Chapter 14 — Further Reading

On healthcare economics

Kenneth Arrow, "Uncertainty and the Welfare Economics of Medical Care," American Economic Review, 1963 The foundational paper on healthcare market failures. Arrow identified information asymmetry, moral hazard, and adverse selection as reasons healthcare markets differ from other markets. One of the most-cited papers in health economics.

Jonathan Gruber, Health Care Reform: What It Is, Why It's Necessary, How It Works, Hill and Wang, 2011 A graphic-novel-format explanation of the ACA and the economics behind it. Gruber was one of the architects of the ACA. Short, accessible, and surprisingly effective at communicating complex economics.

T.R. Reid, The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care, Penguin, 2009 Reid travels through healthcare systems around the world (UK, Japan, Germany, Switzerland, India, Taiwan) and compares them to the US. Accessible, well-reported, and useful for seeing how other countries have made different tradeoffs.

Elisabeth Rosenthal, An American Sickness: How Healthcare Became Big Business and How You Can Take It Back, Penguin, 2017 An investigative journalist's account of how the U.S. healthcare system became so expensive. Rosenthal documents the structural incentives (from billing to consolidation to pharmaceutical pricing) that drive costs up. Vivid and infuriating.

On the RAND Health Insurance Experiment

Joseph Newhouse and the Insurance Experiment Group, Free for All? Lessons from the RAND Health Insurance Experiment, Harvard University Press, 1993 The definitive summary of the most important experiment in health economics. The finding — that lower cost-sharing increases healthcare utilization — has shaped every subsequent debate about insurance design.

On drug pricing (case study 1)

Aaron Kesselheim, Jerry Avorn, and Ameet Sarpatwari, "The High Cost of Prescription Drugs in the United States: Origins and Prospects for Reform," JAMA, 2016 A comprehensive review of why drug prices are high in the U.S. and what can be done.

William Cefalu et al., "Insulin Access and Affordability Working Group: Conclusions and Recommendations," Diabetes Care, 2018 The American Diabetes Association's consensus statement on insulin affordability.

RAND Corporation, "International Prescription Drug Price Comparisons," 2021 A comparative analysis showing that U.S. prescription drug prices are, on average, 2.56 times higher than prices in 32 other OECD countries.

On the essential worker revelation (case study 2)

Elise Gould and Valerie Wilson, "Black Workers Face Two of the Most Lethal Preexisting Conditions for Coronavirus," Economic Policy Institute, 2020 An early analysis of how racial disparities in occupation and health conditions created unequal COVID exposure.

National Academies of Sciences, Rapid Expert Consultation on the Possibility of Bioaerosol Spread of SARS-CoV-2 for the COVID-19 Pandemic, 2020 Early scientific assessment of workplace transmission risks.

Francesca Mazzolari and Giuseppe Ragusa, "The COVID-19 Pandemic and the Essential Worker Experience," various papers, 2021–2023 A growing body of work on how essential workers fared during and after the pandemic.

On comparative healthcare systems

OECD, Health at a Glance, annual reports The most comprehensive international comparison of healthcare spending, access, and outcomes. Free online at oecd.org. Essential for comparative analysis.

Commonwealth Fund, Mirror, Mirror, multiple editions A comparative assessment of healthcare systems in high-income countries. The U.S. consistently ranks last overall despite spending the most. The report is accessible and well-designed.

William Hsiao, "What Should Macroeconomists Know About Health Care Policy? A Primer," IMF Economic Review, 2007 A clear primer on how different countries have designed their healthcare systems and what the economic tradeoffs are.

On the ACA and US healthcare reform

John McDonough, Inside National Health Reform, University of California Press, 2011 An insider account of how the ACA was designed and passed. Useful for understanding the political economy of healthcare reform.

Amy Finkelstein, Moral Hazard in Health Insurance, Columbia University Press, 2015 A short, rigorous treatment of moral hazard in health insurance, drawing on the Oregon Medicaid experiment (a natural experiment that randomly assigned Medicaid coverage).

The Oregon Health Insurance Experiment (Katherine Baicker, Amy Finkelstein, et al., various papers in New England Journal of Medicine and Quarterly Journal of Economics, 2011–2013) The most important recent natural experiment in health insurance. Found that Medicaid coverage increased healthcare use, improved financial security, and improved mental health, but did not measurably improve physical health outcomes over two years. The interpretation is debated.

A reading order recommendation

If you have time for one of the books above, read Reid's The Healing of America. It gives you the international context that makes the U.S. system's failures vivid.

If you want the foundational economics, read Arrow's 1963 paper. It's short and foundational.

If you want to understand U.S. healthcare costs specifically, read Rosenthal's An American Sickness.

Chapter 15 — The Economics of the Environment and Climate Change — is next. It applies the externality framework from Chapter 11 to the defining economic challenge of the 21st century.