Want to Reduce ‘Deaths of Despair’? Try Antitrust Enforcement.
This week, Walgreens and CVS announced that they would pay around $5 billion each to settle thousands of lawsuits related to the opioid crisis. The settlements do not entail an admission of guilt on the part of the companies for the role they played in saturating working-class communities with the addictive prescription drugs that helped precipitate the ongoing opioid crisis.
The opioid crisis and overdose deaths more generally represent one facet of a larger troubling societal phenomenon, which economists Anne Case and Angus Deaton characterize as “deaths of despair”—a grim category comprising “suicide, overdoses, and alcoholic liver disease and cirrhosis.” In their 2020 book Deaths of Despair and the Future of Capitalism, they argue that these deaths are reflective of worsening conditions across the board for the working class.
For the first time since the turn of the century, American life expectancy rates show a consistent decline, a trend that was apparent even before the COVID pandemic. Case and Deaton note that if one were to extrapolate from the positive life expectancy trends at the end of the twentieth century and add up the difference between the actual life expectancy through 2017, the result would be about “600,000 deaths of midlife Americans who would be alive if progress had gone on as expected.” While COVID has dulled our ability to register shock at loss of life at this scale, the right image can still convey the sense of both the tragedy and the violence. Case and Deaton write that 158,000 American lives were lost to deaths of despair in 2017, the equivalent of “three full 737 MAXs falling out of the sky every day, with no survivors.”
How might we stop this gruesome march of death? Case and Deaton’s account of the primary drivers of deaths of despair—namely, “the failure of the healthcare system and other problems of the capitalism we have today[, and] particularly persistent upward redistribution through manipulation of markets”—suggests an unusual political approach to the problem that could help to reverse the trend.
First, it’s worth clearing up some misconceptions about deaths of despair. For starters, the problem is not just one of unique pressures on those in middle age. The research suggests that those who survive midlife are still at risk in their elderly years. And deaths of despair are hitting younger cohorts at earlier ages: “The later you were born, the higher your risk of dying a death of despair at any given age,” Case and Deaton write. For example, new research shows that between 2015 and 2019, excessive drinking accounted for one in five deaths among American adults age 20 to 49.
Nor is it just white men who are struggling. Men and women are affected in almost equal numbers for “each component—suicide, drug overdose, and alcoholic liver disease—examined separately” under the “deaths of despair” heading, and other racial communities have also been deeply affected: Case and Deaton grimly report that “death certificates listing fentanyl can account for three-quarters of the [20.8 per 100,000] increase in midlife African American mortality” between 2012 and 2017.
But while the problem is not neatly limited by differences of age, gender, or race, an important correlation emerges when we look at it in terms of the increasingly entrenched urban-educated/rural-isolated divide; along that axis, there is a clear breakdown. Perhaps unsurprisingly, “the largest increases in death rates [between 1999 and 2017 are] in West Virginia, Kentucky, Arkansas, and Mississippi, all states with education levels lower than the national average.” Conversely, during the same period, “the only states where midlife white mortality fell by a noticeable amount were California, New York, New Jersey, and Illinois, all states with high levels of education.” The authors describe a “suicide belt” that “runs along the Rocky Mountains, from Arizona in the south to Alaska in the north” and includes “the six highest suicide states”: Montana, Alaska, Wyoming, New Mexico, Idaho, and Utah. Those states, Case and Deaton note, “all are among the ten states with the lowest population per square mile.”
A four-year degree has become an escape rope from the conditions that correlate with higher rates of deaths of despair:
In 2017, those with a bachelor’s degree or more earned twice as much as those without, which speaks to the advantage of the more educated in life. That their risk of dying in midlife is only a quarter of that seen for those without a bachelor’s degree speaks to their advantage in death. . . . The widening gap has come not just through an increase in the earnings of the college educated but also through a reduction in the earnings of those without a four-year degree.
“Deaths of despair,” then, have become a plague disproportionately affecting rural, isolated, working-class communities that have been locked out of the economic gains of the last decade. The epidemic is particularly acute for those individuals whose career prospects have dimmed following the losses of local industries that once provided good jobs for those without college degrees.
While deaths of despair are tragic individual outcomes that cause further harm to the families and loved ones of those who have lost their lives, the trends that Case and Deaton have studied have high-level structural, impersonal, and economic causes. Capital investment has become concentrated on the coasts and favors certain industries like tech startups; domestic manufacturing has declined and factories have closed; union membership has gone down (notwithstanding this year’s uptick). In areas where physical labor provided the foundation for the local economy, drug companies like Purdue Pharma introduced addictive painkillers and pressured doctors to overprescribe them; widespread, life-altering addiction resulted, and when the prescription drugs were withdrawn, illicit ones took their place—with the last and worst, the synthetic opioid fentanyl, chasing tens of thousands of Americans into an early grave.
While this is a somewhat familiar narrative to those who have followed the news about the opioid crisis, it is somewhat regionally specific; it can feel remote to those who have not seen these vicissitudes play out in their own communities. Here, then, is another narrative about the economic pressures that contribute to deaths of despair—one that might bring these realities much closer to home.
To start, let’s say your employer switched insurance plans last year, so your premiums have gone up. On top of that, the price of the prescription drug you’ve been taking for a decade inexplicably jumped. And on top of that, the hospital just sent you a four-figure bill for the birth of your baby, which included the “holding your newborn for the first time” fee. The hospital, by the way, used to be a locally owned community affair, but it recently got bought out by We Are Healthcare Monopoly Incorporated, which owns and operates every hospital in a 50-mile radius. Of course, who are you to complain? At least you have a nearby hospital to go to. (And at least your mother-in-law didn’t die in the back of an ambulance on the way to a hospital 30 minutes away!) But then again, that ambulance ride wasn’t free—in fact, you took a serious hit on that, too, because the ambulance is owned by a monopolizing private equity firm.
This scenario reflects larger trends in the American healthcare sector, as Case and Deaton have described them:
- “Hospitals that are local monopolies charge 12 percent higher prices than do hospitals that face competition. Moreover, when a hospital merges with another hospital within five miles, competition between hospitals goes down, and prices go up by 6 percent on average.”
- “Ambulance services and emergency rooms have been outsourced to physician and ambulance service companies, and their doctors and ambulances are sending ‘surprise’ medical bills. Many of these services are not covered by insurance, so that patients are billed even when they are taken to a hospital that is part of their network and covered by their insurance.”
- “In a private system, insurance companies, doctors’ offices, and hospitals spend huge sums on administration, negotiating rates, and trying to limit expenses.”
Here, finally, is where we can begin to discern a political approach to many of the problems that have fueled the epidemic of deaths of despair. That’s because every part of the second, more personal narrative is the result of a lack of antitrust enforcement.
Case and Deaton’s analysis takes up the ongoing consolidation of American business, an important context for understanding anticompetitive practices among U.S. companies today. As they write, “firms less than five years old accounted for half of all firms in 1980 but only a third in 2015; they accounted for a fifth of all employment in 1980 but only a tenth in 2015.” Not only does this loss of competition stifle genuine innovation, but it also means that “firms have power to artificially lower the wages of their workers and artificially raise the prices of their goods”—a recipe for just the sort of immiseration of working-class people that research on “deaths of despair” helps to track.
The authors call this process “upward redistribution.” It can be imagined as a corollary to the theory of “trickle-down economics”: While the workers at the bottom of the economic pyramid catch handfuls of small bills through their compensation and benefits, the majority of corporate profits are packaged and sent to those at the top.
Situations like this are becoming more common. For instance, major insurance providers are opening their own health clinics, creating the ironic impression of a “single-payer” healthcare setting. Meanwhile CVS, a gargantuan enterprise following decades of mergers, is aggressively buying out the prescription drug market using underhanded tactics to grow the company’s formidable power over the country’s pharmaceutical care.
Normally, competition lowers prices and benefits consumers through this basic mechanism: New businesses enter the market with more innovative products and lower prices than those of the established players, and this forces the latter to reduce their prices and innovate to match efficiency. The game changes, though, when the established players become big enough to buy out newcomers and weaker competitors—or, if they won’t sell, to drop prices until far below market rates. The big ones can afford to run a loss for a period if doing so might force their competitors out of business or into a merger. At that point, with competition dried up, the remaining three or four monopoly powers can jack up prices and settle into complacency.
These sorts of business practices are exactly what we created antitrust law to prevent or punish in the first place. But in recent decades, the government has been reluctant to enforce antitrust laws. Consequently, the anticompetitive monopolizing trend is apparent in every industry and touches virtually every aspect of our consumer lives. As high-profile mergers continue, we have fewer cell phone service providers, fewer airlines, fewer banks and financial services companies, fewer manufacturers of baby formula and washers and dryers. Even the sport of cheerleading is a monopoly now.
To summarize, as real wages fall for workers and precarious work continues to rise, companies with monopolistic power raise prices above market rates for products of all kinds, including necessities, putting a further squeeze on working people. And if those people get sick or injured, they face the possibility of needing to incur unthinkable amounts of debt to recover, sometimes even if they have good insurance—thanks in part to consolidating trends in the healthcare industry. (This eventuality stays visible in the news in part because of how often survivors of mass shootings need to raise money through crowdfunding sites to cover their medical expenses.)
Given the proliferation of these mutually reinforcing stressors—and still others that aren’t as clearly rooted in anticompetitive behavior, like the housing supply crisis that is causing rents and home prices to balloon—it makes sense that Americans are increasingly turning to numbing agents, that rearguard action of the spirit amid encroaching misery and despair.
The free market is an important engine of growth, prosperity, and innovation. But in too many industries, the free market has been deeply compromised by anticompetitive practices and merger-driven consolidation, which has economically immiserated working-class people and pushed many of them towards risky coping strategies, including substance abuse.
Thankfully, the government has tools in its belt that it can use to effectively address this problem—it just needs the political will to bring them out.
Case and Deaton propose a variety of remedies that we would all do well to consider: strengthening unions while opposing “right-to-work” legislation, implementing wage subsidies and tax credits that disincentivize stock buybacks and instead reward corporations for strengthening productivity, enforcing antitrust law to break up current monopolies and discourage future ones from forming, prohibiting noncompete agreements designed to trap workers rather than to protect trade secrets, discouraging rent-seeking behavior, and bringing the regulatory hammer down on price collusion.
Many of these ideas enjoy bipartisan support, with some Republican members of Congress and conservative policy wonks arguing for several of these initiatives. Regardless of the partisan ratios of the next congress, making opposition to anticompetitive corporate behavior a legislative and enforcement priority would go a long way towards easing the economic burden on the lives of ordinary Americans—and that in turn could help to alter our country’s grim trajectory when it comes to deaths of despair.
But to do any of that, our legislators must embrace public policy and use every governmental tool available to them in order to check corporate power and protect consumers and workers. It’s clear what will continue to happen if they don’t.