Skip navigation

Health Economics

  •  
  • Page 1 of 5
The Economics of Well-Being

Can money buy happiness? Is income a reliable measure for life satisfaction? In the West after World War II, happiness seemed inextricably connected to prosperity. Beginning in the 1960s, however, other values began to gain ground: peace, political participation, civil rights, environmentalism. “Happiness economics”—a somewhat incongruous-sounding branch of what has been called “the dismal science”—has taken up the puzzle of what makes people happy, conducting elaborate surveys in which people are asked to quantify their satisfaction with “life in general.” In this book, three economists explore the happiness-prosperity connection, investigating how economists measure life satisfaction and well-being.

The authors examine the evolution of happiness research, considering the famous “Easterlin Paradox,” which found that people’s average life satisfaction didn’t seem to depend on their income. But they question whether happiness research can measure what needs to be measured. They argue that we should not assess people’s well-being on a “happiness scale,” because that necessarily obscures true social progress. Instead, rising income should be understood as increasing opportunities and alleviating scarcity. Economic growth helps societies to sustain freedom and to finance social welfare programs. In this respect, high income may not buy happiness with life in general, but it gives individuals the opportunity to be healthier, better educated, better clothed, and better fed, to live longer, and to live well.

Setting Limits on Healthcare

Most people would agree that the healthcare system in the United States is a mess. Healthcare accounts for a larger percentage of gross domestic product in the United States than in any other industrialized nation, but health outcomes do not reflect this enormous investment. In this book, Philip Rosoff offers a provocative proposal for providing quality healthcare to all Americans and controlling the out-of-control costs that threaten the economy. He argues that rationing—often associated in the public’s mind with such negatives as unplugging ventilators, death panels, and socialized medicine—is not a dirty word. A comprehensive, centralized, and fair system of rationing is the best way to distribute the benefits of modern medicine equitably while achieving significant cost savings.

Rosoff points out that certain forms of rationing already exist when resources are scarce and demand high: the organ transplant system, for example, and the distribution of drugs during a shortage. He argues that if we incorporate certain key features from these systems, healthcare rationing would be fair—and acceptable politically. Rosoff considers such topics as fairness, decisions about which benefits should be subject to rationing, and whether to compensate those who are denied scarce resources. Finally, he offers a detailed discussion of what an effective and equitable healthcare rationing system would look like.

Breakthroughs in medical science, innovations in medical technologies, and improvements in clinical practices occur today at an increasingly rapid rate. Yet because of a fragmented healthcare delivery system, many Americans are unable to benefit from these developments. How can we design a system that can provide high-quality, affordable healthcare for everyone? In this book, William Rouse and Nicoleta Serban introduce concepts, principles, models, and methods for understanding, and improving, healthcare delivery. Approaching the topic from the perspectives of engineering and statistics, they argue that understanding healthcare delivery as a complex adaptive system will help us design a system that is more efficient, effective, and equitable.

The authors use multilevel simulation models as a quantitative tool for evaluating alternate ways of organizing healthcare delivery. They employ this approach, for example, in their discussions of affordability, a prevention and wellness program, chronic disease management, and primary care accessibility for children in the Medicaid program. They also consider possible benefits from a range of technologies, including electronic health records and telemedicine; data mining as an alternative to randomized trials; conceptual and analytical methodologies that address the complexity of the healthcare system; and how these principles, models, and methods can enable transformational change.

Reconciling Air Quality, Climate, and Economic Goals

China’s carbon dioxide emissions now outstrip those of other countries and its domestic air quality is severely degraded, especially in urban areas. Its sheer size and its growing, fossil-fuel-powered economy mean that China’s economic and environmental policy choices will have an outsized effect on the global environmental future. Over the last decade, China has pursued policies that target both fossil fuel use and atmospheric emissions, but these efforts have been substantially overwhelmed by the country’s increasing energy demands. With a billion citizens still living on less than $4,000 per year, China’s energy and environmental policies must be reconciled with the goals of maintaining economic growth and raising living standards.

This book, a U.S.–Chinese collaboration of experts from Harvard and Tsinghua University, offers a groundbreaking integrated analysis of China’s economy, emissions, air quality, public health, and agriculture. It first offers essential scientific context and accessible summaries of the book’s policy findings; it then provides the underlying scientific and economic research. These studies suggest that China’s recent sulfur controls achieved enormous environmental health benefits at unexpectedly low costs. They also indicate that judicious implementation of carbon taxes could reduce not only China’s carbon emissions but also its air pollution more comprehensively than current single-pollutant policies, all at little cost to economic growth.

Envisioning Health Care 2020

Contrary to popular opinion, one of the main problems in providing uniformly excellent health care is not lack of money but lack of knowledge—on the part of both doctors and patients. The studies in this book show that many doctors and most patients do not understand the available medical evidence. Both patients and doctors are “risk illiterate”—frequently unable to tell the difference between actual risk and relative risk. Further, unwarranted disparity in treatment decisions is the rule rather than the exception in the United States and Europe. All of this contributes to much wasted spending in health care.

The contributors to Better Doctors, Better Patients, Better Decisions investigate the roots of the problem, from the emphasis in medical research on technology and blockbuster drugs to the lack of education for both doctors and patients. They call for a new, more enlightened health care, with better medical education, journals that report study outcomes completely and transparently, and patients in control of their personal medical records, not afraid of statistics but able to use them to make informed decisions about their treatments.

Health Economics combines economic concepts with empirical evidence to enhance students’ economic understanding of how health care institutions and markets function. It views the subject in both microeconomic and macroeconomic terms, moving from the individual and firm level to the market level to a macroeconomic view of the role of health and health care within the economy as a whole.

This student solutions manual for Health Economics provides answers to the odd-numbered exercises.

This book introduces students to the growing research field of health economics. Rather than offer details about health systems around the world without providing a theoretical context, Health Economics combines economic concepts with empirical evidence to enhance readers’ economic understanding of how health care institutions and markets function. It views the subject in both microeconomic and macroeconomic terms, moving from the individual and firm level to the market level to a macroeconomic view of the role of health and health care within the economy as a whole.

The book includes discussion of recent empirical evidence on the U.S. health system and can be used for an undergraduate course on U.S. health economics. It also contains sufficient material for an undergraduate or masters course on global health economics, or for a course on health economics aimed at health professionals. It includes a chapter on nurses as well as a chapter on the economics of hospitals and pharmaceuticals, which can be used in master’s courses for students in these fields. It supplements its analysis with readings (both classic and current), extensive references, links to Web sites on policy developments and public programs, review and discussion questions, and exercises. Downloadable supplementary material for instructors, including solutions to the exercise sets, sample syllabuses, and more than 600 slides that can be used for class presentations, is available at http://mitpress.mit.edu/health_economics. A student solutions manual with answers to the odd-numbered exercises is also available.

Downloadable instructor resources available for this title: instuctor's manual, slides, and file of figures in the book

One of the most daunting challenges facing the new U.S. administration is health care reform. The size of the system, the number of stakeholders, and ever-rising costs make the problem seem almost intractable. But in Chaos and Organization in Health Care, two leading physicians offer an optimistic prognosis. In their frontline work as providers, Thomas Lee and James Mongan see the inefficiency, the missed opportunities, and the occasional harm that can result from the current system. The root cause of these problems, they argue, is chaos in the delivery of care. If the problem is chaos, the solution is organization, and in this timely and outspoken book, they offer a plan.

In many ways, this chaos is caused by something good: the dramatic progress in medical science--the explosion of medical knowledge and the exponential increase in treatment options. Imposed on a fragmented system of small practices and individual patients with multiple providers, progress results in chaos. Lee and Mongan argue that attacking this chaos is even more important than whether health care is managed by government or controlled by market forces. Some providers are already tightly organized, adapting management principles from business and offering care that is by many measures safer, better, and less costly.

Lee and Mongan propose multiple strategies that can be adopted nationwide, including electronic medical records and information systems for sharing knowledge; team-based care, with doctors and other providers working together; and disease management programs to coordinate care for the sickest patients.

Why Single Payer Won't Work

In the battle over health care reform we can try to fashion new policies based on old ideas--or we can acknowledge today’s demographic and economic realities. In Health Care Turning Point, health policy expert Roger Battistella argues that the conventional wisdom that dominates health policy debates is out of date. Battistella takes on popular misconceptions about the advantages of single-payer plans, the role of the market, and other health policy issues and outlines a pragmatic new approach.

Few would disagree that the current system is broken. But, Battistella asserts provocatively, a government takeover of health insurance patterned after Medicare and Medicaid won’t work either. Battistella argues that contrary to popular belief, single-payer coverage will not lower health spending but would encourage overconsumption and drive costs up. If consumers were responsible for buying their own health insurance (as they are for buying their own car and home insurance), he argues, they’d look for value and demand greater price and quality transparency from providers.

The economic shibboleth that the principles of market competition don’t apply to health care is nonsense, Battistella says. We won’t achieve real health care reform until policy makers adjust to this reality and adopt a more pragmatic view.

Implications for Global Health

Disease eradication represents the ultimate in global equity and the definitive outcome of good public health practice. Thirty years ago, the elimination of smallpox defined disease eradication as a monumental global achievement with lasting benefits for society. Today, the global commitment to eradicate polio and guinea worm and heightened interest in the potential eradication of other infectious diseases, including measles/rubella, lymphatic filariasis, onchocerciasis, and malaria, dominate public health concerns. But what does it take to eradicate a disease? This book takes a fresh look at the evolving concepts of disease eradication, influenced by scientific advances, field experience, societal issues, and economic realities. A diverse group of experts from around the world, representing a range of disciplines, examines the biological, social, political, and economic complexities of eradicating a disease.
The book details lessons learned from the initiatives against polio, measles/rubella, and onchocerciasis. Further chapters examine ethical issues, the investment case, governance models, organizational and institutional arrangements, political and social factors, feasibility of eradication goals, priority setting, and the integration of disease eradication programs with existing health systems.

  •  
  • Page 1 of 5