministers and policymakers
committed themselves to act on a series of measures that included
to “promote shared values, of solidarity, equity, and participation”,
“invest in health systems and foster investment in other sectors
that influence health”, “promote transparency and be accountable
for health systems”, “make health systems more responsive to
people’s needs, preferences and expectations” and as a crosscutting approach “ensuring due attention is paid to the needs of
the poor and other vulnerable groups” (WHO, 2008, p2). Within
a few months, however, a change in tone became apparent. The
onset of financial crisis derailed many existing commitments,
including those made in Tallinn.
Even while the ministers were in Tallinn, there were plenty of
warning signs of impending financial collapse. These warnings
M. McKee et al. / Social Science & Medicine 74 (2012) 684e687
were dismissed as scaremongering, as the power of the market
was thought inevitably to achieve the best possible outcomes
(Blanchflower, 2009). By September 2008, warnings could no
longer be ignored. Ordinary citizens queued to withdraw their
savings from under-capitalised banks in locales as different as
Iceland and Hungary. Financial institutions across the continent
were on the brink of collapse, having engaged in a range of reckless activities, including massive lending against assets that were
essentially worthless (such as sub-prime mortgages in the USA or,
in the case of Austrian banks, similar risky investments in Eastern
Europe), creation of complex financial instruments that few
understood (such as “credit default swaps” and “collateralized
debt obligations” (Ferguson, 2008)), and ill-advised and costly
mergers and acquisitions. These were largely hidden from public
view as part of what the Financial Times called a “shadow banking
system” (Tett Davies, 2007). Investors were able to engage in these
activities because they had been so successful in the previous
decades in lobbying governments to revoke many of the checks
and balances that had preserved a degree of economic stability
since the Great Depression of the 1930s (New York Times, 1933;
Wade, 2009). At the same time, governments, some seemingly
entranced by the illusion of gravity-defying economic performance, failed abysmally to use their powers to regulate their
financial services sectors.
Soon, those same governments stepped in to bail out institutions
that, until a few days earlier, had been demanding that governments
get off their backs and leave them to manage their affairs as they
wished. The cost was enormous. In the United Kingdom alone, the
financial rescue package totalled V600 billion, almost 20% of Gross
National Product. The combination of such rescue measures and the
accompanying collapse in tax revenues rapidly increased government deficits (Stuckler, Basu, McKee, Suhrcke, 2010). Credit rating
agencies, which had so spectacularly failed to anticipate the problems in financial institutions (perhaps blinded by the vast profits
they were making from providing ratings for those institutions
(Rom, 2009)), threatened to downgrade the credit ratings of
governments, raising the cost of borrowing. In a few countries, this
rapidly developed into a sovereign debt crisis, starting with Greece,
where the government had colluded with Goldman Sachs to conceal
approximately $300 billion of loans using off-balance accounting
(Foley, 2010).
Suddenly, confronted with a deteriorating budget sheet and
pressure to address rising budget deficits, ministers who had
attended the Tallinn conference began wondering whether they
had made a mistake. Should they have committed to invest in the
health of their populations at a time when some of their colleagues,
especially those in finance ministries, were calling for a severe dose
of austerity?
What is to be done?
Inevitably, health ministers turned to others for advice. There
was no shortage of advice to be had. Economists lined up to offer
diagnoses and treatments. Unfortunately, there were almost as
many opinions as economists prepared to offer them. Worse, many
of those offering advice were the very same economists who had
failed to see the crisis coming, or had been involved in generating
the financial structures that precipitated the crisis, although
somehow this did not cause them to question their own judgement
more than momentarily. While health ministers struggled to make
sense of this diversity of views, they had one main concern (McKee,
Stuckler, & Martin-Moreno, 2010): were those in charge of the
purse strings advocating a fiscal stimulus, with increased public
spending (which often needed to be financed by borrowing) to
safeguard the economy during the crisis and invest in future
685
growth? Or were they advocating for a severe dose of austerity,
reducing the public deficit even if it meant slashing public services,
including health care and other sectors contributing to health?
The answer to this critical question varied, reflecting in part the
differences in the scale and nature of the economic crisis each
country was facing. Crucially, some countries within the European
Union were affected by economic recession to a much greater
extent than others, reflecting in part the dominance of financial
services within their economies and their ability to regulate them.
Thus, while Ireland’s deficit reached 14.3% of GDP in 2009, Sweden’s had only reached 0.5%.
However, the response also depended to a considerable extent
on the political complexion of those giving the advice. In a few
countries, most notably the United Kingdom, the Conservative
Party (then in opposition) was explicitly drawing on the actions of
the Canadian government a decade earlier (Klein, 2007). Many in
the party saw the crisis as a heaven-sent opportunity to shrink the
state. Those adhering to this view saw growth of the post-war
welfare state as a “60 year old mistake” that they now had the
opportunity to rectify (Helm & Syal, 2009). They were able to draw
support from an increasing number of “independent” think tanks,
whose generous funding was strangely obscure, as well as apparently populist movements such as the Tax Payers Alliance in the
United Kingdom, which drew inspiration from the American Tea
Party movement. These movements rapidly became newsworthy
and thereby influential, even though awareness of how they had
been created to serve vested interests soon led them to be referred
to as “Astroturf” rather than “Grass Roots” (Monbiot, 2010). The
financial crisis was portrayed as arising from profligate government
spending, especially on the welfare state, and in some cases motivated by greedy unions, rather than what it really was: a collapse in
tax revenues coupled with massive state subsidies to privatelyowned financial institutions. In the United Kingdom, Conservative
politicians lost no opportunity to misrepresent the nature of the
crisis, frequently conflating the short-term deficit (which is high)
with long-term debt (which remains low, and well within the
International Monetary Fund’s stated limits of sustainability)
(Stuckler, Basu, McKee et al., 2010).
Fortunately, in some other countries, not only in Europe but also
in the United States, finance ministries were adopting Keynesian
policies that had been so important in the recovery from the Great
Depression in the 1930s. Belgium, for example, adopted an
expansionary policy that included increasing social benefits to
ameliorate the human cost of the crisis. A few countries, such as
Finland, explicitly used the crisis as an opportunity to improve
health by increasing taxes on soft drinks and sweets, a classic
winewin situation for both public health and the government.
Countries changed in response to evident failures. In Ireland, the
Fianna Fail-led coalition government agreed a savage austerity
regime with the European Union, but was swept aside in a general
election in February 2011, to be replaced by a Fine Gael/Labour
coalition committed to renegotiating austerity deals.
So what does this mean for health ministers and others arguing
for investment in public health and health systems? Most obviously, it places an obligation on them to undertake a rapid programme of education so that they can engage actively in national
debates about economic policy (McKee et al., 2010). The diversity of
views shows that there is no monopoly of wisdom on the appropriate policy to pursue. Those engaged in health policy must feel
confident in demanding reasoned arguments from those who argue
for a specific policy, and not allow ideology to be passed off as
inevitability. However, it also places an obligation upon them to be
able to articulate what the human cost of austerity measures is
likely to be in terms of morbidity and mortality (Stuckler, Basu, &
McKee, 2010). We now ask what these consequences might be.
686
M. McKee et al. / Social Science & Medicine 74 (2012) 684e687
The lessons of history
The consequences of the 2008 economic crisis for public health
are only beginning to become apparent. Unfortunately, while it is
possible to monitor in real time a vast quantity of information on
changes in the financial markets, the most recent data on mortality
from some European countries is five or six years old. Hence, it is
necessary to learn from the experience of previous situations. The
most obvious analogy is the Great Depression, which began in 1929
and whose effects persisted throughout the 1930s. Until recently,
the evidence from this period has been confusing. While the
popular imagery of the time includes bankers jumping from
window ledges on Wall Street, The New York Times reported that the
health of the American population had never been better (New York
Times, 1933). Subsequent research seemed to confirm such newspaper reports, indicating that death rates were falling at the time of
the Depression (Tapia Granados & Diez Roux, 2009). The obvious
problem is that many different things were happening at the same
time. For example, the United States was in the middle of what
Omran has termed the “epidemiological transition” (Omran, 1971),
in which deaths from infectious diseases were falling rapidly, due
largely to a combination of improved living conditions, better
nutrition, and sanitation; meanwhile, the so-called “diseases of
affluence”, such as heart disease and cancer, were increasing. In
a recent paper, we disentangled this complex situation, taking
advantage of a unique data set on banking suspensions by state (at
that time, banks were not permitted to trade across state boundaries). Using these data, it was possible to assess how badly each
state was hit by the Great Depression, while removing the underling
nationwide changes in mortality. This analysis found that a high
level of banking suspensions was significantly associated with an
increase in suicides, but a decrease in deaths from motor vehicle
accidents as people presumably drove less (Stuckler, Meissner,
Fishback, Basu, & McKee, 2011). (See also the commentary in this
collection by Suhrcke and Stuckler, 2012).
There are, however, other economic crises that can be studied.
The collapse of communist governments in Eastern Europe
between 1989 and 1991 had profound economic consequences.
Production slumped as the Soviet system of integrated, planned
markets fragmented. Unemployment rose rapidly, while those still
in employment were paid in arrears or in kind, if at all. Life
expectancy plummeted, but not to the same extent everywhere. A
study in European Russia showed how, between 1990 and 1994,
that some regions fared much worse than others. In the quartile of
regions suffering most, male life expectancy at birth fell by 8.6
years; in the quartile suffering least, male life expectancy fell by 5
years. The major difference appeared to be the pace of economic
transition. A measure of labour turnover in large and medium
enterprises explained 42% of the observed variation. A decomposition of the causes of life expectancy declines revealed that the gap
between the best and the worst regions was being driven largely by
deaths among men of working age and from causes directly linked
to alcohol (Walberg, McKee, Shkolnikov, Chenet, & Leon, 1998).
In a subsequent study, we looked at the pace and scale of privatisation in each country (Stuckler, King, & McKee, 2009). Those
countries that had engaged in rapid mass privatisation fared worse
than those that had a more gradual experience. However, it was
also apparent that the harmful effects of mass privatisation on
health were mitigated to some extent by having a high proportion
of the population engaged in social-stabilizing groups (for example,
trade unions, sporting bodies, or churches). This apparently
protective effect of social cohesion and support was consistent with
earlier work showing how married men were relatively more
protected than unmarried men from mortality in the 1980s (Hajdu,
Mckee, & Bojan, 1995).
These findings were not welcomed by everyone, especially
those who had been the most enthusiastic advocates of rapid privatisation. Their argument had been that it was essential to move
rapidly to break up the communist system, lest the party reassert
its control (conveniently ignoring how many of the new leaders
who seemingly embraced markets were previously leaders of
communism). The Economist magazine printed a graph of life
expectancy that used 5 year averages, so that the post-Soviet
mortality crisis, marked by rapid year to year fluctuations, was
masked by the averaging process. Others re-analysed the data in
increasingly imaginative ways (Earle & Gehlbach, 2010; Gerry,
Mickiewicz, & Nikoloski, 2010), for example by inserting lag
periods that had no empirical rationale and redefining variables
without justification, which statisticians refer to as “data torture” to
force a conclusion by manipulating statistical analyses (Stuckler,
King, & McKee, 2010).
More recently, we looked at the association between periods of
rapidly rising unemployment and mortality from a range of causes in 26 European countries between 1970 and 2007 (Stuckler,
Basu, Suhrcke, Coutts, & McKee, 2009). As in the Great Depression, the causes of death affected were often suicides, which rose,
and road traffic deaths, which fell. However, as in the former
communist countries, the impact on mortality varied and the rise
in suicides was reduced markedly in countries investing in active
labour market programmes that supported the transition of
unemployed people back into work. In other words, government
intervention could mitigate the mortality impact of financial
crisis.
Taken together, these findings indicate that rapid economic
change, especially when associated with increases in unemployment, is damaging to public health. This is especially so when the
population has easy access to harmful substances, such as the large
volumes of cheap alcohol that flooded the former Soviet Union in
the 1990s, and in particular surrogate alcohols sold as aftershaves
that were up to 95% pure ethanol (McKee et al., 2005). However,
people with strong social support networks, whether within
families or extended social groups, have some degree of
protection.
Government is not the problem but part of the solution
The message for those ministers present at Tallinn, and for
their successors, is that governments still have a clear role to play.
First, they can take measures to limit access to harmful substances,
especially at times when populations are most vulnerable. Second,
they can invest in measures that get people back into employment. Third, they can put into practice the principles set out in
Tallinn, noting the evidence presented there that investment in
the health of their populations, as in their education and training,
can contribute substantially to future economic growth,
increasing labour force participation and productivity (Suhrcke
et al., 2006). Finally, they can invest in their health systems, recognising how, if appropriately done, this can itself increase
economic growth, for example by links to research-driven health
industries or by supporting inward investment in deprived
regions (Figueras & McKee, 2011).
The alternative is a vicious downward spiral into poverty and
ill health (Stuckler, Basu, Suhrcke, Coutts, & McKee, 2011;
Kentikelenis et al., 2011). This may already be emerging in the
United Kingdom, where growth was negative in the fourth
quarter of 2010 while there has been a reversal in what had been
a long-term downward trend in suicides. Yet governments can
turn what could too easily become a vicious cycle into a virtuous
one, in which health and economic development mutually reinforce each other (McKee et al., 2009).
M. McKee et al. / Social Science & Medicine 74 (2012) 684e687
There are none so blind
Effective action does, however, require that politicians absorb
this evidence. Unfortunately, this is not simply a matter of education. The former Chief Economist at the International Monetary
Fund has described as “the quiet coup” the way in which the
financial services sector has effectively captured government
(Johnson, 2009). He describes how “a whole generation of policy
makers has been mesmerized by Wall Street, always and utterly
convinced that whatever the banks said was true.”(p2) Similarly,
Wade has described how academic economics has, since the 1960s,
come to be dominated by an unquestioning faith in the efficiency of
markets coupled with a rejection of anything but the lightest
regulation (Wade, 2009). A further factor is the growing importance of some highly partisan media outlets that oppose collective
action. Perhaps the most important is Fox News, which has been
shown in an elegant study from the United States to have been
associated with a significant electoral shift to the Republicans
(Della Vigna & Kaplan, 2006).
A growing body of research from cognitive psychology, some
taking advantage of advances in brain imaging, is revealing how,
unfortunately, individuals actively seek out information that
confirms their preconceived beliefs and disregard information that
challenges their views (McKee & Stuckler, 2010). Indeed, authoritative corrections to their views may, paradoxically, reinforce them
(Nyhan & Reifler, 2010). Thus, in other research from the United
States, registered Republicans presented with evidence on the
social determinants of health became less likely than those not
those exposed to support a societal response (Gollust, Lantz, & Ubel,
2009). As one research team noted, to overcome these biases in
those who hold them strongly, one must “hit them between the
eyes” (Kuklinski, Quirk, Jerit, Schwieder, & Rich, 2000).
Conclusion
Europe is embarking on a massive experiment with its people. In
some countries, politicians have sought to strengthen social
protection and invest in ways that will promote economic growth.
In others, ideological blindness has prevented them from envisaging any alternative to budget cuts and austerity. Perhaps those
people now need to speak out loudly to remind them of the
commitments they made in Tallinn.
Acknowledgements
Thanks to Winston Churchill, Vladimir I Lenin, Aldous Huxley,
Jonathan Swift, and Ronald Reagan for providing the quotations on
which the section headings are (very loosely) based.
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