Below are my comments on a panel held over the weekend in India to celebrate the opening of the University of Chicagoâ€™s new Delhi Center. Regular readers will recognize much of what’s here. I hope it is of interest.
Thank you very much for the opportunity to speak on this panel for such a special occasion.
I will use my time to discuss some linkages between poverty, inequality, and health. I do so with trepidation, since I can see some of my bettersâ€”James Heckman, Jean Dreze, and Martha Nusbaum to name a fewâ€”are here today in this audience.
Itâ€™s humbling for any American to speak on these topics when so many great Indian political economists have made fundamental contributions. Many of these men and women were motivated by their first-hand observation of famine, deep poverty, gender and caste inequality. These matters are fundamental in the efforts of the worldâ€™s largest democracy to address the post-colonial development challenges of one billion people.
These matters have wider application, as well. Scholars, policymakers, and citizens want to know whether, when, and why various forms of inequality harm the most vulnerable citizens. The truth is, inequality sometimes is harmful, sometimes not. The mechanisms are complicated, and often indirect. We canâ€™t always tease them out, which doesnâ€™t mean that they arenâ€™t there.
My own work concerns domestic US poverty and public health policy. Even so, Amartya Senâ€™s Poverty and Famines: An Essay on Entitlement and Deprivation was probably the most important book of my graduate career. His combination of rigorous economics with a passionate commitment to equality and human flourishing was revelatory to me.
I assign my introductory microeconomic students a stylized problem modeled on Senâ€™s analysis of the Bengal famine. Itâ€™s a parable, of course. Like most parables, itâ€™s been cleaned up a bit, crystalized to its essentials before inclusion in the sacred canon of economics problem sets. The basic mechanics remain useful to elucidate one possible pathway through which inequality can undermine public health….
As many of you know, Sen argued that few famines are the inevitable result of an insufficient food supply. In almost every case, enough foodstuffs are available to provide adequate calories for everyone who must be fed. Rather than a literal supply failure, famines are typically a more complicated economic and political process. Rapid changes in wages and prices leave already-severely-vulnerable populations without the purchasing power to secure adequate amounts of food.
Consider the following simplified model. Urban industrial workers experience rising wages due to pressing demands for munitions and uniforms within the British war effort. Rising incomes increase urban food demand. The national agricultural sector is relatively sluggish in raising production to meet this demand.Â So food prices rise.
As food prices rise, wages in rural areas are relatively rigid. Agricultural workers can no longer afford to buy sufficient food supplies to feed themselves and their families. In the long-run, these connected markets will probably equilibrate. Unfortunately many people will starve before this happens.
At one level, this is a simple economic story of shifting demand curves and thus shifting equilibrium prices. Rising inequality harms those at the bottom because their fellow citizens with greater incomes outbid them for a scarce resource. Here the term â€œscarce resourceâ€ has a particular meaning rooted in an inelastic supply. If the supply curve for food were more price-elastic, rising urban wages would have been far less detrimental to other segments of the society.
We heard yesterday about bottlenecks as a source of inefficiency within the current Indian economy. Supply-side bottlenecks matter for equity, too. When the supply of basic necessities is limited by production bottlenecks, weather, or by other constraints, rising demand will create shortages and raise prices that disproportionately harm those at the bottom of the economic scale.
One can tell similar, albeit less dire stories in other domains such as housing. If the worldâ€™s rich people wish to live in London or New York, this need not be a problem for less-affluent citizens of these cities. If we have low barriersâ€”as Chicago basically does–to new housing construction, this is a good thing. If local policies are more rigid, rents will rise.
An ironic development around the world is the way growing middle-class demand for personal health services becomes a serious threat to population health. In areas from East Africa, to the West Bank to Western China, economic growth enlarges the constituency of middle-class people who want western-style personal medical services. Thereâ€™s nothing selfish or surprising in this. Rising constituencies of middle-aged, middle-class people wanted the same services I want for myself and for my family. Skilled medical professionals in each of these places would like to provide their patients with cardiac bypass surgeries and advanced cancer care. Many have the expertise to provide such care if the resources were made available.
Yet rising demand raises wage rates for nurses and other scarce professionals, straining public budgets and hindering efforts to deploy a strong medical and public health workforce. Without proper coordination, this process can place basic services out of reach for many people.
Superficially, these are economic stories not political ones. Except when we consider how governments respond to these economic pressures. In principle, policymakers in China or East Africa could constrain the growth of medical services to concentrated middle-class constituencies. Their failure to do so reflects the obvious interest-group politics. These greatly matter when we ask when policymakers intervene and when they sit passively by in response to consequential market disruptions. Repeatedly, concentrated constituencies often derive disproportionate benefit while critical population health tasks are left neglected.
In the Bengal famine, social factors and colonial policies that inhibited rural-urban mobility made things worse. The political weakness of the most-affected and vulnerable individuals and communities reduced political pressures for an effective response. A politics of neglect and impunity operated, whereby far-away policymakers with other priorities, who after all had a war to fight, faced too little pressure for an urgent response. These same policymakers faced too little accountability for their failure to help harmed millions of people.
Our Delhi stetting is humbling for a second reason, because analogous political dynamics operate in American public health policy. The political and market failures are less lethal given our vastly greater wealth. The harms remain significant and unnecessary.
Itâ€™s a remarkable challenge. Our country spends $2.9 trillion on medical care. That exceeds Indiaâ€™s entire gross domestic product. Yet we leave one-sixth of the adult population uninsured. Cancer patients and victims of serious accidents risk losing their homes. Millions of Americans deplete their savings because they live with disabilities or chronic illnesses.
It would require ten hours rather than ten minutes to delineate President Obamaâ€™s worthy, imperfect effort to address this situation through the Affordable Care Act, Rather than induce narcolepsy on the details, I will just Â note a few striking things.
Within our countryâ€™s complicated federal-state governance structure, one pillar of the Affordable Care Act provides virtually complete federal funding for states that expand their Medicaid health insurance program to cover low-income adults. Initially the federal government will pay 100% of the costs. The federal share gradually drops to 90%. This may understate the subsidy since much of the new spending will support state and local government: public hospitals and clinics, medical services provided within the criminal justice system, and other public-sector entities.
Despite the financial (and thus political) pressures, many states have refused to take the money. Thereâ€™s no getting away from the reality that health reform is President Obamaâ€™s centerpiece domestic policy achievement.
Beyond party politics, some other disturbing variables matter, too. Statistical analyses led by my colleague Colleen Grogan indicate a depressing fact: When a large fraction of a stateâ€™s poor people are non-white, that state is markedly less likely to expand coverage.
This politics of neglect and impunity commands our attention. Five million poor people are being denied health coverageâ€”with surprisingly little public outcry. These five million include some of the poorest people in America. Many have chronic physical or mental health conditions.
Officials who deny this Medicaid coverage are placing a large bet that the people being shut out of Medicaid coverage wonâ€™t matter for electoral politics.
Maybe this bet is well-placed. With so many constituencies reliably insured –the steadily-employed, the elderly, veterans, and others–those who remain outside the system have become a politically marginal constituency. And officials are counting on potential Medicaid recipients to co-conspire in their own misfortune and exclusion. This group of poor people is reliably Democratic, at least when people bother to vote. The uninsured are often disorganized, politically apathetic and disengagedâ€”and so can be denied basic insurance coverage with impunity. Certainly less media attention is being paid to Medicaid expansion than is being paid to the markedly smaller number of more affluent and healthy Americans whose coverage is sometimes disrupted by a complicated new law.
An imbalance of social provision should command our attention, too. Across the nation, we are building billion-dollar advanced tertiary care centers. Yet we struggle to provide basic public health services. And we struggle to finance non-health services whose impact on individual health is often profound. There is increasing awareness within the heath sector itself that this is problematic.
I recently crossed paths with an 18-year-old unmarried mom who cares for her toddler. She and her mom had a bad argument, and the young woman was kicked out of the house. Police drove Jessica and her toddler to the station, and suggested that she call our general services telephone number 311. Someone dutifully arrived to drive Jessica and her toddler to a gritty shelter. The driver and the shelter manager signed some forms. As far as I know, that was pretty much all the social service Jessica would receive.
Jessica slept that night with the baby next to her in a bassinette within a partitioned communal space, in a shelter that includes men with serious psychiatric concerns. She knew she had a bed for the night. She had no idea whether or what any social service professional was doing to help her.
She called my wife and I the next morning from a local grocery store. She was trying to buy some formula with WIC coupons. No one at the shelter had provided anything for the baby. As far as I know, no one was doing anything for her beyond providing a bed. If she attended a prayer service, she could get a nice lunch.
Not sure what to do, I contacted the social workers in our own hospital’s adolescent ob-gyn section. I reached a woman named Stephanie Mistretta, who happens to be a masters-degree graduate of my school. Stephanie intervened to ensure that Jessica and her baby got what they needed–referral to a respected mother-only facility. Stephanie drove across town to meet with Jessica, delivering diapers and other basic supplies.
Stephanie did a fabulous job. It doesn’t detract to mention that much of what she did was vanilla ice cream social work, conducted by someone with the time and the skills to do it right. She established a human connection and figured out what Jessica really needed. Someone else couldâ€”and shouldâ€”have done the same thing every time a homeless teen mother and a toddler engaged our 311 social service system.
I write for the Washington Postâ€™s Wonkblog section. People allow me into their lives to discuss their various challenges ranging from intellectual disability to quadriplegia, to living in poverty with HIV disease.
One basic issue usually lurks, and is as plain as the smile on peopleâ€™s faces. Whenever I meet someone in difficulty, or someone who has experienced a rough patch in life, missing teeth or other unaddressed dental problems provide a stigmatizing reminder thatâ€™s as plain as the smile on his face.
The income and education gradients are hardly unknown. Over four years, participants in the Florida Dental Care Study with incomes below the poverty line lost three times as many teeth as those with higher incomes.
During the great recession, states and localities further curtailed oral health services for low-income and disabled adults who receive Medicaid insurance. Like many other states, our Illinois Medicaid program doesnâ€™t cover basic services from cleaning to filling cavities to X-rays, let alone root canal surgery. You can get an emergency tooth extraction. Thatâ€™s about it.
My student Pierre Rowen and I spoke with patients in the waiting room of a primary dental care charity clinic trying to fill the gaps here. I met a homeless man named Robert, he pulled his lips back to show the damage.Â He has unfilled cavities. He needed a crown. He is waiting on a long-overdue root canal. It would cost about $1,000, which he doesnâ€™t have. He didnâ€™t have the $50 for a basic cleaning. So he hasnâ€™t had his teeth cleaned in two years. He reported: â€œI eat on one side. I canâ€™t chew, you know, because the teeth are very weak.â€
I met a young woman named Doris who was in pain from a bad toothache. She had been trying to get help for six months. She had gone to a â€œbootlegâ€ storefront clinic to get her teeth cleaned last summer. She canâ€™t afford much else.
â€œI love my teeth, you know,â€ she told me. â€œUnfortunately, this one has to go. I waited too long. I could have gotten it filled if I had gotten the help earlier. Now itâ€™s too late.â€
Itâ€™s certainly not the worst thing happening within a short walk of this room. Four hundred yards from here, I stepped past people with mangled limbs sprawed across the sidewalk. They were begging for money.
So Iâ€™m almost embarrassed to mention loss of a tooth in this city and in this gathering. Itâ€™s just so needless that this sweet young woman will lose it over something like this. Despite spending $2.9 trillion, we canâ€™t get this basic thing right.
Alongside the rigorous policy analysis we must perform to fix these problems, we canâ€™t forget the individual faces of those with the most at stake. Neither can we forget the imbalance in political power and social influence that undergird the lack of effective public action when small and large injustices are done.
All too often, the normal mechanisms of democratic politics–distorted by the usual workings of interest-group politics and group inequalityâ€”are ill-equipped or simply uninterested in responding to human needs.
Attention must be paid to these failures–in India and in the United States.