American Healthcare

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Why It Costs So Much Yet Remains a Beacon of Growth and Development

American Healthcare: Why It Costs So Much Yet Remains a Beacon of Development explores economic growth and the health sector. Is the health sector a curse or a blessing? The American health sector now accounts for at least 18 percent of the economy and will likely increase in coming years. American healthcare spending per capita far exceeds that of other developed countries. Yet our health, as measured by life expectancy and infant mortality, is relatively poor by comparison with the developed world. Other measures of quality including hospital acquired infection are too common. Healthcare costs financially cripple households despite advances associated with the Affordable Care Act. There is widespread dissatisfaction with the American healthcare system and support for more change.

It is also the case that the health sector has been a leader in the evolution of the American economy. The history of economic development is largely attributable to integration of new technology. We tend to applaud new technology and the improvement it brings to our lives. Important new technologies often grow rapidly and faster than the economy as a whole. This leads to larger shares of the economy. There have clearly been enormous advances in pharmaceuticals, medical devices, genomics and molecular biology as well as other subsectors. Yet there is considerable apprehension about costs and economic impact. This book details important health sector institutions and perhaps uniquely, explores linkages between healthcare and broader economic growth. The book addresses asymmetric information between providers and consumers as well as between insurers and beneficiaries. There is a focus on monopoly power in labor markets which contributes to inefficiencies in the system. The author also discusses cost-effectiveness and allocative efficiency as well as emphasizing productivity and its relationship to the wider economy. Policy directions for improved long run efficiency are provided.

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