Uncertain Times: Kenneth Arrow and the Changing Economics of Health Care

by Peter J. Hammer (Editor), Deborah Haas-Wilson (Editor), William M. Sage (Editor)

This volume revisits the Nobel Prize-winning economist Kenneth Arrow’s classic 1963 essay “Uncertainty and the Welfare Economics of Medical Care” in light of the many changes in American health care since its publication. Arrow’s groundbreaking piece, reprinted in full here, argued that while medicine was subject to the same models of competition and profit maximization as other industries, concepts of trust and morals also played key roles in understanding medicine as an economic institution and in balancing the asymmetrical relationship between medical providers and their patients. His conclusions about the medical profession’s failures to “insure against uncertainties” helped initiate the reevaluation of insurance as a public and private good. Coming from diverse backgrounds—economics, law, political science, and the health care industry itself—the contributors use Arrow’s article to address a range of present-day health-policy questions. They examine everything from health insurance and technological innovation to the roles of charity, nonprofit institutions, and self-regulation in addressing medical needs. The collection concludes with a new essay by Arrow, in which he reflects on the health care markets of the new millennium. At a time when medical costs continue to rise, the ranks of the uninsured grow, and uncertainty reigns even among those with health insurance, this volume looks back at a seminal work of scholarship to provide critical guidance for the years ahead. Contributors
Linda H. Aiken
Kenneth J. Arrow
Gloria J. Bazzoli
M. Gregg Bloche
Lawrence Casalino
Michael Chernew
Richard A. Cooper
Victor R. Fuchs
Annetine C. Gelijns
Sherry A. Glied
Deborah Haas-Wilson
Mark A. Hall
Peter J. Hammer
Clark C. Havighurst
Peter D. Jacobson
Richard Kronick
Michael L. Millenson
Jack Needleman
Richard R. Nelson
Mark V. Pauly
Mark A. Peterson
Uwe E. Reinhardt
James C. Robinson
William M. Sage
J. B. Silvers
Frank A. Sloan
Joshua Graff Zivin

Genres: Economics

400 pages, Paperback

First published November 17, 2003

Reviews

[Beth Haynes · Rating 4 out of 5]

6/20/2011 This is a very tough read but will be worth the slog through it. Kenneth Arrow's seminal 1963 article "Uncertainty and the Welfare Economics of Medical Care" continues to influence health care policy today. I am finding that i want to argue will many of his fundamental economic assumptions: if markets don't give us what we want, it's proof that they are a failure; if certain hypothetical conditions don't exist, the markets will deliver less than the desired optimal results--yet another failure; if something can and "should" be produced but isn't--failure! And of course, every failure is justification for government intervention. Arrrrgh!!

[Marks54 · Rating 3 out of 5]

This is a collection of scholarly essays commemorating the 40th anniversary of Arrow's seminal American Economic Review paper on health economics. Scholars who have built on this work have contributed chapters on different themes initiated by Arrow. It is for specialists but is accessible to more general readers who wish to better understand health policy debates. The original paper is also reproduced so the reader can consult the original intuition and arguments, This is a fine academic collection.