Still Broken: Understanding the U.S. Health Care System

Article excerpt

Still Broken: Understanding the U.S. Health Care System. By Stephen M. Davidson. Stanford, Calif.: Stanford University Press. 2010. 304 pp. $27.95.

In Still Broken, Stephen Davidson takes on the formidable task of attempting to explain the complexities and dysfunction of the U.S. health care delivery system and proposes a series of steps toward reform. Some are well founded in the health policy literature, others are slightly novel, and many are now familiar to most attuned readers of health reform within the context of the Patient Protection and Affordable Care Act of 2010 (ACA). The book, published prior to passage of the ACA, considers both the nature of potential political options for reform, and then proposes broad political strategies to enact those changes. These are not, however, moot points, as Congress this year has begun extended debate of revision, or perhaps even repeal of the ACA in the coming term.

The book essentially can be divided into two parts. The first is a well-researched description of the U.S. health care delivery system through Davidson's lens as an economist. Here he discusses both the inherent shortcomings and exceptional promise of our care system. In the first chapters, Davidson outlines the many advances and contributions of modern medicine to the quality of American lives. He then summarizes the exorbitant and unsustainable costs of the system, both per capita and comparative, and makes the often-heard case that from a population perspective, we in America spend the most and, by all accounts, get the least. From here, Davidson delves deeply into the obvious problems of the system: the uninsured and underinsured, diverse quality of outcomes, inappropriate utilization, inefficiencies created by payment incentives, lack of investment in information technology, and others. Throughout this section, he expertly culls the exhaustive literature and data on a myriad of complex but interrelated issues present within the delivery system. From this discussion follows an outline of the goals for reform.

It is in Chapter 6 where Davidson arguably provides his most important contribution to the ongoing debate, especially for the health policy newcomer, by offering a contextual explanation for how the problems of the health system evolved and why they persist. Here, he also makes his primary point: that rational actors will make irrational decisions if the incentives are so aligned. This is obviously not a new argument and it is one rooted in economic theory, and familiar to scholars of health policy. What Davidson does is make the arguments clear to a broader audience. His explanations are sound, and provide a reasoned lens from which to posit solutions.

The text then turns to examining the primary vehicles for policy change--regulation and the market. He explores fully the nature of competition, where markets work and fail, and under what assumptions and constructs. He explores the nature of prices, how they impact both competition and utilization, and asks key questions about the role of both the provider and patient in health care decision making. He argues that providers, not patients, are best incentivized to promote quality, and that promoting price competition among providers leads to suboptimal outcomes. The discussion culminates with the suggestion that insurance reform is necessary, but is only one component of the change needed to address existing incentive problems; for change to be effective, he writes, it must be systemwide.

Davidson next directs his attention toward reform options that address each incentive shortfall he has identified. As has been true with so many reform prescriptions, his ideas likely will find both support and question. By his own admission, he leaves many of the details of any specific plan to be determined, and focuses instead on broadly defined plan elements. Those attentive to health policy will recognize previously vetted proposals, many of which were included in the ACA legislation in some form; others, including a public insurance option, continue to be debated. …