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Priced Out: The Economic and Ethical Costs of American Health Care
From a giant of health care policy, an engaging and enlightening account of why American health care is so expensive―and why it doesn't have to be
Uwe Reinhardt was a towering figure and moral conscience of health care policy in the United States and beyond. Famously bipartisan, he advised presidents and Congress on health reform and originated central features of the Affordable Care Act. In Priced Out , Reinhardt offers an engaging and enlightening account of the U.S. health care system, explaining why it costs so much more and delivers so much less than the systems of every other advanced country, why this situation is morally indefensible, and how we might improve it. Drawing on the best evidence, he guides readers through the chaotic, secretive, and inefficient way America pays for health care, dispelling the confusion, ignorance, myths, and misinformation that hinder effective reform.
Uwe Reinhardt was a towering figure and moral conscience of health care policy in the United States and beyond. Famously bipartisan, he advised presidents and Congress on health reform and originated central features of the Affordable Care Act. In Priced Out , Reinhardt offers an engaging and enlightening account of the U.S. health care system, explaining why it costs so much more and delivers so much less than the systems of every other advanced country, why this situation is morally indefensible, and how we might improve it. Drawing on the best evidence, he guides readers through the chaotic, secretive, and inefficient way America pays for health care, dispelling the confusion, ignorance, myths, and misinformation that hinder effective reform.
232 pages, Paperback
First published May 14, 2019
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May 23, 2020
Mantras about the virtues of markets are no substitute for serious ethical convictions.
There are a great many things for Americans to feel embarrassed about. Depending on your politics, you may bemoan the rise of identity politics and the snowflake culture predominating on college campuses; or perhaps you rage against racist policing or our lax gun laws. But I think that, as Americans, we can all come together and feel a deep and lasting shame over our health care system—specifically, how we finance it. According to Reinhardt, our system is so bad that it is routinely invoked in international conferences as a kind of boogey man, an example of what to avoid. And after reading this book, it is easy to see why.
I did not suspect that our system was quite so bad until I left the country. But, in retrospect, the evidence was quite apparent. Virtually all of my friends have expressed anxiety about their health care at some point—high premiums, high deductibles, or simply no health insurance at all. I have seen family members spend weeks negotiating with insurance companies for payment of their medicines (and even after the insurance chips in, the cost is still breathtaking). Meanwhile, in my five years here, I have yet to hear a single Spaniard express anxiety over how they will pay for a medicine or a medical procedure. Here, as in most of Europe, this type of anxiety is quite uncommon.
The U.S. system fails on many different fronts. Most simply, there is coverage. Millions of Americans have no coverage, and millions more have inadequate coverage (such as many of my friends, whose deductibles are so high that they may as well not have insurance). Second is cost. Both medical procedures and medicines are significantly more expensive in the United States. For example, the drug Xarelto (for blood clots) costs $101 in Spain, $292 in the U.S. The average cost of an appendectomy is $2,003 in Spain, $15,930 in America. A third failure— closely related to cost—is waste. Our byzantine payment system requires doctors and hospitals to spend great amounts of time and money communicating with insurance companies, which of course costs money, which of course gets transferred to the consumer.
But most fundamental failure is a failure of ethics. Or perhaps it is better to say a lack of ethical vision. As Reinhardt explains, while much of the debate on health care in America concerns itself with technicalities—risk pools, risk exposure, whether premiums should be actuarially fair or community-rated, etc.—this debate conceals the fact that we have yet to come to a consensus on the moral foundations of health care. Most of the world’s developed nations have established their systems on the presumption that health care is a social good. In the United States, on the other hand, we are sort of muddled, at times treating health care as if it is a commodity, and yet unwilling to face up to the implications of that choice—such as letting poor people die without treatment.
Aside from the ethical issues involved, health care has many features that make it unlike a typical commodity, and thus poorly governed by supply-and-demand. If I want to buy a car, for example, typically I am not in a great rush to do so. I can shop around, test-drive cars, compare prices across companies and locations, and read reviews. I can even decide that I do not want to buy a car after all, and instead buy a train pass. All of this contributes to control the price of cars, and incentivizes car companies to give us the best value for our money.
None of this is the case in our health care system. The demand is non-negotiable and, very often, time-sensitive. Furthermore, most patients lack the knowledge needed to evaluate what procedures or tests are justified or not, so oftentimes we cannot even be fully aware of our own ‘demand.’ Besides that, we have no ability to compare prices or to compare treatment efficacy. And even if we are careful to go to a hospital in our insurance network, there may be doctors ‘out of network’ working there, leading to the ugly phenomenon of surprise medical bills.
Added together, it is as if the car salesman blindfolded me, put a gun to my head, told me I had to choose a car in five minutes, while he was the only source of information about what car I needed (and medical bills can be quite as expensive as cars!). This is the position of the American “consumer” of healthcare.
My own brief experience with emergency medical care highlights the situation. The only time that I have ever been taken to an emergency room, I was unconscious. I woke up after being transported by the ambulance. Luckily, I was quickly discharged, and I also had insurance. But even though my insurance covered the hospital bill, it did not cover the ambulance, which I had to pay out of pocket. Again, I was lucky, since I was able to afford it. Many cannot, however, and have the experience of waking up from an accident, an injury, or an operation in debt. How can you be an intelligent consumer when you are unconscious? (Consider that 40% of Americans cannot afford a one-time $400 emergency payment; and my ambulance cost over twice that much.)
The helplessness of the consumer creates a perverse incentive in our system. There is little downward pressure on prices. Instead, what results is a kind of arms race between health care providers and insurers. Insurers are incentivized to put up as many barriers as possible to paying out, which requires doctors and hospitals to invest ever-more resources into their billing departments, which of course only increases the cost to the patient. In many hospitals, there are more billing clerks than hospital beds; and when you realize that these billing clerks have their own counterparts in the insurance companies, you can get some idea of the enormous bloat created by our financing system.
I think there is a particular irony to this situation, since our American insistence on market values has created a labyrinthine network of incomprehensible rules, endless paperwork, and legions of bureaucrats—the very thing that capitalist principles were supposed to eliminate. Indeed, ironies abound in our system. For example, we endlessly discuss the affordability of government programs, while the tax incentives for employment-based insurance (which costs the federal and state governments an annual $300 billion in foregone revenues) is never mentioned. What is more, while the insurance mandates of Obamacare were roundly criticized as forcing the healthy to subsidize the unhealthy, as Reinhardt points out, the exact same thing occurs in insurance-based healthcare. And as a final irony:
It is fair to ask why, if socialized medicine is so bad, Americans for almost a century now have preserved precisely that construct for their military Veterans, and, indeed, why the latter are so defensive and protective of that socialized medicine system.
After reading this review, you may be excused for thinking that this book is a fiery manifesto about the evils of the system. Far from it. Uwe Reinhardt was a prominent economist and much of this book consists of tables and graphs. The writing is, if anything, on the dry side, and the tone is one of intellectual criticism rather than passionate outrage. Yet, strangely, this is why I found the book so effective. It is one thing for an arm-swinging socialist to condemn the evils of the system, but quite another for a calm economist to go through the data, point by point, and explain how it all works and how it compares with other countries’ performance.
You may also be excused for thinking that, given all this, Reinhardt would be an advocate for a single-payer system in the United States. After all, he was one of the architects of Taiwan’s single-payer system, which costs about 6% of the country’s GDP. (For comparison, America’s system costs us 17% of GDP!) But Reinhardt thinks that such a system would not work on American soil. For one, the libertarian streak in our culture runs too deep for such a system to be broadly acceptable. More importantly, however, Reinhardt thinks that our campaign finance system is so corrupt that the health care lobby would be able to exert a heavy influence on the government, thus canceling the benefit.
He instead advocates for an ‘all-payer’ system. The idea is to consolidate the market power of consumers by having standard prices set either by the government, or by associations of care providers and insurers. This would, at the very least, avoid the wild price variability that can be found in even a single city in the United States. It also helps to bring costs down, as demonstrated in Maryland, which has had an all-payer system for quite a while. Japan’s system is also established on this principle, and spends far less money per capita on its health care system, despite having a significantly older population than the United States.
In normal times, I was not exactly optimistic about the prospect of reforming out broken health care system. But in the wake of this pandemic, it does seem as if major reforms might not only be possible, but inevitable. Employment-based insurance makes little sense if people lose their jobs during a major health crisis, as has already happened to many millions of Americans. And high unemployment may persist for some time. What is more, a major health crisis, resulting in many thousands of additional hospital stays, will put pressure on private insurance firms and lead to a significant rise in insurance premiums. Basically, higher-risk patients create higher cost, and a pandemic puts far more people into the high-risk category. The greater strain on an already teetering system may be the proverbial straw on the camel’s back. We shall see.
July 22, 2019
Priced Out was never finished by its author. The book was completed by Uwe Reinhardt’s wife Tsung Mai-Cheng (a habitual co-author of Reinhardt’s and celebrated healthcare economist in her own right) and published posthumously.
It is burdened, in my view, by having three forewords instead of one: two fawning / mourning introductions by Paul Krugman and William Frist, which merely serve to put off any Republicans from reading the book (yes, I know Bill Frist was a Republican), and one by the author himself, who explains that there are exactly two problems with healthcare in the US:
1. An honest debate has never taken place on what we want from it: should the fortunate (i.e. rich and healthy) members of the public pay for the health of the unfortunate (i.e. poor and unhealthy)? Yes or no?
Because this debate has never openly taken place, we have stumbled upon a system that fails on both possible aims: (i) it’s far more wasteful than it would be if we did not care to provide for the less fortunate (ii) it’s far more inequitable than it would be if we did.
2. US healthcare is unnecessarily feeding far too many mouths, a fact that makes it expensive.
Having established these facts in the introduction, Reinhardt goes on to make a number of important points:
1. US healthcare is expensive beyond what you would expect given explanatory factors such as ability to pay (the “superior good” explanation) and demographic structure. Yes, rich countries with rich country demographics should spend more on healthcare than poor countries with a young population. But you run the regressions and the US is almost as much of an outlier after you’ve corrected for all that.
2. More relevantly, US healthcare is expensive compared to other nations if you allow for its effectiveness (outcomes, p.75), or adjust for obesity, diabetes etc. Americans get poor value, bottom line. They do so even after you adjust for the standard of care they receive (which is no great shakes) and they do so even after you account for the fact that “everyone’s fat” / “everyone smokes” / “everyone drinks” etc.
3. Only 17% of the cost of drugs is accounted for by the cost of production. Only 58% goes to pharmaceutical companies, even. The rest goes to a phalanx of intermediaries siphoning money to themselves: insurers, Pharmaceutical Benefit Managers, pharmacies and wholesalers!!!
4. US healthcare costs have been spiraling up at a rate that puts inflation to shame, any way you care to measure it.
5. Costs of procedures are (i) high relative to any country you care to mention (ii) amazingly varied from hospital to hospital (iii) amazingly varied within each hospital, depending on who’s getting treated (iv) opaque / hidden: you never know what you’ll pay (which makes the principle of co-paying cruel, Reinhardt adds, by-the-by.)
6. The government pays directly for half all healthcare and foregoes tax on part of the rest. Medicaid, Medicare and Public Health spending is half the spending. Private Insurance is only 34.3% and out-of-pocket is 11%.
7. US healthcare pays for an army of administrators. Each one of those layers of administrators, whose main function is to fight somebody’s corner in the 34.3% of the market that is paid for by private insurance, has a job that at some point in history made sense. Collectively, however, this is a leviathan that (directly, or via the public purse) sucks money out of everyone’s pocket, all while creating a vast lobby for the status quo, because all these people have jobs to protect.
Next, the author takes you both through Obamacare and through the House proposal and the Senate proposal for replacing Obamacare.
His analysis on Obamacare is not what you’d think. He basically deems it to be “a bad patch on a bad system” rather than the panacea we’ve been told it is. He concedes, on the other hand, that for those not lucky enough to get their employer to pay for their health insurance it is a massive improvement on what went before.
The main problem of Obamacare is that inevitably a line must be drawn above which you are not covered. The people right above that line ended up as the main losers: they’re paying more than they did before.
The reason is what Reinhardt calls the “death spiral” of health insurance, which comes in two parts: part one of the death spiral is that the top 10% of the insured suck up two thirds of all resources, meaning that most people lose from buying insurance and a select few benefit a whole lot. This situation gives rise to two ways to charge a patient: based on either his medical circumstances (“medically underwritten”) or on the fact that he has a pulse (“community rated”). Obamacare forces insurers to take everybody based on their community rating, pays for the poor and forces everybody else to pay for the insurance themselves (or pay a fine if they opt out).
Part two of the death spiral comes if not everyone is forced to buy healthcare, because then they only will if they need it. This means up to 90% of potential contributors can take their chances, leaving the 10% in the pool. So the costs to the insurers go up. This drives costs up, making the decision even more clear-cut for the potentially healthy, which in turn…. you get the idea, it’s called a spiral for a reason!
Now in theory Obamacare does not face a death spiral, because it forces everybody in. But life is not that simple! It turns out that the people who first ever bought healthcare under Obamacare were sicker than everybody else who was buying health insurance before. No massive surprise with the benefit of hindsight, but the result is that health insurers now need to charge more. And if you’re above the threshold for government handouts, you’re worse off, period.
There are other losers, those who would prefer to take their chances but are forced to either buy insurance they don’t believe they need or pay a fine. Reinhardt has absolutely no pity for them, however! The last chapter of the book penned by him is a tongue-in-cheek proposal whereby at age 26 every American has to say if he wants to be part of a national insurance plan. And if not, he can never enroll and take his chances. He gets to become, in the author’s words, an Uninsured Rugged American Individualist…
The analysis of the Republican plans should have been carved out of the book in my view, as they never came to pass.
The book closes with Tsung Mai-Cheng’s efforts to provide relevant quotations from her husband on a range of issues he never got to.
Obviously, he never wrote those bits, so we are relying here on Uwe Reinhardt’s wife to pick quotations that are in line with his beliefs, but they make for VERY uncomfortable reading.
Single-payer healthcare in the US he actually views as an invitation for a free-for-all, due to “capture” of the US government by private interests:
“I have not advocated the single payer model here because our government is too corrupt. Medicare is a large insurance company whose board of directors (Ways and Means and Senate Finance) accepts payments from vendors to the company. In the private market, that would get you into trouble. When you go to Taiwan or Canada, the kind of lobbying we have here is illegal there. You can’t pay money to influence the party the same way. Therefore the bureaucrats who run these systems are pretty much insulated from those pressures. Here you have basically a board of directors in the House Ways and Means Committee that gets money from lobbyists both at the regulatory writing stage and during normal operations. And they can call an administrator and demand they stop something from happening.”
Perhaps even more unsettling is that Reinhardt finds US healthcare to be one of the better features of the American landscape. To wit:
“I am actually quite optimistic about health care. First of all, it never was that bad a sector. People always say it’s the most inefficient sector in the world. That’s bullshine. If you compare heath care to education, health care towers over education in terms of concern about quality, concern about effectiveness et cetera. Compare it to jurisprudence. Have judges ever worried about how much time of the jury they pulverize? So I think the health care system actually is a lot better than people claim it to be. We keep beating up on doctors and nurses and they work very hard. But actually where we should start -there was an Institute of Medicine study out that said we spend $190 billion more per year on administration than we should. It seems to me that should be attacked before I hound more doctors and nurses… For some reason we talk about evidence-based clinical practice, but not ever about evidence-based administration… Say, how could you run an insurance system more cheaply than we do? How much should we save? Whatever we are spending, cut it in half.”
Overall, this book was a massive eye-opener for me, both because of the rational analysis offered and because it was short and had charts and tables and graphs. But the central message is the following:
The first thing we must do before assessing US healthcare is to have an honest debate on the issue Uwe Reinhardt opens with:
“To what extent should the better-off members of society be made to be their poorer and sicker brothers’ and sisters’ keepers in health care?”
Reinhardt strongly believed that it is our duty to be our sicker brothers’ and sisters’ keepers. But he was also a practical man.
I recommend you read “Priced Out” together with my friend Jonathan Cohn’s “Sick.”
It is burdened, in my view, by having three forewords instead of one: two fawning / mourning introductions by Paul Krugman and William Frist, which merely serve to put off any Republicans from reading the book (yes, I know Bill Frist was a Republican), and one by the author himself, who explains that there are exactly two problems with healthcare in the US:
1. An honest debate has never taken place on what we want from it: should the fortunate (i.e. rich and healthy) members of the public pay for the health of the unfortunate (i.e. poor and unhealthy)? Yes or no?
Because this debate has never openly taken place, we have stumbled upon a system that fails on both possible aims: (i) it’s far more wasteful than it would be if we did not care to provide for the less fortunate (ii) it’s far more inequitable than it would be if we did.
2. US healthcare is unnecessarily feeding far too many mouths, a fact that makes it expensive.
Having established these facts in the introduction, Reinhardt goes on to make a number of important points:
1. US healthcare is expensive beyond what you would expect given explanatory factors such as ability to pay (the “superior good” explanation) and demographic structure. Yes, rich countries with rich country demographics should spend more on healthcare than poor countries with a young population. But you run the regressions and the US is almost as much of an outlier after you’ve corrected for all that.
2. More relevantly, US healthcare is expensive compared to other nations if you allow for its effectiveness (outcomes, p.75), or adjust for obesity, diabetes etc. Americans get poor value, bottom line. They do so even after you adjust for the standard of care they receive (which is no great shakes) and they do so even after you account for the fact that “everyone’s fat” / “everyone smokes” / “everyone drinks” etc.
3. Only 17% of the cost of drugs is accounted for by the cost of production. Only 58% goes to pharmaceutical companies, even. The rest goes to a phalanx of intermediaries siphoning money to themselves: insurers, Pharmaceutical Benefit Managers, pharmacies and wholesalers!!!
4. US healthcare costs have been spiraling up at a rate that puts inflation to shame, any way you care to measure it.
5. Costs of procedures are (i) high relative to any country you care to mention (ii) amazingly varied from hospital to hospital (iii) amazingly varied within each hospital, depending on who’s getting treated (iv) opaque / hidden: you never know what you’ll pay (which makes the principle of co-paying cruel, Reinhardt adds, by-the-by.)
6. The government pays directly for half all healthcare and foregoes tax on part of the rest. Medicaid, Medicare and Public Health spending is half the spending. Private Insurance is only 34.3% and out-of-pocket is 11%.
7. US healthcare pays for an army of administrators. Each one of those layers of administrators, whose main function is to fight somebody’s corner in the 34.3% of the market that is paid for by private insurance, has a job that at some point in history made sense. Collectively, however, this is a leviathan that (directly, or via the public purse) sucks money out of everyone’s pocket, all while creating a vast lobby for the status quo, because all these people have jobs to protect.
Next, the author takes you both through Obamacare and through the House proposal and the Senate proposal for replacing Obamacare.
His analysis on Obamacare is not what you’d think. He basically deems it to be “a bad patch on a bad system” rather than the panacea we’ve been told it is. He concedes, on the other hand, that for those not lucky enough to get their employer to pay for their health insurance it is a massive improvement on what went before.
The main problem of Obamacare is that inevitably a line must be drawn above which you are not covered. The people right above that line ended up as the main losers: they’re paying more than they did before.
The reason is what Reinhardt calls the “death spiral” of health insurance, which comes in two parts: part one of the death spiral is that the top 10% of the insured suck up two thirds of all resources, meaning that most people lose from buying insurance and a select few benefit a whole lot. This situation gives rise to two ways to charge a patient: based on either his medical circumstances (“medically underwritten”) or on the fact that he has a pulse (“community rated”). Obamacare forces insurers to take everybody based on their community rating, pays for the poor and forces everybody else to pay for the insurance themselves (or pay a fine if they opt out).
Part two of the death spiral comes if not everyone is forced to buy healthcare, because then they only will if they need it. This means up to 90% of potential contributors can take their chances, leaving the 10% in the pool. So the costs to the insurers go up. This drives costs up, making the decision even more clear-cut for the potentially healthy, which in turn…. you get the idea, it’s called a spiral for a reason!
Now in theory Obamacare does not face a death spiral, because it forces everybody in. But life is not that simple! It turns out that the people who first ever bought healthcare under Obamacare were sicker than everybody else who was buying health insurance before. No massive surprise with the benefit of hindsight, but the result is that health insurers now need to charge more. And if you’re above the threshold for government handouts, you’re worse off, period.
There are other losers, those who would prefer to take their chances but are forced to either buy insurance they don’t believe they need or pay a fine. Reinhardt has absolutely no pity for them, however! The last chapter of the book penned by him is a tongue-in-cheek proposal whereby at age 26 every American has to say if he wants to be part of a national insurance plan. And if not, he can never enroll and take his chances. He gets to become, in the author’s words, an Uninsured Rugged American Individualist…
The analysis of the Republican plans should have been carved out of the book in my view, as they never came to pass.
The book closes with Tsung Mai-Cheng’s efforts to provide relevant quotations from her husband on a range of issues he never got to.
Obviously, he never wrote those bits, so we are relying here on Uwe Reinhardt’s wife to pick quotations that are in line with his beliefs, but they make for VERY uncomfortable reading.
Single-payer healthcare in the US he actually views as an invitation for a free-for-all, due to “capture” of the US government by private interests:
“I have not advocated the single payer model here because our government is too corrupt. Medicare is a large insurance company whose board of directors (Ways and Means and Senate Finance) accepts payments from vendors to the company. In the private market, that would get you into trouble. When you go to Taiwan or Canada, the kind of lobbying we have here is illegal there. You can’t pay money to influence the party the same way. Therefore the bureaucrats who run these systems are pretty much insulated from those pressures. Here you have basically a board of directors in the House Ways and Means Committee that gets money from lobbyists both at the regulatory writing stage and during normal operations. And they can call an administrator and demand they stop something from happening.”
Perhaps even more unsettling is that Reinhardt finds US healthcare to be one of the better features of the American landscape. To wit:
“I am actually quite optimistic about health care. First of all, it never was that bad a sector. People always say it’s the most inefficient sector in the world. That’s bullshine. If you compare heath care to education, health care towers over education in terms of concern about quality, concern about effectiveness et cetera. Compare it to jurisprudence. Have judges ever worried about how much time of the jury they pulverize? So I think the health care system actually is a lot better than people claim it to be. We keep beating up on doctors and nurses and they work very hard. But actually where we should start -there was an Institute of Medicine study out that said we spend $190 billion more per year on administration than we should. It seems to me that should be attacked before I hound more doctors and nurses… For some reason we talk about evidence-based clinical practice, but not ever about evidence-based administration… Say, how could you run an insurance system more cheaply than we do? How much should we save? Whatever we are spending, cut it in half.”
Overall, this book was a massive eye-opener for me, both because of the rational analysis offered and because it was short and had charts and tables and graphs. But the central message is the following:
The first thing we must do before assessing US healthcare is to have an honest debate on the issue Uwe Reinhardt opens with:
“To what extent should the better-off members of society be made to be their poorer and sicker brothers’ and sisters’ keepers in health care?”
Reinhardt strongly believed that it is our duty to be our sicker brothers’ and sisters’ keepers. But he was also a practical man.
I recommend you read “Priced Out” together with my friend Jonathan Cohn’s “Sick.”
July 4, 2020
Healthcare financing is a moral issue. The author, a prominent economist in the healthcare arena, passed away before the book was published. The book, at times a bit wonky, exposes the insanity of our system of financing health care. The wonky does not obscure the common sense explanations and this book's ideas should be widely discussed in the media and by the politicians discussing this arena. Bernie Sanders and Elizabeth Warren have tried to explain it but truth gets washed out by the politics of the aristocracy. I do not understand how the popular media is so controlled by this aristocracy.
The book explains in logical, rational terms how dysfunctional we are and offers logical and rational ideas for bringing healthcare into a morally defensible status, which clearly is not now happening.
The book explains in logical, rational terms how dysfunctional we are and offers logical and rational ideas for bringing healthcare into a morally defensible status, which clearly is not now happening.
May 24, 2020
An informative and important read to understand the American healthcare wonderland (wonder as in I often found myself in disbelief). The effects of the cripplingly inefficient and ethically disgraceful system are only more evident during this pandemic.
“This Book is a primer for readers who are interested in our confusing debate on health reform and our health system in general. The book seeks to shed light on important and often bizarre and curious facts and realities about many facets of our mysterious and expensive health care system. For international readers, I hope the book will offer takeaway lessons form the American experience, especially with regard to what not to do in the health care and health reform in their respective countries.”
Uwe Reinhardt is really funny.
“This Book is a primer for readers who are interested in our confusing debate on health reform and our health system in general. The book seeks to shed light on important and often bizarre and curious facts and realities about many facets of our mysterious and expensive health care system. For international readers, I hope the book will offer takeaway lessons form the American experience, especially with regard to what not to do in the health care and health reform in their respective countries.”
Uwe Reinhardt is really funny.
Read
October 21, 2025Read this one twice (via my ears) before returning because it is pretty short and also because I am not an economist. Really useful read for contextualizing the opaque US healthcare system among healthcare systems of other countries (tl;dr: get me out of here!!!!!)
July 19, 2019
This book presents a detailed overhead of the current state of the US health policy debate up through the end of 2017 and the beginning of 2019. The author was a very distinguished Princeton health economist who passed in 2018. It is clear that this volume is a summary statement of the life and work of Professor Reinhardt, supplemented by some thoughtful interpretive reviews of topics in the book and the arc of Professor Reinhardt’s long and illustrious career.
Health Economics and healthcare policy are strange domains. Healthcare is a huge portion of the economy, closing in on 20% of the US GDP.It consumes huge amounts of resources, affects millions of workers, and readily fits into settings where economic analysis has much to offer in explaining complex situations. For example, the title of the book refers to an analysis that Reinhardt makes that Americans do not really consume more or better healthcare than those in other developed nations despite their much higher expenditures. They just pay a lot more for it due to much higher prices. Readers not familiar with pricing issues will benefit from considering this and even going back to the source articles.
Having said that, healthcare is also an area that is so incredibly complex and rapidly changing the traditional notions of shopping and marketplace behaviors seem out of place. Quality of goods and services is difficult to determine and strategize about. Under such conditions, health care may not appear to be a shining example of market economics. It is hard to blithely talk about markets doing this or that in healthcare and strange constructions such as “third party payers” and “managed care” become commonplace. But in conjunction with political dynamics, a careful analysis will be worth the effort.
Reinhardt’s book provide a perspective based on such a careful analysis. He is clear, reasoned, and insightful. The book sums up much of his prior work but if you have not read his articles, this is a good place to start. In terms of information, the book provides a clear and up to date summary of where the health care debate in America was in 2017 and prior to the 2018 elections. That alone makes the book well worth reading.
...but the value of the book is much more than an update. Reinhardt provides a strong ethical perspective on health care debates. To him, virtually all health policy debates in the US involve the grand question of whether health care should be rationed by income or should be provided to all irrespective of income class. He notes how there are defensible arguments for each position but that in the US, politicians have not openly engaged the ethical basis of health care debates but instead have posed issues more in terms of complex technical issues. Reinhardt also provides international comparisons on this showing how other developed nations have addressed the social and ethical questions of health care head on in developing their policies. The US is an outlier for not doing so. Reinhardt leaves no doubt regarding where he stands on the need for all to have access to health care - that the children of poorer Americans deserve access to the same healthcare as the children of richer Americans.
The book is a bit disjointed due to multiple introductions by others introducing the book and noting Reinhardt’s accomplishments. That is OK. There is still plenty of his work that come through.
Health Economics and healthcare policy are strange domains. Healthcare is a huge portion of the economy, closing in on 20% of the US GDP.It consumes huge amounts of resources, affects millions of workers, and readily fits into settings where economic analysis has much to offer in explaining complex situations. For example, the title of the book refers to an analysis that Reinhardt makes that Americans do not really consume more or better healthcare than those in other developed nations despite their much higher expenditures. They just pay a lot more for it due to much higher prices. Readers not familiar with pricing issues will benefit from considering this and even going back to the source articles.
Having said that, healthcare is also an area that is so incredibly complex and rapidly changing the traditional notions of shopping and marketplace behaviors seem out of place. Quality of goods and services is difficult to determine and strategize about. Under such conditions, health care may not appear to be a shining example of market economics. It is hard to blithely talk about markets doing this or that in healthcare and strange constructions such as “third party payers” and “managed care” become commonplace. But in conjunction with political dynamics, a careful analysis will be worth the effort.
Reinhardt’s book provide a perspective based on such a careful analysis. He is clear, reasoned, and insightful. The book sums up much of his prior work but if you have not read his articles, this is a good place to start. In terms of information, the book provides a clear and up to date summary of where the health care debate in America was in 2017 and prior to the 2018 elections. That alone makes the book well worth reading.
...but the value of the book is much more than an update. Reinhardt provides a strong ethical perspective on health care debates. To him, virtually all health policy debates in the US involve the grand question of whether health care should be rationed by income or should be provided to all irrespective of income class. He notes how there are defensible arguments for each position but that in the US, politicians have not openly engaged the ethical basis of health care debates but instead have posed issues more in terms of complex technical issues. Reinhardt also provides international comparisons on this showing how other developed nations have addressed the social and ethical questions of health care head on in developing their policies. The US is an outlier for not doing so. Reinhardt leaves no doubt regarding where he stands on the need for all to have access to health care - that the children of poorer Americans deserve access to the same healthcare as the children of richer Americans.
The book is a bit disjointed due to multiple introductions by others introducing the book and noting Reinhardt’s accomplishments. That is OK. There is still plenty of his work that come through.
January 27, 2020
A very informative summary and teaching of our health care system and policies from the late Princeton professor and internationally respected health economist, Uwe Reinhardt. His ability to teach well is an important aspect to being able to learn about this complex topic and I am so appreciative of his sharing that through this book (and to his colleague and widower, Tsung-Mei Cheng, for the work to see this book to publication after Uwe's death and the epilogue that adds important context). Uwe's bipartisan approach and hard scientific facts cuts to the chase and lets no one off the hook. "Knowing is not enough; we must apply. Willing is not enough; we must do." (Geothe) It's important to read this book to first KNOW so that change can happen. "When informed citizens become engaged, big changes can happen for the good of the society as a whole."
September 30, 2019
Priced Out is a relatively short, but fantastic, book on the woes of American Health Care. Reinhardt sadly passed away before he could finish it. His wife, also a very accomplished health care economist, completed it. But even in this abbreviated version, Priced Out is incredibly impactful and wide-ranging.
Reinhardt did an amazing job throughout his career in performing passionate, yet non-partisan, analyses of health care economics in the US, tempered through the lens of ethics. The important question on distributive social ethics he has left all of us with is, "To what extent should the better-off members of society be made to be their poorer and sicker brothers' and sisters' keepers in healthcare?”
Reinhardt did an amazing job throughout his career in performing passionate, yet non-partisan, analyses of health care economics in the US, tempered through the lens of ethics. The important question on distributive social ethics he has left all of us with is, "To what extent should the better-off members of society be made to be their poorer and sicker brothers' and sisters' keepers in healthcare?”
December 18, 2019
If you're a health policy dork, you probably enjoyed Uwe Reinhardt's columns in the New York Times. Here, in his last book, Reinhardt presents a brief explanation of why the US health system is so broken and the ethical considerations we refuse to discuss openly. There's a lot of data and tables, which he explains thoroughly, and an analysis of the 2017 reform proposals.
I think his final parting shot of allowing the rugged individualists to do what they want, at a sharp price, wouldn't work the way he think it might (people really DO think they'll be just fine), but it's not fleshed out as a policy proposal.
I think his final parting shot of allowing the rugged individualists to do what they want, at a sharp price, wouldn't work the way he think it might (people really DO think they'll be just fine), but it's not fleshed out as a policy proposal.
April 26, 2019
The late author's final book describes the reality of US healthcare in uncommonly clear (and dismaying) terms. The key issue: "To what extent should the better-off members of society be made to be their poorer and sicker brother's and sister's keepers in healthcare?"
May 18, 2019
I miss Uwe. (this is an entry level exploration of the last 10 years of health policy in America. Not an important read if you are well versed in health policy. But Uwe is the greatest.)
June 13, 2022
Priced Out is a great book. Much of it is a guide to the American healthcare system and its various failings. The healthcare industry is notoriously complex. It is an incongruous patchwork of various public and private institutions which somehow fails to get enough done. Healthcare as a percentage of GDP in the United States is embarrassingly high and is only getting higher. Uwe compares it to Pac-Man, eating and eating until it has captured all of our income. Average health spending for a family of four is almost half of the median income in the united states. Another troubling statistic is that, if we compare value for money spent, we tend to just get less care than other countries.
What is driving these cost increases isn't immediately clear. Medicare and Medicaid aren't as unsustainable as pundits tend to say, but still, personal health spending is growing much faster than the CPI. When this is coupled with increasing income inequality, we get a serious problem on our hands, especially since higher inequality increases Medicaid spending. Some tend to say that as we get richer as a country, we spend more on healthcare based on our increased ability to pay. This is generally true for countries overall, but the spending in the United States is much higher than this trend indicates.
Okay, what about aging? We have a high elderly population and they must be draining money. Well, the elderly don't make up as much of a proportion of the population as in many other developed countries and our spending is much higher compared to countries with similar proportionalities. Okay . . . how about prices? Finally, we seem to have something of an answer. Prices for healthcare goods are much, much higher when compared to similar goods in other countries. Think about that. The same quality of care for double or triple the price.
There is another factor in this problem. Administration. A highly complex payment/distribution system demands a highly complex administrative bureaucracy, and they tend to rake off much of the money spent without actually increasing the level of care. For every doctor, there are 16 others in the clinical industry. 6 of those 16 have direct clinical roles, while the other 10 are management and administration. For every doctor, there are 10 non-clinical roles. Wow.
If these people were instrumental in guaranteeing better patient care, it might be okay, but there is no association. They are inefficient, plain, and simple. Look up a healthcare value chain or drug distribution graphic and you'll be able to see how many middlemen are involved. Plus, each company needs to spend money on advertising and profits and these must be reclaimed through this system. So, more money that could be saving lives is lost to frivolous corporate usage.
Healthcare in the United States is bizarre. There are really no 'prices' for healthcare. From the consumer side, purchasing is an opaque process. You pretty much just get the bill and deal with it as it comes. This is because of the strange way that payment is negotiated through providers, insurers, and the government. There is no ubiquity in this process, though. One can see vast price differentials even within cities. Some kind of all-payer system would likely solve this problem but America doesn't deal in solutions.
Part of the problem seems to be with economic theory. The assumption that a rational consumer can intelligently navigate a market just doesn't apply to healthcare (as if it applies anywhere). Reinhardt compares it to blindfolded shoppers in department stores searching helplessly for what they need. And NEED is a key word here. Healthcare is almost like a tax, it is somewhat compulsory, but even taxes are more transparent than medical bills. Any factor that contributes to market failure is at play in the healthcare industry.
Dr. Reinhardt is notoriously bipartisan and seemingly wants people to be honest about their ethical and political convictions rather than masking them. Do you think healthcare should be distributed through income class? Be honest about it. Do you think it should be a social good? Own up to it. Later in the book, he gives significant consideration to the Affordable Care Act and the Republican-sponsored AHCA and BCRA. He tries to understand their ethical visions and is fair in his general appraisal.
Differing ethical visions tend to hinge on two different ways of pricing. Actuarial and community-rated. Actuarial is based on risk, so a sicker patient will pay much more. Community-rated programs attempt to mitigate this by aggregating risk, but healthier people will end up paying more. This gives them an incentive to leave, which drives the price up further, which can cause another group to opt out, which has a similar effect. This feedback loop is fueled by adverse selection and is known as the death spiral. It’s why community-based arrangements tend to increase in price despite being fairer.
Ultimately, the question of how much we should take care of our sick and disabled countrymen must be addressed clearly. To do this, he goes through Obamacare and the aforementioned Republican proposals to bring out their ethical views. Obamacare obviously tends towards helping the poor and the sick, and it worked in getting many people insured who previously weren’t, but it wasn’t perfect and obviously raised premiums for the middle class. The Republican proposals are more libertarian and individualist. They focus on decreasing the deficit and letting people find their own way. It tends to benefit the young and the healthy while hurting the old and the sick.
Reinhardt’s own view is positive-ish towards Obamacare but he would like to fix it. His main proposal is to allow people to opt out of the community-rated pools and take their chances on the market, but they would be barred from ever re-joining the community-rated pools. I tend to agree with this. It allows libertarians to choose their own path but mitigates adverse selection while still allowing them to use Medicaid and Medicare because letting people go unhelped is bad.
The final part of the book is a posthumously compiled summary of Reinhardt’s own views through previous quotations. He was a fan of single-payer plans but thought that it wouldn’t work in the United States because we were simply too corrupt. Our regulatory boards are too easily captured by special interests, which doesn’t happen in places that have single-payer systems which actually work. He advocated all-payer systems or price-referencing, both of which seem better than our current system.
I did my best to summarize the book here, but if you are even moderately interested in health economics, this is a great introduction. There are also plenty of sources listed for you to continue your reading. It was a pleasure to read and I’ll probably return to specific chapters here and there.
What is driving these cost increases isn't immediately clear. Medicare and Medicaid aren't as unsustainable as pundits tend to say, but still, personal health spending is growing much faster than the CPI. When this is coupled with increasing income inequality, we get a serious problem on our hands, especially since higher inequality increases Medicaid spending. Some tend to say that as we get richer as a country, we spend more on healthcare based on our increased ability to pay. This is generally true for countries overall, but the spending in the United States is much higher than this trend indicates.
Okay, what about aging? We have a high elderly population and they must be draining money. Well, the elderly don't make up as much of a proportion of the population as in many other developed countries and our spending is much higher compared to countries with similar proportionalities. Okay . . . how about prices? Finally, we seem to have something of an answer. Prices for healthcare goods are much, much higher when compared to similar goods in other countries. Think about that. The same quality of care for double or triple the price.
There is another factor in this problem. Administration. A highly complex payment/distribution system demands a highly complex administrative bureaucracy, and they tend to rake off much of the money spent without actually increasing the level of care. For every doctor, there are 16 others in the clinical industry. 6 of those 16 have direct clinical roles, while the other 10 are management and administration. For every doctor, there are 10 non-clinical roles. Wow.
If these people were instrumental in guaranteeing better patient care, it might be okay, but there is no association. They are inefficient, plain, and simple. Look up a healthcare value chain or drug distribution graphic and you'll be able to see how many middlemen are involved. Plus, each company needs to spend money on advertising and profits and these must be reclaimed through this system. So, more money that could be saving lives is lost to frivolous corporate usage.
Healthcare in the United States is bizarre. There are really no 'prices' for healthcare. From the consumer side, purchasing is an opaque process. You pretty much just get the bill and deal with it as it comes. This is because of the strange way that payment is negotiated through providers, insurers, and the government. There is no ubiquity in this process, though. One can see vast price differentials even within cities. Some kind of all-payer system would likely solve this problem but America doesn't deal in solutions.
Part of the problem seems to be with economic theory. The assumption that a rational consumer can intelligently navigate a market just doesn't apply to healthcare (as if it applies anywhere). Reinhardt compares it to blindfolded shoppers in department stores searching helplessly for what they need. And NEED is a key word here. Healthcare is almost like a tax, it is somewhat compulsory, but even taxes are more transparent than medical bills. Any factor that contributes to market failure is at play in the healthcare industry.
Dr. Reinhardt is notoriously bipartisan and seemingly wants people to be honest about their ethical and political convictions rather than masking them. Do you think healthcare should be distributed through income class? Be honest about it. Do you think it should be a social good? Own up to it. Later in the book, he gives significant consideration to the Affordable Care Act and the Republican-sponsored AHCA and BCRA. He tries to understand their ethical visions and is fair in his general appraisal.
Differing ethical visions tend to hinge on two different ways of pricing. Actuarial and community-rated. Actuarial is based on risk, so a sicker patient will pay much more. Community-rated programs attempt to mitigate this by aggregating risk, but healthier people will end up paying more. This gives them an incentive to leave, which drives the price up further, which can cause another group to opt out, which has a similar effect. This feedback loop is fueled by adverse selection and is known as the death spiral. It’s why community-based arrangements tend to increase in price despite being fairer.
Ultimately, the question of how much we should take care of our sick and disabled countrymen must be addressed clearly. To do this, he goes through Obamacare and the aforementioned Republican proposals to bring out their ethical views. Obamacare obviously tends towards helping the poor and the sick, and it worked in getting many people insured who previously weren’t, but it wasn’t perfect and obviously raised premiums for the middle class. The Republican proposals are more libertarian and individualist. They focus on decreasing the deficit and letting people find their own way. It tends to benefit the young and the healthy while hurting the old and the sick.
Reinhardt’s own view is positive-ish towards Obamacare but he would like to fix it. His main proposal is to allow people to opt out of the community-rated pools and take their chances on the market, but they would be barred from ever re-joining the community-rated pools. I tend to agree with this. It allows libertarians to choose their own path but mitigates adverse selection while still allowing them to use Medicaid and Medicare because letting people go unhelped is bad.
The final part of the book is a posthumously compiled summary of Reinhardt’s own views through previous quotations. He was a fan of single-payer plans but thought that it wouldn’t work in the United States because we were simply too corrupt. Our regulatory boards are too easily captured by special interests, which doesn’t happen in places that have single-payer systems which actually work. He advocated all-payer systems or price-referencing, both of which seem better than our current system.
I did my best to summarize the book here, but if you are even moderately interested in health economics, this is a great introduction. There are also plenty of sources listed for you to continue your reading. It was a pleasure to read and I’ll probably return to specific chapters here and there.
January 19, 2023
I was fortunate enough to meet Prof. Reinhardt and hear him speak several times. This book is a culmination of his life's work; understanding and describing the US health care system. However, this is a work for the general public, not health care economists.
Prof. Reinhart's gift was the constant awareness that the health care system is meant to care for people. For him, there is no point in describing a system that was simply based on an exchange of currency for a service. At the same time, he was acutely aware of how allocation of resources and costs can affect people and how health care cannot be provided without someone paying for it.
As Paul Krugman points out in his foreword, the question Prof. Reinhardt posed in a JAMA article on the Clinton Health Plan in 1993: "Should a child of a poor American family have the same chance of receiving adequate prevention and treatment as the child of a rich family?" When he served on an advisory commission in the state of New Jersey, Prof. Reinhardt challenged legislators to find a pediatrician who would treat their children at the same reimbursement they proposed to pay pediatricians for poor children on Medicaid. If the legislators couldn't find a pediatrician who would accept that payment, why should they expect a poor parent to be able to?
Throughout the book, one can find clearly stated aphorisms and difficult questions that lay out the competing interests that make reforming the US health system so difficult.
"To what extent should the better-off members of society be made to be their poorer brothers' and sisters' keepers in health care?"
If you want data, you will find plenty of it here. If you think Prof. Reinhardt is a gooey left winger who wants a single payer system, you will be disappointed. He, with clearly stated reason, rejects that solution. But, he never loses sight of what matters: Finding a way to have an American health care system that will take of our health care needs with dignity without bankrupting individuals or families.
Prof. Reinhart's gift was the constant awareness that the health care system is meant to care for people. For him, there is no point in describing a system that was simply based on an exchange of currency for a service. At the same time, he was acutely aware of how allocation of resources and costs can affect people and how health care cannot be provided without someone paying for it.
As Paul Krugman points out in his foreword, the question Prof. Reinhardt posed in a JAMA article on the Clinton Health Plan in 1993: "Should a child of a poor American family have the same chance of receiving adequate prevention and treatment as the child of a rich family?" When he served on an advisory commission in the state of New Jersey, Prof. Reinhardt challenged legislators to find a pediatrician who would treat their children at the same reimbursement they proposed to pay pediatricians for poor children on Medicaid. If the legislators couldn't find a pediatrician who would accept that payment, why should they expect a poor parent to be able to?
Throughout the book, one can find clearly stated aphorisms and difficult questions that lay out the competing interests that make reforming the US health system so difficult.
"To what extent should the better-off members of society be made to be their poorer brothers' and sisters' keepers in health care?"
If you want data, you will find plenty of it here. If you think Prof. Reinhardt is a gooey left winger who wants a single payer system, you will be disappointed. He, with clearly stated reason, rejects that solution. But, he never loses sight of what matters: Finding a way to have an American health care system that will take of our health care needs with dignity without bankrupting individuals or families.
November 3, 2025
To what extent should the rich and healthy be responsible for the poor and sick? I think this book did a fine job of breaking down pieces of how healthcare is financed in the US into easy-to-digest chunks. and just a reminder, economists don't always have a solid understanding of healthcare and healthcare professionals don't always have a solid understanding of economics, and politicians don't really care about either thing anyway so i guess just hope you aren't poor and don't get sick 🤷♀️
April 27, 2025
Worth the time but quite skippable. "We've Got You Covered" was better
April 12, 2024
A great primer on healthcare economics and insurance but definitely a technical read. Thankfully it’s short and concise.
July 5, 2025
More of an essay/thesis than a book, but an interesting read. I appreciated the direct comparisons of Obamacare to the proposed republican alternatives.
May 3, 2020
Brief and insightful book on the cause of high healthcare prices in the United States. Places most of the blame on our inability to arrive at consensus about the nature of healthcare: is it a universal human right that should be distributed according to need, or is it a consumer good that should be distributed according to the ability to pay?
Main points: Healthcare in the United States is overpriced compared to similar or better care available in other countries. Some of the major components of high prices are: 1) employer-based private insurance, because there is no incentive to contain prices. Employees see healthcare as a “perk” covered by their employer thus no incentive to ration, but of course employers must transfer more and more wage to cover rising health insurance costs; employers don’t mind this, because healthcare expenditures can be deducted as a business expense and are not taxed as payroll 2) a huge number of price points for identical procedures/tests creates the need for an army of clerks and administrators, all of whom are ultimately financed by (rising) insurance premiums; 3) the many different prices for different payers means that it is impossible for “consumers” to compare prices between providers of a particular test or procedure – healthcare prices are shrouded in secrecy; 4) fee for service pricing means that providers are paid per test/procedure thus creating another inflationary process, especially when insurance paying; 5) increasing legal complexity creates new opportunities for fraud, as well as markets for advisors and experts who also drive up prices; 6) drug distribution is also complex and lacks transparency. Ultimately healthcare reform will rest on the ability of Americans to reach a consensus on a basic moral question: is it a human right that should be rationed according to need, or is it a consumer item that should be rationed according to income/ability to pay? The author is pessimistic about the chances for real healthcare reform because there are so many vested interests in the status quo (significant tax benefits for employer-based healthcare, powerful insurance and pharmaceuticals industries) and because the influence of money in politics is so pervasive.
Main points: Healthcare in the United States is overpriced compared to similar or better care available in other countries. Some of the major components of high prices are: 1) employer-based private insurance, because there is no incentive to contain prices. Employees see healthcare as a “perk” covered by their employer thus no incentive to ration, but of course employers must transfer more and more wage to cover rising health insurance costs; employers don’t mind this, because healthcare expenditures can be deducted as a business expense and are not taxed as payroll 2) a huge number of price points for identical procedures/tests creates the need for an army of clerks and administrators, all of whom are ultimately financed by (rising) insurance premiums; 3) the many different prices for different payers means that it is impossible for “consumers” to compare prices between providers of a particular test or procedure – healthcare prices are shrouded in secrecy; 4) fee for service pricing means that providers are paid per test/procedure thus creating another inflationary process, especially when insurance paying; 5) increasing legal complexity creates new opportunities for fraud, as well as markets for advisors and experts who also drive up prices; 6) drug distribution is also complex and lacks transparency. Ultimately healthcare reform will rest on the ability of Americans to reach a consensus on a basic moral question: is it a human right that should be rationed according to need, or is it a consumer item that should be rationed according to income/ability to pay? The author is pessimistic about the chances for real healthcare reform because there are so many vested interests in the status quo (significant tax benefits for employer-based healthcare, powerful insurance and pharmaceuticals industries) and because the influence of money in politics is so pervasive.
September 3, 2019
This is an absolute must-read for anyone even remotely interested in healthcare in the US. The author does a masterful job of presenting the landscape of the current system, including its pros and cons, before providing a thorough examination of several competing proposals for reform. He further injects his own thoughts on corrective action and provides some predictions for the future.
What sets this book apart, however, is not only the fact that the entire book is grounded in economics, but that Reinhardt makes it clear that no discussion of healthcare can be had without considering ethics -- something that is typically absent in discussion of the topic in the US. By asking two related questions ex ante: 1) Should the child of a poor family have equal access to care as the child of a rich family, and 2) to what extent are we our brother's keepers should they fall ill, Reinhardt is able to provide a thought-provoking and thorough glimpse into one of the most complicated systems on the planet.
What sets this book apart, however, is not only the fact that the entire book is grounded in economics, but that Reinhardt makes it clear that no discussion of healthcare can be had without considering ethics -- something that is typically absent in discussion of the topic in the US. By asking two related questions ex ante: 1) Should the child of a poor family have equal access to care as the child of a rich family, and 2) to what extent are we our brother's keepers should they fall ill, Reinhardt is able to provide a thought-provoking and thorough glimpse into one of the most complicated systems on the planet.
November 24, 2019
Brilliant description of the values based debate in healthcare that is never discussed openly. Detailed descriptions of the affordable care act and the Republican alternative proposal of 2017 that failed to pass Congress.
The best part of the book for me was the first few chapters that describe the state of US healthcare at present (2017 when written.)
Uwe was the brightest star in the healthcare debate, always using data to support his arguments.
He was so smart, in fact, that he was able to publish a great book 2 years after his death (with the help of his wife.)
The best part of the book for me was the first few chapters that describe the state of US healthcare at present (2017 when written.)
Uwe was the brightest star in the healthcare debate, always using data to support his arguments.
He was so smart, in fact, that he was able to publish a great book 2 years after his death (with the help of his wife.)
March 10, 2020
Excellent, MUST read. Clarified my thinking on a number of points, I’ve been in the healthcare industry for 12 years now,and while my focus is on the technology side,I’ve never been too far from the economics. I was struck by his evaluation of the US willingness to accept a Medicare for all solution. Certainly we’ll know more soon. Sad to have lost such a mind. This is too important a subject to ignore and so many pundits neither understand the economics nor how healthcare delivery works, and this is a quick read and is well suited to most readers.
January 31, 2024
Reinhardt does a great job explaining to the average non-economist how the US healthcare system fails in treating people equally. He really hammers home the idea that, in America, a rich person's life is really worth more than that of a poor person's. Another positive aspect aspect of this book was the clarity with which UWE broke down the subsidies given to persons of different income on the ACA exchanges - and using this to help the reader differentiate between actuarally rated vs community rated premiums (insurance theory). A great read by a much-loved professor. RIP.
May 16, 2019
The clearest explication of the ethical (or lack thereof) basis of health policy in the U.S. (and other countries) I have read. Presents "both sides" of the arguments for and against treating healthcare as a social good vs. and consumer commodity and clearly explains that we, in the U.S., hide the ethical basis of our decisions and speak only of the programatic and technical.
Great forwards by Krugman and Frist as well as an epilogue by his wife, Tseung-Mei Cheng.
Great forwards by Krugman and Frist as well as an epilogue by his wife, Tseung-Mei Cheng.
August 2, 2019
A must read book to understand the complexity of the American health care system. He best sums the situation up by stating: "Not surprisingly, our national health policy is a bundle of confusion and contradictions". This is a relatively short and easily understood description of the debate being held in American society today.
December 10, 2019
My first encounter with the late Uwe Reinhardt -- very smart, insightful and sometimes even funny analyses of the American health care nightmare. Reinhardt raised the only compelling objection to Medicare-for-all type health care system that I've heard: American health care policy is too corrupt to make it work. I'm not persuaded by that, but it's an objection that needs to be reckoned with.
November 13, 2019
Read This Book! The best "one stop shop" of explanation and analysis of the American Healthcare System.
December 18, 2021
Since around 2005, I’ve attempted to learn the big picture of American healthcare while focusing on my little niche in the system. After 16 years (and several legislative bills with major changes), I find myself as befuddled by the economic organization as I was at the beginning. Before dying in 2017, Reinhardt was a leading voice in healthcare economics. A Canadian by citizenship and a German by birth but an American by living, he mastered the nuances of this field and weighed in on many big questions confronting America in this book.
Reinhardt had an uncanny ability always to keep people in the center of his economic analyses of healthcare. In the epilogue, his wife and research partner suspects this was because he and his siblings were sustained by the German socialized healthcare system as youth. As such, the first half of this book is dedicated to economics, and the second half, to ethics.
Two forewards are provided by liberal economist Paul Krugman and conservative US Senator and physician Bill Frist. This ideological breadth of respect bespeaks of how respected Reinhardt’s voice is. He is no mere partisan, but instead a scholar. He pragmatically and wisely contends that the Canadian and German health systems might not serve as good models for American democracy. He is skeptical of “Medicare-for-All” proposals. His advice tries to combine the better aspects of conservative and liberal proposals.
Importantly, he argues that one often-unstated question in American debates is most important. Do Americans want healthcare as a “social good” available for all or as an “economic good” accessible disproportionately by economic class? In speculating about what a commonly acceptable system would consist of, he laudably tries to find middle ground. Few voices in American society (in 2021) seem open to such middle ground on healthcare, so I welcome this approach.
Healthcare is the biggest economic segment in American society. As such, this short and readable book should be on the radar for intelligent, politically interested citizens. It has particular import for healthcare workers in a often confusing system. It presents the big quandary of the financials – the weakness of the system – without denigrating the quality work by physicians, nurses, technologists, and other contributors. Like any good economist, he advocates for evidence-based healthcare administration and specifies a better allocation of resources. This last testament of this luminous figure should be read to elevate the level of our social dialogue.
Reinhardt had an uncanny ability always to keep people in the center of his economic analyses of healthcare. In the epilogue, his wife and research partner suspects this was because he and his siblings were sustained by the German socialized healthcare system as youth. As such, the first half of this book is dedicated to economics, and the second half, to ethics.
Two forewards are provided by liberal economist Paul Krugman and conservative US Senator and physician Bill Frist. This ideological breadth of respect bespeaks of how respected Reinhardt’s voice is. He is no mere partisan, but instead a scholar. He pragmatically and wisely contends that the Canadian and German health systems might not serve as good models for American democracy. He is skeptical of “Medicare-for-All” proposals. His advice tries to combine the better aspects of conservative and liberal proposals.
Importantly, he argues that one often-unstated question in American debates is most important. Do Americans want healthcare as a “social good” available for all or as an “economic good” accessible disproportionately by economic class? In speculating about what a commonly acceptable system would consist of, he laudably tries to find middle ground. Few voices in American society (in 2021) seem open to such middle ground on healthcare, so I welcome this approach.
Healthcare is the biggest economic segment in American society. As such, this short and readable book should be on the radar for intelligent, politically interested citizens. It has particular import for healthcare workers in a often confusing system. It presents the big quandary of the financials – the weakness of the system – without denigrating the quality work by physicians, nurses, technologists, and other contributors. Like any good economist, he advocates for evidence-based healthcare administration and specifies a better allocation of resources. This last testament of this luminous figure should be read to elevate the level of our social dialogue.
October 4, 2023
In one fell swoop, Reinhardt presents his assessment of the economic and moral failings of the U.S. health care system. The thrust of this book is his insistence that our disagreements on health policy are rooted in ethics. It’s not about choosing the best policy levers but first addressing our most basic premises. He frequently invokes his famous question: “…should the child of a poor American family have the same chance of avoiding preventable illness or of being cured from a given illness as does the child of a rich American family?" This is the core debate.
There’s no doubt this question is aimed at right-leaning policy makers and designed to make them uncomfortable. Republicans have long been the road block of would-be paths to government-sponsored universal health care coverage. But no elected official would risk outright saying we should treat poor and rich kids differently and survive the PR backlash. So they ignore this question to maintain the status quo, and he calls them out for it.
The shortcoming of his book is the meager effort made to present opposing viewpoints. His question is rhetorically designed that one answer seems heartless and the other necessitates accepting further government involvement in health care. I think this is a false choice and that there are at least two defensible ethical positions if you disagree with him. Conservatives may not articulate them well though.
First and foremost, I think conservatives value overall prosperity more so than equity. If given the choice, I suspect they’d pick for the average American to be better off even if it meant greater inequality. I see this as a valid ethical argument, particular when in line with John Rawls’ Difference Principle. Second, many conservatives see health status as heavily influenced by personal responsibility and other controllable factors. This ideology shows up in work requirements for insurance coverage as well as health savings account utilization. I interpret conservatives’ intent for health insurance is to alleviate the bad circumstances outside of people’s control but will allow people to face the consequences of poor decisions. This would fall within the ethical camp of Luck Egalitarianism, which has numerous variations. Progressives vehemently disagree with this approach and make many valid arguments for the social and structural determinants of health (see The Health Gap by Michael Marmot), but it’s an ongoing philosophical debate.
I say all that as a rebuttal to any claim that conservatives have no ethical bearings, which the book seems to imply. I don’t share those exact convictions, but if he’s right that the debate is fundamentally an ethical one, we should uncover the beliefs on both sides. In sum, I agree with Reinhardt on several points, 1) ethical disagreements undergird our policy disagreements, 2) much of U.S. health care is rationed by ability to pay, and 3) universal coverage should be our goal. I hope we can have good faith debates about these issues, and most especially I hope we can accurately articulate the viewpoints of our opponents.
Reference:
Reinhardt UE. Wanted: A Clearly Articulated Social Ethic for American Health Care. JAMA. 1997;278(17):1446–1447. doi:10.1001/jama.1997.03550170076036
There’s no doubt this question is aimed at right-leaning policy makers and designed to make them uncomfortable. Republicans have long been the road block of would-be paths to government-sponsored universal health care coverage. But no elected official would risk outright saying we should treat poor and rich kids differently and survive the PR backlash. So they ignore this question to maintain the status quo, and he calls them out for it.
The shortcoming of his book is the meager effort made to present opposing viewpoints. His question is rhetorically designed that one answer seems heartless and the other necessitates accepting further government involvement in health care. I think this is a false choice and that there are at least two defensible ethical positions if you disagree with him. Conservatives may not articulate them well though.
First and foremost, I think conservatives value overall prosperity more so than equity. If given the choice, I suspect they’d pick for the average American to be better off even if it meant greater inequality. I see this as a valid ethical argument, particular when in line with John Rawls’ Difference Principle. Second, many conservatives see health status as heavily influenced by personal responsibility and other controllable factors. This ideology shows up in work requirements for insurance coverage as well as health savings account utilization. I interpret conservatives’ intent for health insurance is to alleviate the bad circumstances outside of people’s control but will allow people to face the consequences of poor decisions. This would fall within the ethical camp of Luck Egalitarianism, which has numerous variations. Progressives vehemently disagree with this approach and make many valid arguments for the social and structural determinants of health (see The Health Gap by Michael Marmot), but it’s an ongoing philosophical debate.
I say all that as a rebuttal to any claim that conservatives have no ethical bearings, which the book seems to imply. I don’t share those exact convictions, but if he’s right that the debate is fundamentally an ethical one, we should uncover the beliefs on both sides. In sum, I agree with Reinhardt on several points, 1) ethical disagreements undergird our policy disagreements, 2) much of U.S. health care is rationed by ability to pay, and 3) universal coverage should be our goal. I hope we can have good faith debates about these issues, and most especially I hope we can accurately articulate the viewpoints of our opponents.
Reference:
Reinhardt UE. Wanted: A Clearly Articulated Social Ethic for American Health Care. JAMA. 1997;278(17):1446–1447. doi:10.1001/jama.1997.03550170076036
July 23, 2019
Healthcare is expensive in America. Skyrocketing costs ensure that it is eventually going to be too expensive for anyone except the richest among us. In Priced Out Uwe E Reinhardt discusses the reasons behind this. It is a fascinating account of the whys and wherefores.
The basic idea is that healthcare costs are inflated by administrative costs and the complex and confusing system of health insurance in the United States. Although I don’t agree with Donald J Trump in a lot of his ideas and personality, I do feel that he is correct in saying that we pay too much for healthcare. With charts and graphs galore, Reinhardt explains this and compares how much we pay to countries of similar standards of living. Through all of this Reinhardt explains the economic cost of our healthcare.
In the second half of the book, Reinhardt explains the ethical portion of our healthcare. It appears that this is a troubling idea unique to the United States. If you have a person who is both healthy and wealthy, should they be forced to pay for someone that might have the need for cancer treatments? Put another way, should the people that take care of themselves to be forced to pay the same premiums and get the same care as someone who is a couch potato? This is an interesting question. The kneejerk response is no, from both sides of the political divide. There are exceptions to this; for instance, the book mentions Jimmy Kimmel and his son.
So the book also goes into the problems of the Affordable Care Act, or Obamacare, and the proposed bill that would replace it with something else. This book was written in 2017 and I am grossly misinformed on a lot of things since I don’t like watching the news, therefore, I don’t know if anything like a new healthcare law was passed.
Reinhardt died in 2017, leaving behind a great legacy, and this book. I enjoyed it a lot, but much of it did bother me. It just seems wrong that we are still having this discussion in the year 2019. In any case, this book was great.
The basic idea is that healthcare costs are inflated by administrative costs and the complex and confusing system of health insurance in the United States. Although I don’t agree with Donald J Trump in a lot of his ideas and personality, I do feel that he is correct in saying that we pay too much for healthcare. With charts and graphs galore, Reinhardt explains this and compares how much we pay to countries of similar standards of living. Through all of this Reinhardt explains the economic cost of our healthcare.
In the second half of the book, Reinhardt explains the ethical portion of our healthcare. It appears that this is a troubling idea unique to the United States. If you have a person who is both healthy and wealthy, should they be forced to pay for someone that might have the need for cancer treatments? Put another way, should the people that take care of themselves to be forced to pay the same premiums and get the same care as someone who is a couch potato? This is an interesting question. The kneejerk response is no, from both sides of the political divide. There are exceptions to this; for instance, the book mentions Jimmy Kimmel and his son.
So the book also goes into the problems of the Affordable Care Act, or Obamacare, and the proposed bill that would replace it with something else. This book was written in 2017 and I am grossly misinformed on a lot of things since I don’t like watching the news, therefore, I don’t know if anything like a new healthcare law was passed.
Reinhardt died in 2017, leaving behind a great legacy, and this book. I enjoyed it a lot, but much of it did bother me. It just seems wrong that we are still having this discussion in the year 2019. In any case, this book was great.
April 18, 2024
This book is short, a quick read, and easily digestible (I think).
TL,DR: American health care is awful, expensive, unethical, inequitable, unjust. Reinhardt's proposal? A social insurance system (not social medicine) in which everyone under 25 is covered, no questions asked. At 25, you choose either to permanently opt-in, or to take the "rugged individualist" permanent opt-out option.
Those who keep it support it just like medicare today, through paycheck/tax contributions. Those who choose the individualist option do not contribute to it and can pull themselves up with their own bootstraps by buying their own healthcare and insurance. BUT if they ever need, but can't afford healthcare, they will still be treated under the medicare system, because it's the right thing to do. The catch? They have to pay it back. That could be wage garnishing, community service, estate reclamation, etc. But because they chose not to be "on the lamb", society will honor their choice and expect them to pay for the services they use.
If you are someone who touts a "free market", just know that employees relying on employer-provided health insurance does not make the employees freer. I know you've heard someone in your life (or maybe yourself?) say, "I would change jobs, but...I can't lose this healthcare." People stay in jobs they wouldn't otherwise because they can't afford to be without it. People wait until problems are so bad they could die, because they can't afford to go to a doctor and risk having the doctor tell them it's nothing. We wait longer and die more than other level 4 countries because of this healthcare system. It's cruel and unethical and needs to stop.
It's cheaper to be a good person.
TL,DR: American health care is awful, expensive, unethical, inequitable, unjust. Reinhardt's proposal? A social insurance system (not social medicine) in which everyone under 25 is covered, no questions asked. At 25, you choose either to permanently opt-in, or to take the "rugged individualist" permanent opt-out option.
Those who keep it support it just like medicare today, through paycheck/tax contributions. Those who choose the individualist option do not contribute to it and can pull themselves up with their own bootstraps by buying their own healthcare and insurance. BUT if they ever need, but can't afford healthcare, they will still be treated under the medicare system, because it's the right thing to do. The catch? They have to pay it back. That could be wage garnishing, community service, estate reclamation, etc. But because they chose not to be "on the lamb", society will honor their choice and expect them to pay for the services they use.
If you are someone who touts a "free market", just know that employees relying on employer-provided health insurance does not make the employees freer. I know you've heard someone in your life (or maybe yourself?) say, "I would change jobs, but...I can't lose this healthcare." People stay in jobs they wouldn't otherwise because they can't afford to be without it. People wait until problems are so bad they could die, because they can't afford to go to a doctor and risk having the doctor tell them it's nothing. We wait longer and die more than other level 4 countries because of this healthcare system. It's cruel and unethical and needs to stop.
It's cheaper to be a good person.
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