The United States spends over 17 percent of GDP on health care; the next six highest countries spend over 11 percent. This six percent differential indicates an excess spending of approximately one trillion dollars per year. Depending on the benefit from the extra spending, this suggests the possibility of a huge misallocation of resources. Also, because the federal government funds almost half of total health care spending, there are significant effects on the deficit and the debt. The main reasons for the excess are (1) the U.S. pays higher prices for drugs, devices, and equipment and higher fees to specialists and sub-specialists; (2) higher administrative costs; and (3) a more expensive mix of medical care. The seminar will focus on institutional and political explanations for the three proximate reasons.
Victor R. Fuchs is the Henry J. Kaiser Jr Professor Emeritus at Stanford University, in the Departments of Economics and Health Research and Policy. He is also a Research Associate of the National Bureau of Economic Research and a Senior Fellow at SIEPR. He applies economic analysis to social problems of national concern, with special emphasis on health and medical care. He is author of nine books, the editor of six others, and has published over two hundred papers and shorter pieces. His current research focuses on male-female differences in mortality, reform of medical education, and the future of U.S. health care.
His best known work, Who Shall Live? Health, Economics, and Social Choice (1974; expanded edition 1998, 2nd expanded edition 2011), helps health professionals and policy makers to understand the economic and policy problems in health that have emerged in recent decades. Other books include The Service Economy (1968), How We Live (1983), The Health Economy (1986), Women’s Quest For Economic Equality (1988), and The Future of Health Policy (1993). He is the editor of Individual and Social Responsibility: Child Care, Education, Medical Care, and Long-term Care in America (1996).
Professor Fuchs was elected president of the American Economic Association in 1995. He has also been elected to the American Philosophical Society, the American Academy of Arts and Sciences, the Institute of Medicine of the National Academy of Sciences, and is an Honorary Member of Alpha Omega Alpha. He has received the John R. Commons Award, Emily Mumford Medal for Distinguished Contributions to Social Science in Medicine, Distinguished Investigator Award (Association for Health Services Research), Baxter Foundation Health Services Research Prize, and Madden Distinguished Alumni Award (New York University). ASHE’s (American Society of Health Economists) Career Award for Lifetime Contributions to the Field of Health Economics and the RAND Corporation prize for the Best Paper published in the Forum for Health Economics and Policy are named and awarded in honor of Professor Fuchs.
This event is sponsored by the Stanford Center on Democracy, Development and the Rule of Law and the Center for Health Policy/Center for Primary Care and Outcomes Research.