The Economic Evolution of American Health Care: From Marcus Welby to Managed Care

(Paperback)

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The American health care industry has undergone such dizzying transformation since the 1960s, that many patients have lost confidence in a system they find too impersonal and ineffectual. Is their distrust justified and can confidence be restored The author, a leading health care economist, tackles these and other key questions in the first major economic and historical investigation of the field. Focusing on the doctor-patient relationship, he begins with the era of the independently practising physician - epitomised by Marcus Welby, the beloved father figure/doctor in the 1960s television show of the same name - who disappeared with the growth of managed care. The author guides consumers in understanding the rapid developments of the health care industry and offers timely policy recommendations for reforming managed care as well as advice for patients making health care decisions. The book covers everything from start-up troubles with the first managed care organisations to attempts at government regulation to the mergers and quality control issues facing MCOs today. It also reflects on how difficult it is for patients to shop for medical care. Up until the 1970s, patients looked to autonomous physicians for recommendations on procedures and hospitals - a process that relied more on the patient's trust of the physician than on facts, and resulted in skyrocketing medical costs. Newly emerging MCOs have tried to solve the shopping problem by tracking the performance of care providers while obtaining discounts for their clients. Many observers accuse MCOs of caring more about cost than quality, and argue for government regulation. The author , however, believes that market forces can eventually achieve quality care and cost control. But first, MCOs must improve their ways of measuring provider performance, medical records must be made more complete and accessible (a task that need not compromise patient confidentiality), and patients must be willing to seek and act on information about the best care available. The author argues that patients can regain confidence in the medical system, and even come to trust MCOs, but they will need to rely on both their individual doctors and their own consumer awareness.

Reviews

"[Dranove] offers important insight into a complicated and critically important sector of our society."--Booklist "[Dranove] raises interesting points on the benefits of managed care but does not hesitate to point out where MCOs can go wrong. While the book emphasizes the business aspect of healthcare, an economics degree is not necessary to understand the principles that are illustrated."--Library Journal "When you ask people why they don't like managed care, they usually don't give clear answers ... But most people haven't had particularly bad experiences themselves ... So it's been hard for most of us to know just how managed health care really does stack up ... It's no longer so hard, thanks to The Economic Evolution of American Health Care, by David Dranove... A wealth of information..."--David R. Henderson, The Wall Street Journal "Although everyone will not agree with the author's theories and conclusions, he offers important insight into a complicated and critically important sector of our society."--Booklist "Many governments are actively considering market-based solutions to health care inflation. My message to them is simple: before you try to emulate much of what we have done, read David Dranove."--Jerome P. Kassirer, Canadian Medical Association Journal "David Dranove acknowledges many of the problems of contemporary managed care but argues that, properly structured, it would be a very good idea."--Lawrence P. Casalino, New England Journal of Medicine "An excellent book that makes accessible a great deal of interesting and relevant research... It reviews a remarkable list of important policy issues in a very short space and provides sharp economic insight into each of them. Even more, it is written in clear, non-technical language... I recommend it highly."--Alain C. Enthoven, Healthplan "The Economic Evolution of American Health Care delivers a great deal of new and valuable information in a crisp, very readable style. It is an excellent primer on the state of the US health care industry and on the economics of competition in health care."--Sherry Glied, Health Economics

Author Bio

David Dranove is the Walter McNerney Distinguished Professor of Health Industry Management and Professor of Management and Strategy at Northwestern University's Kellogg Graduate School of Management. He recently authored "How Hospitals Survived", with William D. White, and is coauthor of "The Economics of Strategy", a popular business strategy textbook.Correction: On pages 114 and 172, the book incorrectly states that Oxford Health Plan went bankrupt due to poor accounting. In fact, Oxford suffered from problematic revenue collection. It staved off bankruptcy and returned to profitability.