NESRI Media Center

National Academies Report Considers "Free-Market Capitalism" a Cause of Poor Health Outcomes in U.S.

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Publication Date: 
January 10, 2013
Author: 
Anja Rudiger, NESRI

The U.S. population is in far poorer health and lives shorter lives than people in other high-income countries, according to a new report by the National Research Council and the Institute of Medicine released yesterday. This is hardly surprising to anyone working for the human right to health in the United States. Yet this study does not merely add to the mountain of evidence on comparatively poor U.S. health outcomes. Included in the lengthy report are some remarkable suggestions about the root causes of this crisis. In the authors’ unusually frank struggle to come to terms with their findings, they point to important structural causes, such as “free-market capitalism” and a deeply engrained ideology of “self-reliance” and “rugged individualism” along with an “uneven distribution of resources,” “deregulation” and “resistance to government taxation.”

As a result, the report situates its findings squarely within the current budget cut debates and austerity agenda by explaining that “the largest obstacle to addressing the U.S. health disadvantage is not a lack of evidence or uncertainty about effective interventions but limited political support among both the public and policy makers to enact the policies and commit the necessary resources to implement them.  As this report is being written, the major debate relevant to this issue is whether to reduce or eliminate discretionary spending on public health and social policy initiatives in an effort to balance budgets and limit the size of government.”

How did a plodding, seemingly hesitantly drafted mainstream report end up promoting a refreshingly honest perspective on the structures and ideologies of U.S. society?

The report begins with this finding, which it calls “disturbing”: “The United States is among the wealthiest nations in the world, but it is far from the healthiest. Although life expectancy and survival rates in the United States have improved dramatically over the past century, Americans live shorter lives and experience more injuries and illnesses than people in other high-income countries.”

It then reviews indicators of health outcomes and analyzes the findings as follows:

  • The U.S. health system suffers from a large uninsured population, financial barriers to care, a shortage of primary care providers, and potentially important gaps in the quality of care.
  • Americans have a higher prevalence of certain unhealthy behaviors involving caloric intake, sedentary behavior, drug use, unprotected sex, driving without seatbelts, and the use of firearms.
  • The United States lags in educational achievement, and it has high income inequality and poverty rates and lower social mobility than most other high-income countries.
  • Americans live in an obesogenic built environment that discourages physical activity, and they live in more racially segregated communities.

To understand the root causes of these problems, the report then made the crucial transition to what human rights advocates consider a unified frame for economic and social rights.

“Because choices about political governance structures, and the social and economic conditions they reflect and shape, matter to overall levels of health, the panel asked whether some of these underlying societal factors could be contributing to greater disease and injury rates and shorter lives in the United States. And might these choices also explain the inability of the United States to keep pace with peer countries in other important health related domains, such as education and child poverty?”

These “choices” are directly related to resources: “In countries with the most favorable health outcomes, resource investments and infrastructure often reflect a strong societal commitment to the health and welfare of the entire population.”

So why is the commitment to people’s well-being so different in the United States?

“The U.S. approach to policies that relate to health and social programs is what sociologists classify as an Anglo-Saxon or liberal model. In this terminology, “liberal” refers to the many English-speaking countries with economies that are more oriented to the free market (with relatively low levels of regulation, taxes, and government services) than other capitalist economies. Sociologists distinguish the Anglo-Saxon/liberal model of the United States and the United Kingdom from countries like Sweden, which operate under a social democratic model in which the state makes generous commitments to full employment, income protection, housing, education, health, and social insurance.”

Evidence shows “that the United States and the United Kingdom generally fare worse than all of [the European countries]—on both aggregate health status and the steepness of the health gradient.”

European countries showed, at least historically, some commitment to the human rights principles of universality and equity. “Most European welfare programs came into existence after World War II with the goal of providing more universal access to assistance. The social democratic model promotes social equality through wage compression, organized through strong collective bargaining by unions, and tax policies that direct resources to the social security system.”

The report comes to a tentative conclusion: “There is little question that the European welfare model is effective in redistributing income and reducing poverty. More universal and generous welfare systems achieve greater income equality than other systems through more generous income transfers through taxes and services. These entitlement benefits may buffer the health effects of material deprivation and thereby improve health outcomes but they may have other consequences that are not economically or politically viable in the United States.”

Why would policies with such obvious positive impacts not be viable in the United States?  The report seeks to answer this by looking more deeply at economic and ideological structures: “five iconic American beliefs seem especially relevant: individual freedom, free enterprise, self-reliance, the role of religion, and federalism.” Here are excerpts of the authors’ reflections on some of these issues:

  • Free Enterprise: American society is committed to free-market capitalism and generally eschews restrictions on industries, especially when they impede economic activity or involve an expansion of governmental regulatory authorities. Many aspects of the political process, including the campaign finance system in the United States, give large donors and special interests a degree of influence over the formulation of policy than may exist in other countries.
  • Self-Reliance: In a nation founded by pioneers, many Americans believe in the responsibility of individuals, not the state, to solve personal problems: dependency on government welfare programs or “handouts” is discouraged. Thus, raising taxes for state-financed social or health programs is often unpopular with a large proportion of American voters. In contrast, there is a consensus in many other high-income countries around shared responsibility, solidarity, and the principle that a certain standard of living is a right of citizenship.
  • Federalism: The United States originated with a revolution against an overbearing government, and Americans continue to seek limits on the size and budget of government, including agencies responsible for social services, safety, and even health itself. The federalist principles adopted by the nation’s founders reserved limited authorities for the federal government and divided the remainder across the states, which in turn have delegated many authorities to counties and municipalities. [This] creates an uneven distribution of resources that might not exist in countries with more centralized models and that often affect the neediest. For example, because authority for so many services rests with the states, the poorest Americans often live in states (e.g., Louisiana, Mississippi) with low tax revenue and small budgets for Medicaid, public schools, and social services.

These structures and ideologies are reflected in budget decisions and resource distributions. “The panel’s review of data on the U.S. health disadvantage and its potential causes shows that the United States often spends less per capita in many of the areas in which its performance is lagging, with the obvious exception of health care. Levels of spending should be interpreted with caution because they say little about the efficiency or effectiveness of programs, but the spending patterns of the United States stand in contrast to those of other high-income countries with better health outcomes.”

“Many of the programs discussed above are financed in other countries by taxes, an approach with limited political support in the United States. […] Since the 1980s, no country in this peer group except Switzerland has spent less than the United States (as a percentage of employee-employer payroll taxes) on social security programs such as old-age, disability, and survivors insurance; public health or sickness insurance; workers’ compensation; unemployment insurance; and family allowance programs.”

The report concludes that “meaningful initiatives to address the underlying causes of the U.S. health disadvantage may have to address the distribution of resources that are now directed to other categorical priorities—a change that is likely to engender political resistance.”

The recognition of important root causes of poor health and unmet needs in the United States is a crucial step towards effecting change. It is the task of grassroots organizing and movement building to make such systemic change politically possible.

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