Wealth Precedes Health. Policy Should Reflect That. 

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Unidentified newborn in a rural hospital in Raxaul, Bihar state, India, 2013

Health inequality is back in the headlines. Some researchers, concerned with discrepancies across England, recently presented findings that over a million people living in “deprived” areas died earlier than they otherwise would have. Former Prime Minister Tony Blair’s earlier policies of supporting families by increasing access to health care, tax credits and minimum wages are believed to have lessened these types of inequalities.

But health inequalities are due to more than access to health care — differences in outcome are at least equally about personal expenditures to care for oneself. A poor diet has been found to be a top risk factor contributing to premature death. So a population that can afford healthier foods – or to live in safe homes, devote time to exercise, and seek out preventative care – is generally a healthier one. 

Bolstering the welfare system in the UK or US might be one possible approach, but let’s not forget a chief cause of the problem: an unequal distribution of the right economic institutions.

The idea that health is a human right and inequitable distribution of health care “must be addressed” is a common theme in medical and public health journals today. A recent article in Pharmacy puts it this way: “equity is realized when all people can attain their full potential for health and wellbeing.” The journals are constantly highlighting disparities such as in COVID-19 vaccine distribution and access to surgical care. There is even a journal called The International Journal for Equity in Health.

They’ll find little argument about the importance of access to care from me, but ultimately, wealth protects our health. In states like Michigan, where the government has been on a spending spree up 16.8 percent above inflation, accompanied by calls for higher taxes, that spending may end up negatively affecting health. If Michigan taxes away more individual income, even if some portion goes toward public health, most residents will have a little less to spend on taking care of themselves.

Venezuela is an extreme and telling example. The economic crisis of the past eight years is a long fall from the 1920s, when it was the wealthiest state in Latin America. The national currency is now virtually worthless, with an inflation rate of about 3,650 percent from 1973 to 2023, having hit an-all time high of 344,509 percent in February 2019. Over half of Venezuelans live in poverty, income inequality continues to widen, and the bottom 10 percent barely survive on $8 per month. People are starving and diseases are surging: measles, AIDS, tuberculosis, diphtheria, malaria. Maternal and infant mortality rates have increased during the crisis. Venezuelans are leaving the country in droves, many destined for the United States.

While cooperation between the worlds of health care, political science, and economics exists, it appears more is needed. Economist Mancur Olson asked the question, “Why do some countries prosper and others do not?“ Other than where a country lacks sufficient resources (capital and labor), he found that the problem was that some countries do not have sufficient short- and long-run institutional legal arrangements to enforce contracts and protect property rights. He also found that a stable political system that didn’t over-reward lobbying by special interests was necessary.

Poor, and by extension less-healthy, countries remain so because their economic institutions are hostile to foreign firms and capital, making lending to them exceedingly risky and causing domestic labor and capital to flee. Olsen cited a study showing that new immigrants from countries where average wages were only one-tenth or one-fifth of US wages increased their earnings by 375 percent after moving to the US

The connection with health is more than theoretical. In conjunction, political scientist Aaron Wildavsky wrote in 1980: “In the 100 years from 1870 to 1970, almost every increase in wealth has been accompanied by a corresponding increase in safety from accidents and disease.” He showed in Searching for Safety that “Fundamentally, health progress depends on economic progress.”

Although now generally accepted, this principle is ignored by too many health writers. Government policies including excessive taxation and regulation, directly taking property (like condemning it for private development), and weak patent and copyright protection can negatively affect wealth in rich and poor countries.

People living on the margins are usually the first to feel the sting and the last whose struggles get noticed. When bad policies affected Greece in the past decade, the affluent were out “drinking and talking until well past midnight” while the poor were sleeping on sidewalks and public parks. A 93-year-old woman told The New York Times she had to take a bus to “fetch food for herself and her five grandchildren.”

While most people support an economic floor in wealthy places, at some point, wealth transfers and eroding property rights make people poorer. Should we call it coincidence that Connecticut has among America’s highest property taxes and lags behind most states in economic growth? It’s much worse in the developing world, where property rights can lack a formal structure to own a business, reap the rewards of one’s own labor, or the right to collect a debt. When too much red tape exists or jobs are not handed out on merit, pursuing new businesses and education are not always worthwhile. These things ultimately affect health care, particularly with regard to personal-risk-reducing expenditures that are preventive and health-preserving, rather than ex post health care. 

An unequal distribution of strong institutions and economic policies results in poverty, which then results in an unequal distribution of health. Getting institutions and economic policies right is not easy, nor will it be done overnight. While America is deeply divided on economic issues, if we want to measurably improve public health, we can’t ignore them. Pro-growth policies such as those reducing taxes, doing away with regulations that prevent health providers from opening or growing, and tort reform, eventually leave more wealth in the hands of its poorer citizens. Public health is then improved through personal risk reduction and individuals improving their own outcomes in the ways best suited to their circumstances, rather than central dictates.

Wealth precedes health. Difficult to achieve, but not impossible.