Code Red

The book is by David Dranove and the subtitle is An Economist Explains How to Revive the Healthcare System Without Destroying It.  Here is the Amazon listing.  Here is the book’s home page.

Code Red is one of the two or three best books on the economics of health care.  It is especially strong on how the current mess evolved historically and what has been tried (or not tried) along the way.  This is the place to go to understands PSROs or what happened to the HMO revolution.  Dranove is very pro-Medicare but he (reluctantly) rejects single-payer systems for limiting innovation.  Instead he finesses the market-government divide by calling for federalistic competition:

Congress should mandate that all states reach targets for the number of uninsured, say, below 5 percent within 5 years.  Congress could tie compliance to a set of financial carrots and sticks, and it does with Medicaid.  To prevent a race to the bottom, Congress should also specify a minimum benefit package.  It would then be up to each state to devise the most effective way of meeting these coverage goals.

I fear that minimum benefit packages will prevent insurance from ever being cheap plus I wonder if Medicaid shouldn’t be done on the national level.  This book won’t make anyone fully happy, but it is a must for fans of health care policy.


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