On August 26, Judge Thad Balkman delivered a $572 million judgment against pharmaceutical giant Johnson & Johnson for the company’s role in fueling the opioid epidemic in Oklahoma. In the discussion that follows, Stanford Law Professors Michelle Mello and Nora Freeman Engstrom discuss the decision and how other cases tied to the national opioid crisis are developing.

The Oklahoma decision took many onlookers by surprise. How did the case unfold? And what did Judge Balkman find? On Monday, Cleveland County District Judge Thad Balkman of Oklahoma issued a judgment that capped off a long and closely-scrutinized trial wherein the Oklahoma Attorney General faced off against Johnson & Johnson (J&J), claiming that J&J contributed to the opioid epidemic that has devastated the state of Oklahoma.

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Stanford Law Professors Michelle Mello and Nora Freeman Engstrom

To understand the verdict, a bit of background is helpful. When Oklahoma initially sued, it cast the net broadly, asserting claims against several defendants under several causes of action.  Certain defendants (namely, Purdue and Teva) chose to settle rather than roll the dice at trial. (Purdue, the maker of OxyContin, agreed to pay Oklahoma $270 million and Teva, one of the world’s leading providers of generic drugs, $85 million; neither admitted wrongdoing.)  Further, over time, Oklahoma’s various causes of action got winnowed down to the singular claim that J&J had created a public nuisance by aggressively and deceptively marketing opioid products to Oklahoma’s doctors and patients.  This posture meant that Oklahoma’s victory at trial was far from a foregone conclusion, as public nuisance claims can be very hard to prove, particularly in cases that relate to dangerous products.

With that table set, the trial began on May 28, 2019.  In a crowded courtroom in Cleveland County, it stretched on for nearly seven weeks and featured dozens of witnesses and more than 800 exhibits. The trial was a bench trial, meaning there was no jury, but there was a written opinion explaining the judge’s decision.  Judge Balkman’s 42-page opinion offers a cogent summary of the evidence and governing law and, broadly, vindicates Oklahoma’s litigation strategy. The opinion finds that J&J engaged in a deceptive marketing campaign designed to convince Oklahoma doctors and the public that opioids were safe and effective for the long-term treatment of chronic, non-malignant pain. Further, this “false, misleading, and dangerous marketing” caused “exponentially increasing rates of addiction [and] overdose death,” which ravaged the Sooner State. The picture Judge Balkman draws is stark and, for J&J, devastating.

Are individuals suing drug companies too? Are there class action cases that are relevant?

There are some suits by individuals, but we don’t believe that’s where the big money damages—and the real social impact of the litigation—will be.  More important is the pending federal multi-district litigation (MDL), which consolidates nearly 2,000 individual federal lawsuits brought by cities, counties, municipalities, and tribal governments in a single action before Judge Dan Polster in Cleveland, Ohio. Additionally, 48 states have initiated separate litigation, with a lineup of claims and defendants similar to the MDL.

Does this win for Oklahoma mean these other plaintiffs have an easy road ahead?

Not easy, but potentially easier. The Oklahoma case is what we call a bellwether. Like the ram that leads the other sheep this way or that, the bellwether trial doesn’t control the path of future litigation. But it does go first, and it helps to indicate trends.

As a bellwether, the big verdict here is very reassuring to the many states, counties, municipalities, and tribes suing opioid makers, distributors, and retailers, and it is, correspondingly, very disturbing for those who made and sold opioids to the American public.  The verdict suggests that this litigation has legs, and that judges and juries may be willing to pin blame not just on Purdue, the maker of OxyContin, but on others who played an arguably less central role in fueling this public health crisis.

What is striking is how damning Judge Balkman’s factual conclusions about J&J’s conduct are, and how similar they are to the allegations made against other opioid manufacturers in other cases.  All the things he objected to regarding J&J’s marketing practices are things that others, too, allegedly have done. Some of them are things that multiple companies banded together to do. Plaintiffs’ attorneys should be feeling pretty confident about their chances of persuading other courts that those practices are problematic.

Is Oklahoma free to use the award as it wishes? Will the state share some of the award with the people who died or suffered in the opioid crisis (if the decision is upheld on appeal)?

The damages, in this case, are intended to fund Oklahoma’s “nuisance abatement plan.”  That’s the remedy in a public nuisance case: The defendant has to pay to clean up the mess it made. In this case, Oklahoma provided a detailed plan laying out what would be needed to abate the opioid problem in the state. The costs added up to $572 million for the first year, and that’s what the judge awarded—not the $17 billion Oklahoma sought for a multi-year abatement effort.

The plan specifies that the money will be used for opioid use disorder screening, prevention and treatment ($292 million), housing and other services for those in recovery ($32 million), continuing medical education programs ($108 million), a pain management benefit program ($103 million), treatment of neonatal abstinence syndrome ($21 million), and other services.  Individuals won’t be direct recipients of the funds, though they may receive the services funded.

Legally, what happens next?

J&J has vowed to appeal the “flawed” Oklahoma judgment, and we expect that the judgment will be appealed, first to Oklahoma’s intermediate, and then, likely, to its supreme, court.  More immediately, though, attention will turn from Oklahoma to Ohio.  The first bellwether trial in the MDL, involving claims from Ohio’s Cuyahoga and Summit counties, is scheduled to begin on October 21.

Even as they prepare for trial, however, lawyers for both plaintiffs and defendants are also, no doubt, continuing to work toward reaching a broad and encompassing settlement.  When Judge Polster was first assigned the MDL back in January 2018, he made no bones about his desire to do “something meaningful to abate this crisis”—and to do it quickly.  It hasn’t been easy to execute on that, which isn’t surprising given the unprecedented magnitude and complexity of the litigation.

Still, we expect that, sooner or later, the opioid litigation will settle.  Indeed, even as we write, news is breaking that Purdue and the Sacklers may be in the midst of a negotiation whereby Purdue would declare bankruptcy and the Sacklers would contribute a cash payment of roughly $4.5 billion-plus relinquish ownership of the company, in return for peace with plaintiffs.

But even forging a settlement involving just those two entities is tricky—and forging a broader settlement will be exponentially harder for a number of reasons.  One is that any truly global agreement needs to pass muster with a range of defendants, some of whom have comparatively shallow pockets, and all of whom sold (or made or distributed) different products, at different times, in different quantities, in different states.  And, on the other side of the table, any settlement agreement needs to get buy-in from both those plaintiffs in the MDL and also state attorneys’ general, who have their own distinct set of priorities and interests relating to their separate lawsuits.  Further, because only a small proportion of eligible cities and counties have joined the MDL to date, any global settlement needs to somehow—equitably but firmly—close the courthouse door on those potential future plaintiffs.  None of this will be easy to accomplish.  But whenever new information reduces uncertainty about how courts would resolve a legal dispute, settlement becomes more likely—and, here, the Oklahoma verdict makes a significant contribution.

 

Nora Freeman Engstrom, Professor of Law and Deane F. Johnson Faculty Scholar, is a nationally-recognized expert in tort law, legal ethics, and complex litigation. Her work explores the day-to-day operation of the tort system—particularly its interaction with alternative compensation mechanisms. Michelle Mello, Professor of Law and Professor of Health Research and Policy (School of Medicine), is a leading empirical health scholar and the author of more than 150 book chapters and articles, including “Drug Companies’ Liability for the Opioid Epidemic,” recently published in the New England Journal of Medicine.  

Breast cancer is the second-most common cancer in the United States in women after nonmelanoma skin cancer — and the second leading cause of cancer deaths, after lung. 

Of the estimated 252,710 women who were diagnosed in 2017 with breast cancer, 40,610 died of the disease, or about 16%.

The odds of death from breast and ovarian cancer grow even greater when women have genetic mutations known as BRCA1and BRCA2. The mutations — which can make it harder for tumor-suppressing proteins to attack cancer cells — occur in 1-in-300 women and account for 5% to 10% of breast cancer cases and 15% of ovarian cancer cases.

The risks of ovarian and breast cancer are as high as 45% and 70%, respectively, in women carrying the genetic mutations. So the U.S. Preventive Services Task Force in 2005 and 2013 recommended genetic counseling for women with a high-risk family history of breast or ovarian cancer.

The Task Force is updating its recommendation for primary-care clinicians: They should now consider women with previous breast cancer or ovarian cancer who are considered cancer-free for genetic counseling — and more explicitly include ancestry as a risk factor.

The recommendations were published on Aug. 20 in the Journal of the American Medical Association.

“Some women can benefit from risk assessment, genetic counseling, and genetic testing, but not all women need these services. We suggest women talk to their clinicians and decide on best next steps together,” said Stanford Health Policy’s Douglas K. Owens, chair of the independent, voluntary panel of national experts in prevention and evidence-based medicine.

The Task Force notes that some ancestries are associated with increased risk of BRCA1/2mutations. An accompanying editorial in JAMA by Susan Domchek, MD, and Mark Robson, MD, notes that 1-in-40 random individuals of Ashkenazi Jewish descent have 1 of 3 specific BRCA1or BRCA2founder mutations, compared with 1-in-300 in the general population.

Genetic risk assessment and BRCA1/2mutation testing is a multi-step process that begins with identifying patients with a family or personal histories of breast, ovarian, tubal, or peritoneal cancer; family members with known harmful BRCA1/2mutations; or ancestry associated with harmful BRCA1/2 mutations. 

Clinicians should begin with a family and personal history for all women, Owens said.

“If this raises concerns about increased risk, the Task Force recommends that primary care clinicians use one of the available validated risk-assessment instruments to further assess the risk for BRCA1/2mutations.”

If the instrument indicates increased risk for BRCA1/2mutations, clinicians should refer patients for genetic counseling. Women found to be at increased risk from genetic counseling should then be referred for mutation testing, Owens said.

Listen to this podcast about the new USPSTF recommendations.

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In another accompanying editorial published by JAMA Network Open, researchers note that since the new recommendations add ethnicities and ancestries associated with BRCA1or BRCA2gene variants, the number of testable patients has now been expanded.

“With the increase in women eligible for counseling and testing under these recommendations and the explicit directive for primary care practitioners to consider clinical genetics training … the oncology community should welcome the opportunity to better integrate comprehensive cancer risk assessment and genetic testing for BRCA1and BRCA2into routine preventive medicine,” they write.

Population-based risk assessment may increase insurance coverage and clinician-directed access to cancer genetic testing for up to 50% more women in the primary care setting than family history-based risk assessment alone, writes Olufunmilayo I. Olopade, MD, an expert in cancer risk assessment at the Center for Clinical Cancer Genetics and Global Health at the University of Chicago.

She and her co-authors note that researchers are also finding higher BRCA1and BRCA2 mutation frequencies across more diverse populations than previously realized. The genetic mutations have been identified in 12% to 18% of African-American patients with breast cancer; Hispanic high-risk patients living in the southwest of the United States, with a personal family history of breast or ovarian cancer, were found to have mutations rates as high as 25%.

Yet not as many African-American and Hispanic women get tested for the BRCA gene compared with white women, due to less awareness about genetic testing, distrust in the medical system, lower education levels and lack of physician referrals. 

And then there’s the cost.

“The cost of testing, now at $250 out of pocket if not covered by third-party payers, continues to remain an understandable point of concern for patients and the health-care system, but can be consciously addressed to reduce disparities in testing,” they write.

Olopade and her colleagues note there are fewer than 700 cancer-specific genetic counselors in the United States, relative to the more than 300,000 primary care physicians.

“Expanding access to genetic counseling and testing across the medical spectrum of care to primary care is not only appropriate, but also critical,” they said.

Americans have witnessed repeated mass shootings. The carnage in Texas and Ohio last weekend claimed another 31 lives and has left the nation stunned and angry.

Many are demanding that members of Congress pass tougher gun-control laws; others blame mental health and violent video games for the rampant shootings.

Stanford Health Policy’s David Studdert — an expert on the public health epidemic of firearms violence — acknowledges that mass shootings are on the rise in the United States.

“It’s been a horrific weekend,” said Studdert, a professor of law at Stanford Law School and professor of medicine at Stanford School of Medicine. “Experts now generally agree that mass shootings are becoming more common — and that a common thread is disaffected young men who have access to high-caliber, high-capacity weapons.”

Both suspects in the Dayton and El Paso shootings fit this profile.

Studdert notes, however, that while mass shootings have become the public face of gun violence, they account for less than 1% of the 40,000 firearm deaths each year.

“So as a public health researcher, I do care about mass shootings and I am interested in understanding and their causes — but the focus of my ongoing research is the other 99 percent.”

Largest investment in firearms research in two decades

It’s that focus the Studdert will be pursuing in a recently-awarded $668,000 grant from the National Collaboration on Gun Violence Research. The private collaborative’s mission is to fund nonpartisan, scientific research that offers the public and policymakers a factual basis for developing fair and effective gun policies.

Studdert, Yifan Zhang, a statistician with Stanford Health Policy, and Stanford political scientist Jonathan Rodden are working with colleagues at UC Davis, Northeastern University and Erasmus University Rotterdam on the Study of Handgun Ownership and Transfer, or LongSHOT.

The team is following several million Californians over a 12-year period to better understand the causal relationship between firearm ownership and mortality. They launched in 2016 with the initial goal of assessing the risks and benefits of ownership for firearm owners.

“The implications of firearm ownership for owners is important because they usually are the ones making the decision to purchase and own,” Studdert said. “But we knew from the beginning that this was only part of the picture. The presence of a firearm in the home may also have health implications for the owners’ family members.”

In the new study, the researchers will identify the cohort of adults in California who live with firearm owners but are not themselves gun owners, and then compare their risks of mortality to a group who neither own weapons, nor live with others who do.

Surprisingly little is known about the “secondhand” effects of having guns in the home.

“Existing studies don’t differentiate between owners and non-owners within households, and that is something we have the ability to look at,” Studdert said. “And a very large proportion of non-gun-owners who are living in homes with guns are women — so this is a group that has really been understudied.”

There is already substantial evidence that a gun in the home is associated with increased risks of suicide. But it is not clear how particular subgroups, such as women who don’t own guns, are affected.

“Because our cohort is so large,” Studdert said, “we will also be able to explore whether gun ownership confers certain benefits, as gun-rights advocates often claim, such as enhanced safety in dangerous neighborhoods.”

Studdert said a better accounting of the risks and benefits that firearm ownership poses for non-owners could help inform decisions regarding gun ownership and storage, as well as policies aimed at improving gun safety.

The politics of federal funding for firearms research

The National Collaboration on Gun Violence Research is funded through private philanthropic donations. It was seeded with a $20 million gift from Arnold Ventures and intends to raise another $30 million in private funding for firearms research.

“It’s the biggest investment in firearms research since the late 1990s,” Studdert said.

Research on the impact and causes of firearm violence was dealt a huge blow in 1996 when the so-called Dickey Amendment was passed by Congress. The law has been interpreted as prohibiting the National Institutes of Health and the Centers for Disease Control and Prevention from conducting firearms research.

Studdert said that the growth of research funding from philanthropies like the Arnold Foundation and Joyce Foundation is a welcome development, but that it will take a large and sustained investment to move the science of firearm violence forward.  

“The core funder of large-scale research essentially vacated the space for 20 years,” he said.  “It’s going to take some time to recover. Developing a generation of researchers with expertise will take give to 10 years. But it has to be done — the size of the social problem demands it.”

Primary care physicians in the United States are increasingly joining multispecialty group practices, such as the Palo Alto Medical Foundation and Stanford Health Care.

Stanford Health Policy’s Loren Baker and Kate Bundorf analyzed how a physician’s single practice vs. a multispecialty practice (MSP) affects health-care spending and use.

Focusing on Medicare beneficiaries who changed their primary care physician due to a geographic move, they compared changes in practice patterns before and after the move between patients who switch practice types and those who do not.  

With their co-author Anne B. Royalty of Indiana University-Purdue University Indianapolis, they found that changing from a single to a multispecialty primary care group practice decreases annual Medicare-financed, per-capita expenditures by about $1,600, or a 28% reduction.

“The effect is driven primarily by changes in hospital expenditures and is concentrated among patient with two or more chronic conditions, suggesting that MSP improves care delivery by reducing hospitalizations among relatively sick patients,” they wrote in their working paper published by the National Bureau of Economic Research.

“The results imply that, while research has shown the potential for physician consolidation to increase prices in some settings, large multispecialty groups also have the potential to lower costs.” 

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Mariam Noorulhuda has seen health disparities up close in the developing world, particularly in Afghanistan, where she interned at a hospital in Kabul last summer.

“There was a shortage of trained health-care professionals, especially women, poor facility conditions, and insecurity,” she said. “Our hospital was minutes away from multiple bombings.”

Noorulhuda is a rising senior and one of six Stanford undergraduates chosen for the inaugural class of Stanford Health Policy Undergraduate Research Fellows. From a variety of disciplines, they will spend this summer partnered with SHP faculty to work on research projects. The students were chosen for their desire to blend health policy with their own undergraduate studies.

Noorulhuda’s Story

Mariam Noorulhuda

That is when she lost another brother, as health-care infrastructure was demolished after much of the capital was destroyed in bombings. When the Taliban targeted her father for his resistance efforts, they fled again and were granted asylum in the United States in 1997. Though raised in the Bay Area, many family members remain in Afghanistan.

“Much of my family has been affected by the brutal impact that war has on health — not entirely through bombs and bullets per say — but through indirect effects like displacement and virtually nonexistent health systems,” said Noorulhuda, a history major with a minor in human rights.

She will work with SHP’s Eran Bendavid, an infectious diseases physician and associate professor of medicine who focuses on the impact of health policies and outcomes in developing countries. He is the fellowship coordinator for this inaugural summer program.

Impact of Health Policy

"There is a growing recognition that health policy impacts just about every facet of human experience and well-being, and we see students picking up on that earlier and earlier,” said Bendavid. “The scholarship at SHP — from the effects of gun ownership or armed conflict to quality of care and guideline development — is an exceptional environment for gaining experience and a deep-dive into health policy research."

The fellowships were made possible with generous support from Stanford political scientist Scott Sagan, and his wife Sujitpan Bao Lamsam, vice chairman of Kasikornbank in Thailand. Sagan is a senior fellow at the Center for International Security and Cooperation who focuses on nuclear strategy, the ethics of war and the safety of hazardous technology.

“One of the great strengths of Stanford is the opportunity for undergraduates to get deeply involved in faculty research projects,” said Sagan, whose daughter Charlotte Sagan (BA, `15) was a research assistant in health policy while at Stanford. “We wanted to help create such opportunities for future students.”

Tiffany Liu

Tiffany Liu just finished her freshman year and has yet to declare her major, though she’s thinking symbolic systems, the study of human-computer interaction.

“Both fields incorporate so many diverging perspectives and methods in order to solve salient issues,” said Liu, who will work with Jason Wang, an associate professor of pediatrics who looks at the use of innovative technology to improve quality of care and health outcomes.

“I’m eager to engage in health policy research through a mix of technical and non-technical methods — we can process and analyze data in so many more interesting ways using computers, and yet we can’t ever lose the humanistic aspect of health initiatives,” Liu said.

Nikhil Shankar, also a rising senior, is an economics major. He jumped at the health policy fellowships because he believes applied economics can have “real-world impact.”

He will be working with SHP’s Grant Miller, a senior fellow at the Freeman Spogli Institute for International Studies and director of the Stanford King Center on Global Development. They will examine the impact of population policy on child health outcomes by gender in China.

Nikhil Shankar

Health-care inequality driven by factors beyond the control of individuals is something that troubles Andrea Banuet, a human biology major and another a rising senior.

“Factors such as socioeconomic status, age, ethnic and racial backgrounds should not determine the type of care an individual can attain — but the really sad reality is that in many parts of our country, it does.”

She believes that policy informed by research has the power to combat institutional biases and promote change in health-care accessibility. She will be working Kathryn M. McDonald, executive director of CHP/PCOR, an expert on health-care quality and patient safety.

Conrad Milhaupt is another rising senior with a double major in economics and public policy.

“I have a passion for the intersection of economics, politics and policy, with a particular focus on health and environmental policy,” said Milhaupt, who will work with SHP’s Jay Bhattacharya, a professor of medicine and economics.

Milhaupt took Bhattacharya’s health economics class in his sophomore year and became intrigued by the discrepancies in costs for health services with only marginal differences in outcomes. He is particularly interested in health care in rural America and ways that changes to our public-private insurance mix may improve access to care and help manage costs.

“Ultimately, I am driven to study this topic by my belief that health care is a human right and that health is an integral aspect of every individual’s life,” he said.

Conrad Milhaupt

Calvin Tolbert, with funding from the Office of the Vice Provost for Teaching and Learning, will work with Eric Sun, an economist and assistant professor of anesthesiology who researches consolidation in physician markets and the economics of pain treatments.

Tolbert is a rising junior majoring in economics and classics, with a minor in mathematics.

“The thing that initially drew me to economics was the fact that it was both math-intensive and pertinent to public policy, which is a keen interest of mine,” he said.

He will be working on a project that looks at physician compensation across countries and the wide gap in costs and access to medical care and drugs.

“This is an area that first caught my eye, when I read accounts of medical tourism in the news, including both people from developing countries who come to America for serious procedures and Americans who visit other countries to receive treatment due to the expense of medical care in this country.”

A new study by Stanford economists shows that giving fathers flexibility to take time off work in the months after their children are born improves the postpartum health and mental well-being of mothers.

In the study, slated for release by the National Bureau of Economic Research on June 3, Petra Persson and Maya Rossin-Slater examined the effects of a reform in Sweden that introduced more flexibility into the parental leave system. The 2012 law removed a prior restriction preventing a child’s mother and father from taking paid leave at the same time. And it allowed fathers to use up to 30 days of paid leave on an intermittent basis within a year of their child’s birth while the mothers were still on leave.

The policy change resulted in some clear benefits toward the mother’s health, including reductions in childbirth-related complications and postpartum anxiety, according to their empirical analysis.

“A lot of the discussion around how to support mothers is about mothers being able to take leave, but we often don’t think about the other part of the equation — fathers,” says Rossin-Slater, an assistant professor of health research and policy.

“Our study underscores that the father’s presence in the household shortly after childbirth can have important consequences for the new mother's physical and mental health,” says Persson, an assistant professor of economics.

Rossin-Slater and Persson are both faculty fellows at the Stanford Institute for Economic Policy Research.

Among their main findings of effects following the reform: Mothers are 14 percent less likely to need a specialist or be admitted to a hospital for childbirth-related complications — such as mastitis or other infections — within the first six months of childbirth. And they are 11 percent less likely to get an antibiotic prescription within that first half-year of their baby’s life.

There is also an overall 26 percent drop in the likelihood of any anti-anxiety prescriptions during that six-month postpartum period — with reductions in prescriptions being most pronounced during the first three months after childbirth.

What’s more, the study found that the average new father used paid leave for only a few days following the reform — far less than the maximum 30 days allowed — indicating how strong of a difference a couple of days of extra support for the mother could make.

“The key here is that families are granted the flexibility to decide, on a day-to-day basis, exactly when to have the dad stay home,” said Persson. “If, for example, the mom gets early symptoms of mastitis while breastfeeding, the dad can take one or two days off from work so that the mom can rest, which may avoid complications from the infection or the need for antibiotics.”

These indirect benefits from giving fathers workplace flexibility are not trivial matters when you consider the health issues mothers often face after childbirth and after they get home from the hospital, says Rossin-Slater, who is also a faculty member of Stanford Health Policy.

Infections and childbirth complications lead to one out of 100 women getting readmitted to the hospital within 30 days in the United States, according to the study.

Meanwhile, postpartum depression occurs for about one out of nine women, and maternal mortality has also been a rising trend over the past 25 years in the U.S.

The study comes as a growing number of lawmakers in the United States vocalize support for paid family leave but have failed to pass federal legislation.

Washington, D.C., and six states have adopted various paid family leave laws, but the U.S. remains the only industrialized nation in the world that does not have a national mandate guaranteeing a certain amount of paid parental leave.

Some federal lawmakers are working on family leave measures and have proposed such legislation over the past few years — including The Family Act, The New Parents Act — but none of them have ever gained enough traction to proceed in Congress.

This new study can help broaden the policy discussions, the researchers say.

The larger context around paid family leave policies is often framed today as a way to help narrow the gender wage gap by giving women more workplace flexibility and fewer career setbacks.

This study, however, shines a light on maternal health costs and how a policy on paid family leave — that includes workplace flexibility for the father — offers more benefits than previously thought, Rossin-Slater says.

“It's important to think not only about giving families access to some leave, but also about letting them have agency over how they use it,” she says.

And when it comes to concerns that fathers might use paid parental leave to goof off instead of spending the time as intended, the researchers say their study should assuage those worries.

“It's not like fathers are going to end up using a whole month to just stay home and watch TV. We don't find any evidence of that,” Rossin-Slater says. “Instead they only use a limited number of days precisely when the timing for that seems most beneficial for the family.”

“For all these reasons,” Persson says, “giving households flexibility in how to use paternity leave makes a lot of sense.”

People today can generally expect to live longer and, in some parts of the world, healthier lives. The substantial increases in life expectancy underlying these global demographic shifts represent a human triumph over disease, hunger, and deprivation, but also pose difficult challenges across multiple sectors. Population aging will have dramatic effects on labor supply, patterns of work and retirement, family and social structures, healthcare services, savings, and, of course, pension systems and other social support programs used by older adults. Individuals, communities, and nations around the world must adapt quickly to the demographic reality facing us and design new approaches to financing the many needs that come with longer lives.

This imperative is the focus of a newly published special issue of The Journal of the Economics of Ageing, entitled Financing Longevity: The Economics of Pensions, Health and Long-term Care. The special issue collects articles originally written for and discussed at a conference that was dedicated to the same topic and held at Stanford in April 2017 to mark the tenth anniversary of APARC’s Asia Health Policy Program (AHPP). The conference convened top experts in health economics and policy to examine empirical and theoretical research on a range of problems pertinent to the economics of aging from the perspective of sustainable financing for long lives. The economics of the demographic transition is one of the research areas that Karen Eggleston, APARC’s deputy director and AHPP director, studies. She co-edited the special issue with Anita Mukherjee, a Stanford graduate now assistant professor in the Department of Risk and Insurance at the Wisconsin School of Business, University of Wisconsin-Madison.

The Financing Longevity conference was organized by The Next World Program, a Consortium composed of partners from Harvard University, Fudan University, Stanford University, and the World Demographic and Aging Forum, and was cosponsored by AHPP, the Stanford Institute for Economic Policy Research, and the Stanford Center on the Demography and Economics of Aging.

The contributions that originated from the conference and are collected in the Journal’s special issue cover comparative research on more than 30 European countries and 17 Latin American countries, as well as studies on Australia, the United States, India, China, and Japan. They analyze a variety of questions pertinent to financing longevity, including how pension structures may exacerbate existing social inequalities; how formal and informal insurance interact in securing long-term care needs; the ways in which the elderly cope with caregiving and cognitive decline; and what new approaches might help extend old-age financial security to those working outside the formal sector, which is a major concern in low-income countries.

Another challenge of utmost importance is the global pension crisis, caused due to committed payments that far exceed the saved resources. It is a problem that Eggleston and Mukherjee highlight in their introduction to the special issue. By 2050, they note, the pension gap facing the world’s eight largest pension systems is expected to reach nearly US $400 trillion. The problem cannot be ignored, as “the financial security of people leading longer lives is in serious jeopardy.” Indeed four of the eight research papers in the special issue shed light on pensions and inequality in income support for older adults. The other four research papers focus on health and its interaction with labor force participation, savings, and long-term care.

The issue also features two special contributions. The first is an interview with Olivia S. Mitchell, a professor at the University of Pennsylvania’s Wharton School and worldwide expert on pensions and ageing. Mitchell explains the areas offering the most promise and excitement in her field; discusses ways to encourage delayed retirement and spur more saving; and suggests several priority areas for future research. The latter include applying behavioral insights to questions about retirement planning, improving financial literacy, and advancing innovations to help people imagine themselves at older ages and save more for their future selves.

The second unique contribution is a perspective on the challenges of financing longevity in Japan, based on the keynote address delivered at the 2017 Stanford conference by Mr. Hirotaka Unami, then senior Director for policy planning and research of the Minister’s secretariat of the Japan Ministry of Finance and currently deputy director general with the Ministry’s Budget Bureau.

In Japan, decades of improving life expectancy and falling birth rates have produced a rapidly aging and now shrinking population. Data released by Japan’s Statistics Bureau ahead of Children's Day on May 5, 2019 reveal that Japan’s child population (those younger than 15) ranks lowest among countries with a total population exceeding 40 million. In his piece, Unami focuses on the difficult tradeoffs Japan faces in responding to the increase in oldest-old population (people aged 75 and over) and the overall population decline. Japan aspires to do so through policies that are designed to restore financial sustainability for the country’s social security system, including the medical care and long-term care insurance systems.

Unami argues that Japan must simultaneously pursue a combination of increased tax revenues, reduced benefit growth, and accelerated economic growth. He notes that these three-pronged efforts require action in five areas: review Japan’s pension policies; reduce the scope of insurance coverage in low-risk areas; increase the effectiveness of health service providers; increase a beneficiary’s burden according to their means; and enhance policies for preventive health care for the elderly.

The aging of our world’s population is a defining issue of our time and there is pressing need for research to inform policies intended to improve the financial well-being of present and future generations. The articles collected in the Financing Longevity special issue and the ongoing work by APARC’s Asia Health Policy Program point to multiple areas ripe for such future research.

View the complete special issue >>

Learn more about Dr. Karen Eggleston’s work in the area of innovation for healthy aging >>

U.S. government aid for treating children and adults with HIV and malaria in developing countries has done more than expand access to lifesaving interventions: It has changed how people around the world view the United States, according to a new study by researchers at the School of Medicine.

Compared with other types of foreign aid, investing in health is uniquely associated with a better opinion of the United States, improving its “soft power” and standing in the world, the study said.  

Favorability ratings of the United States increased in proportion to health aid from 2002 to 2016 and rose sharply after the implementation of the President’s Emergency Plan for AIDS Relief in 2003 and the launch of the President’s Malaria Initiative in 2005, the researchers report.

Their findings were published this week in the American Journal of Public Health. The lead author is postdoctoral scholar Aleksandra Jakubowski, PhD, MPH. The senior author is Eran Bendavid, MD, associate professor of medicine and a core faculty member at Stanford Health Policy.

“Using data on aid and opinions of the United States, we found that investments in health offer a unique opportunity to promote the perceptions of the United States abroad, in addition to disease burden relief,” the authors wrote. “Our study provides new evidence to support the notion that health diplomacy is a net win for the United States and recipient countries alike.”

The Trump administration, however, has proposed a 23% cut in foreign aid in its 2020 budget, including large reductions to programs that fight AIDS and malaria overseas.

The Stanford researchers believe their study is the first to add heft to the argument that U.S. health aid boosts the “soft power” that wins the hearts and minds of foreign friends and foes.

“Our study shows that investing in health aid improves our nation’s standing abroad, which could have important downstream diplomatic benefits to the United States,” Jakubowskisaid. “Investments in health aid help the United States accumulate soft power. Allowing the U.S. reputation to falter would be contrary to our own interests.” 

A Policy Debate

Many politicians and economists consider spending U.S. tax dollars on foreign aid as an ineffective, and possibly harmful, enterprise that goes unappreciated and leads to accusations of American meddling in other countries’ national affairs.

The U.S. government, for the past 15 years, has contributed more foreign health aid than any other country, significantly reducing disease burden, increasing life expectancy and improving employment in recipient countries, the authors wrote. Still, this generosity has historically constituted less than 1% of the U.S. gross domestic product.

“Our results suggest that the dollars invested in health aid offer good value for money,” the researchers wrote. “That is, the relatively low investment in health aid (in terms of GDP) has provided the United States with large returns in the form of improved public perceptions, which may advance the U.S. government’s ability to negotiate international policies that are aligned with American priorities and preferences.”

The researchers used 258 Global Attitudes Surveys, based on interviews with more than 260,000 respondents, conducted by the Pew Research Center in 45 low- to middle-income countries between 2002 and 2016.

Their analysis focused on the health sector, which includes several large programs for infectious disease control, but also support for nutrition, child health and reproductive health programs. They compared health aid to other major areas of U.S. investment: governance, infrastructure, humanitarian aid and military aid. They also constructed a database of news stories that mentioned the President’s Emergency Plan for AIDS Relief or the President’s Malaria Initiative by crawling through the online archives of the top three newspapers by circulation in each of the 45 countries.

They found that the probability of populations holding a very favorable opinion of the United States was 19 percentage points higher in the countries where and years when U.S. donations for health care were highest, compared with countries where and years when health aid donations were lowest. Using another metric, the researchers found that every additional $100 million in health aid was associated with a nearly 6 percentage-point increase in the probability of respondents indicating they had a “very favorable” opinion of the United States. 

In contrast, the researchers found, aid for governance, infrastructure, humanitarian and military purposes was not associated with a better opinion of the United States.

Bendavid, an infectious diseases physician and core faculty member of Stanford Health Policy, said that when he set out to conduct this research, he believed it would result “in a resounding thud” — that the “soft power” of health aid would have no impact on public opinion.

“For me, the notion that this program — hatched and headquartered in D.C. — would have impacts among millions in Nairobi and Dakar, seemed farfetched,” Bendavid said. “I was incredulous until all the pieces were in place.”

The ‘America First’ Agenda

The Trump administration’s “America First” agenda is calling for significant cuts to global health aid, particularly to the highly successful AIDS relief program, which was established by President George W. Bush. The administration’s budget, released in March, proposed a $860 million cut to the program; the President’s Malaria Initiative is facing a $331 million reduction in federal funding. That’s a decline of 18% and 44%, respectively.

The U.S. contribution to the Global Fund to Fight AIDS, Tuberculosis and Malaria would also decline by 17%, or $225 million, according to the Kaiser Family Foundation.

Yet beyond the reputational damage to the United States, such cuts could be a major setback to improving health outcomes in developing countries, the researchers said. After all, HIV knows no borders, and having more resilient health care systems is instrumental when facing public health crises, such as the Ebola outbreak in the Democratic Republic of Congo, Jakubowski said.

“The most direct impact of cutting the United States’ health aid allocations is the potential to undermine or reverse the progress that has been enabled by U.S. aid in curbing mortality and the spread of disease,” Bendavid said. “However, this study suggests there are also repercussions to the United States: the relationships the U.S. has built with recipient nations could also be undermined.”            

Other Stanford co-authors are Steven Asch, MD, MPH, professor of medicine, and former graduate student Don Mai.

Stanford’s Department of Medicine supported the work.