American Health Care: Why It Costs So Much Yet Remains a Beacon of Growth and Development

Selected by the Association of University Programs in Health Administration
for the Bugbee-Falk Book Award

Is the health sector a curse or a blessing? The American health sector now accounts for a fifth of the economy. American healthcare spending per capita far exceeds that of other developed countries. Yet our health, as measured by life expectancy and infant mortality, is poor by comparison with the developed world. Other measures of quality including hospital-acquired infection are too common. Healthcare costs financially cripple households despite advances associated with the Affordable Care Act. There is widespread dissatisfaction with the American healthcare system and support for more change.

It is also the case that the health sector has been a leader in the evolution of the American economy. Economic development is driven by innovative technology. We tend to applaud new technology and the improvement it brings to our lives. Important recent technologies often grow rapidly and faster than the wider economy. This leads to larger shares of the economy. Yet there is considerable apprehension about costs and economic impact of health spending. This book details important health sector institutions and uniquely, explores linkages between healthcare and broader economic growth. The book addresses asymmetric information between providers and consumers as well as between insurers and beneficiaries. There is a focus on monopoly power in labor markets which contributes to inefficiencies in the system. The author also discusses cost-effectiveness and allocative efficiency as well as emphasizing productivity and its relationship to the wider economy.

Peter Hilsenrath earned a Ph.D. in economics from the University of Texas at Austin. During the 1980’s he held appointments in the Economics Department at the University of the Witwatersrand in Johannesburg and with the Center for Naval Analyses in Alexandria, Virginia. Professor Hilsenrath was with the Department of Health Management and Policy at the University of Iowa from 1989 to 2000 and during that time, spent a year, from 1995 to 1996, as Chief Economist at Syfrets Managed Assets in Cape Town. He later served as founding chair of the Department of Health Management and Policy at the University of North Texas Health Science Center in Fort Worth. He is a Professor at the University of the Pacific in Stockton California and held the Joseph M. Long Chair in Healthcare Management and Economics there from 2009 to 2019. Dr. Hilsenrath has published numerous journal articles and technical reports primarily in healthcare management, economics, public health and medicine. He writes op eds for more general audiences as well and has published in Fortune, Market Watch, The Jerusalem Post, Huffington Post, China Daily, Salon and the Wall Street Journal. He has also made over 100 presentations including at the Pentagon, South Africa’s Parliament and conferences throughout the world.