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Crisis of Abundance: Rethinking How We Pay for Health Care

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If you've ever wondered why health care is so expensive in America, Kling will fill you in. Despite what many of us believe(d), it's not because of greedy pharmas or wasteful paperwork - as Kling shows, those ideas just don't hold water to explain the obscene cost hikes in recent years. Kling makes a great case that what has caused our problems is what he calls "premium medicine" - or health care spending whose cost exceeds its benefit.

As for solutions to our problems, Kling does a good job of unraveling many of the claims made by single-payer advocates, most notably that they can control costs without reducing benefits.

And when it comes to his own solutions, I found them to be very sensible (although I think he deliberately keeps them general). For example, he proposes keeping the government involved in funding health care, but ONLY for the poor and chronically ill (unlike in its current form where it also funds the elderly rich). This idea is so sensible - and seems to appeal to those on both sides of the aisle - that I'm surprised we haven't already done it.

All in all, well worth the read. Even if you generally don't like libertarian solutions to today's problems, I think you'll find Kling's book very easy to read, with far less ideology than in most other books on anything as controversial as health care.

"Crisis of Abundance" should be read by any educated person who wants to understand the healthcare crisis in the U.S. and proposals to remedy it. This short, intelligent book reviews the various theories in play to explain why the U.S. spends so much more (as a percentage of GDP) on healthcare than other developed nations; looks at the "awkward facts" facing each theory; describes the trade-offs that any system for healthcare spending cannot avoid; and presents realistic policy considerations for improvement.

Even if you normally don't read "public policy" books, you should make time for this one. It will give you a solid foundation for evaluating what politicians and pundits say about the healthcare crisis and all the different fixes, both good and bad, that will be offered for your support.

For this reader, "Crisis of Abundance" by Arnold Kling was difficult to read. Fortunately, it is very short, under 100 pages. In the end, it was well worth my brief persistence.

Anyone who wants to understand the healthcare crisis in the U.S. would benefit by reading this. The author is an economist, and the book is clearly told from an economic and public policy perspective. His goal was to write this book for the "concerned citizen," while at the same time making it credible to professional economists (p. ix). I rank this book lower than most other reviews because I believe the author partially fails in his attempt to write this book clearly for the concerned citizen.

He makes the point that what ails our national health care system is what he calls "premium medicine" -- or health care spending whose cost exceeds its benefit. He defines "premium medicine" as: "frequent referrals to specialists; extensive use of high-tech diagnostic procedures; and increased numbers and variety of surgeries" (p. 4). "If our high levels of health care spending are the result of so-called premium medicine, we should be demonstrably healthier. Yet when we attempt to examine average longevity at a national level, there seems to be no connection between American's high levels of health care spending and life span." (p. 25)

I found the book most difficult when the author was presenting policy issues. Kling states that his goal is "not to offer a package of solutions. It is to raise the level of understanding of the realities, issues and tradeoffs pertaining to health care policy" (p. 95). Here, for this reader, he succeeded. I now have a far better grasp of why the U.S. spends so much more on health care than other developed nations.

Kling is a libertarian, as is my husband, and that is how the book ended up in my hands. Generally I don't like libertarian solutions to current problems, but I found this book far less ideologic than others my husband has shared with me.

The book has piqued my interest, and I will no doubt read more on this topic in the future. Personally, I would love to find a book on this topic that also takes the environmental costs (see for example, "Plan B 2.0" by Lester Brown) of "premium medicine" into consideration when discussing the cost-benefit equations. Now that would be challenging and controversial!

This is a very easy to read book, but contains a wealth of subtle thinking about what's really going on with healthcare. The debate about healthcare is complicated. The underlying economic issues are perhaps less complicated. In fact, there is a little bit of "Emperor has no clothes" aspect of this book in revealing what is really going on. There is a lot of wishful and magical thinking going on in the healthcare debate and you shouldn't read this book if you want to hang on to your illusions about healthcare. Of all the stuff being written on healthcare today, I predict this book will hold up very well and look prescient in ten years.

I read this book in late 2010 - after the passage of Obamacare. The book is clearly written and helped me understand the issues driving health care costs up. The book is as relevant today as when it was published and I can recommend it to anyone wanting to understand this emotionally charged subject.

I have read several books on the US health care "crisis" in the last six months. Crisis of Abundance is by far the most valuable. The book is a quick read, but lays out a very useful framework for thinking about how we got to the current situation and the tradeoffs to consider in changing health care finance. The insight that private health insurance is not really insurance is particularly informative.

Anyone who is interested in the health care debate should read this.

Crisis Of Abundance: Rethinking How We Pay For Health Care by professional economist Arnold Kling is an in-depth and informative study of the American health care system and the troubling attributes which, when analyzed, require change if a worsening national crisis in health care is to be avoided. Offering a series of observational-based descriptive analysis as to current health care system stresses, Crisis Of Abundance presents a solid argument stating that not everybody requires extensive health care. Crisis Of Abundance is to be given high praise and very strongly recommended for its iconoclastic yet informative presentation of critically important issues surrounding the present and deepening crisis in American health care, as well as the cultural and political issues affecting attempts at reform.

Probably one of he best critiques of what ails the US healthcare system today. So-called health "insurance" isn't insurance. What is insurable about the risk that I will visit my doctor for an annual physical or my dentist for a cleaning? Why shouldn't I pay these out of pocket and use insurance to pay for what I can't pay out of pocket -- a catastrophic health incident? We get really interested in what we pay for out of our own pockets, but it has to be more than a co-pay or low deducible.

Like Social Security, people are not given an incentive to save for the healthcare needs of old age and Kling recommends a tax-exempt account which, if started at age 30 with annual contributions of $1600 and 3% real interst, would accumulate to $100,000 by age 65. At that time the owner would buy a "rest of life" insurance policy for a $25,000 premium with a $75,000 deductible. Medicare is phased out gradually. Make sense? That's why you'll never seen a politician support it. They can only think in terms of government run programs -- the same government that gave us postal "service", Medicare, and a social security programs whose paltry returns would get a commercial annuity manager fired or jailed for pocketing contributions net of payments instead of paying them to a decedent's estate.

This is a great book to read in an election year when everyone has a solution to healthcare in America.

This is the best source for understanding the health care I have come across. The book does a great job exploring the complexities of the health care problem and the inevitable trade off we will face in making changes to the current system. Kling explains how basically there are 3 conflicting goals for health care finance: affordability for society as a whole, unfettered access for individuals, and insulation of individuals from the cost of their health care. It is impossible to achieve all three goals at once, as many schemes promise to do. Kling believes the best solution is to abandon the 3rd goal, insulating consumers from direct costs. Kling offers some models of long term, high deductible insurance policies which would be capable of insuring most people at reasonable costs. However, such a system would require significant regulatory and tax policy changes, and would probably be politically unpopular. The book contains some great analysis I have not seen anywhere else. I was surprised to learn that in many universal systems people consumers actually pay slightly more direct health care expenses than in the United States. Kling points to this insulation from costs as a major reason regular market forces cannot operate and health care spending continues to grow unchecked. I would recommend this book to anyone vaguely interested in the health care debate. It's just under 100 pages but packs in an incredible amount of learning.

In an effort to get up to speed on healthcare economics, I purchase Victor Fuchs' Who Shall Live?: Health, Economics, and Social Choice (Economic Ideas Leading to the 21st Century , Vol 3) and Arnold Kling's _Crisis of Abundance_ together in hopes of obtaining a balanced view of the subject. I was not disappointed in either book.

Fuchs' book was originally published in 1975, but now contains new material added in the wake of the Clinton era attempt at creating universal health care. Regardless, the original material is just as valid now as then. Fuchs outlines the roles of patients, doctors, hospitals, drugs, and financing in contributing to the costs of health care. It is written by an accomplished health care economist, but for the laymen, so mathematics does not show up frequently. In clear terms, Fuchs goes through a number of standard arguments, providing data to back up the arguments that show that some standard arguments are correct and some are wrong. After reading this, the most rabid pro-universal health care enthusiast should have their expectations tempered. I don't know if the most rabid enthusiast against universal health care will be won over by his arguments in favor of some type of system. Yes, he is in favor of something; though it is not clear that he would support any of the current proposals, it seems very clear that he is against some of the arguments used to support those proposals.

Kling's book was written much more recently. Kling's approach requires a great deal more understanding by his audience of some of the mathematical and economic arguments offered. Kling offers more specifics in the way of policy proposals, but I'm not sure how realistic they are.

One thing that both men seem to agree on is that the current system is far to prone to apply too much expensive technology for too little return. We are nearly to the point where doctors will order an MRI scan for a hangnail on the basis that we don't want to overlook something (and besides, "someone else" is paying for it). Insurance against catastrophic, unexpected, high expenses has given way to a system in which everyone wants insurance to pay for band-aids for their boo-boos. Doctors are unusually resistant to scientific management (including standard practices and checklists) and more likely to "go with their gut", follow tradition, or make moral cases for heroic efforts for every case no matter how slight the effect on outcome. Because of this, there is as much variation in costs and life expectancy between regions in the US as there is between the US and European countries (and there is as much difference in infant mortality and life expectancy between income groups in Great Britain as in the US). So both seem skeptical about the influence of finance or maintaining a commitment to insulating the average person from cost, both seem to emphasize that we should concentrate more on helping the very poor and very sick, and both seem to think that a health care plan should include some commitment to a research body that endorses (not mandates) standard approaches to diagnosis. I was surprised that neither put any emphasis on tort reform.

I enjoyed both books and found something to think about in each, but if I had to pick one to recommend to people to come up to speed on the issue, it would be the Fuchs book.