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Austerity’s impact on public health

A new book reports on the impact of financial austerity measures on public health, suicide rates, hospital admissions, and other measures of morbidity and mortality.  The news is striking – countries that adopted severe austerity measures have seen rapid deterioration of citizens’ health status, while those that dealt with financial trauma in a more measured way avoided those consequences.  In a piece in today’s NYTimes, they  contrast two recent financial disasters – Greece and Iceland – and the impact of their austerity programs on public health.

Lest you think this has nothing to do with we Americans, think “sequester”.  More on that in a minute.

Severe austerity measures in Greece have produced similar consequences for public health –

“Greece[‘s] national health budget has been cut by 40 percent since 2008, partly to meet deficit-reduction targets set by the so-called troika —  the International Monetary Fund, the European Commission and the European Central Bank — as part of a 2010 austerity package. Some 35,000 doctors, nurses and other health workers have lost their jobs. Hospital admissions have soared after Greeks avoided getting routine and preventive treatment because of long wait times and rising drug costs. Infant mortality rose by 40 percent. New H.I.V. infections more than doubled, a result of rising intravenous drug use — as the budget for needle-exchange programs was cut. After mosquito-spraying programs were slashed in southern Greece, malaria cases were reported in significant numbers for the first time since the early 1970s.”

While Iceland’s more measured approach has had little impact on their citizens’ health status –

“Iceland avoided a public health disaster even though it experienced, in 2008, the largest banking crisis in history, relative to the size of its economy. After three main commercial banks failed, total debt soared, unemployment increased ninefold, and the value of its currency, the krona, collapsed. Iceland became the first European country to seek an I.M.F. bailout since 1976. But instead of bailing out the banks and slashing budgets, as the I.M.F. demanded, Iceland’s politicians took a radical step: they put austerity to a vote. In two referendums, in 2010 and 2011, Icelanders voted overwhelmingly to pay off foreign creditors gradually, rather than all at once through austerity. Iceland’s economy has largely recovered, while Greece’s teeters on collapse. No one lost health care coverage or access to medication, even as the price of imported drugs rose. There was no significant increase in suicide. Last year, the first U.N. World Happiness Report ranked Iceland as one of the world’s happiest nations.”

Which brings us home to the US.

Sequestration’s impact on public health has been well-documented.  What I find really troubling is how fast Congress and the President reacted to air traffic delays – it took them less than a week – compared to their total inactivity on Head Start, addiction treatment, inoculations, and staffing cuts.

Good to know we abide by the Golden Rule:

He who was the Gold, rules.

2 thoughts on “Austerity’s impact on public health”

  1. Now you know what the GOP means by ‘taking back the country’…except it really means to take us back to the 17th, 18th and 19th centuries…the rich get richer, and everyone else suffers.

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Joe Paduda is the principal of Health Strategy Associates



A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



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