Customer Reviews

Your Money or Your Life: Strong Medicine for America's Health Care System

5 star:		(4)
4 star:		(2)
3 star:		(2)
2 star:		(1)
1 star:		(0)

 

 

This book is probably an important addition to the literature on healthcare economics. It offers a good corrective to the politics out there. It reminds us that healthcare spending is not wasted spending, in the sense that it almost always adds value. It also points out that in many ways the costs of healthcare are FALLING.

The real question is how can we continue to improve the value of our healthcare dollar? Cutler concurs with many conservative healthcare analysts that the real problem is that the incentives in the American healthcare system are wrong. The incentives are aligned in favor of healthcare interventions rather than health. He proposes to address this incentive problem by having the government intervene in the market by providing the right incentives. In essence, the government would post-hoc realign the incentives by rewarding quality after-the-fact and beyond fees for services. In addition, he would subsidize insurance to create universal coverage.

This is an interesting idea. At the very least, it makes the important observations that the current system is rife with market failures due to the government-imposed structure of the market.

He does not seriously investigate other options. Both single-payer and conservative proposals are rejected with a single paragraph each. This probably misses some significant arguments from each. My sense is that he only sees one kind of market failure when there are at least two. The first problem has to do with incentives, which he sees.

The second problem has to do with information that is not efficiently used. Many of the conservative thinkers on this have argued that IT ought to provide significant cost-savings. In essence, 13% of our economy is still operating without the information processing that has revolutionalized the information economy.

since nothing is perfect.

Authoritative, clearly written, and quite interesting; I recommend to anyone -- professionals, academics, laypersons -- interested in these issues.

Specifics:
1) The first 5 chapters convincingly argue that the enormous increases in health care spending are first attributable to new technology and treatments, and well justified, benefits substantially exceed the costs. The arguments are based in substantial part on Cutler's own academic research. By themselves, these chapters are sufficient to justify the book. Cutler does a good job of explaining both the technical economic concepts and the medical issues, and I suspect anyone interested in the topic will find the chapters fascinating, eye-opening.

He reaches a very important conclusion: we ought to spend MORE, not less.

2) Subsequent chapters survey sources of waste and problems of distribution. I found these helpful in outlining some important problems, and well worth reading, but incomplete (see below). In part these explore the incentives created by different systems of paying for health care; this helps explain why some sorts of technologies and procedures are favored over others in any particular case.

3) The concluding chapter contains his solution to the problems, a system of universal insurance (mostly private) coverage, subsidized and supervised by the federal gov't; worth reading, but inadequate. Cutler focuses on a subset of problems & proposes a solution, with little consideration for other problems or possible solutions.

For example, he ignores 'public choice' issues: how would his proposal work in a world of self-interested government official, bureaucrats, insurers, medical professionals, patients, etc.? The system he proposes might work on paper, but is quite susceptible to "gaming." USDA crop insurance is a real world example, and its poor performance should make us hesitant to expand this approach to health care.

Similarly, Cutler argues that gov't and insurers should develop a payment system that rewards providers for measurable health improvements. Cutler greatly underestimates the difficulty. Soviet planners wrestled this problem for 75 years and were unable to solve it, how to specify a set of desired production outcomes from above and then have them realized as one envisions. It's a very difficult problem, I think unsolvable. Cutler underestimates it, and devotes essentially no attention to possible solutions which would make the individual consumer directly responsible for payment, and evaluation, of health care services.

4) Cutler provides a lengthy set of citations from the scholarly literature, excellent for further study. He also features, on his website, a technical appendix. It's clear he's trying to spread light, not heat, in the health care debate. Good on him!

5) Despite any weaknesses, Cutler does a fine job of framing the issues. The book is accessible and a good read. OK, OK, 4.9 stars.

C.N. Steele Ph.D.

Forty million Americans lack health care insurance and costs leap three and four times the inflation rate yet few Americans feel the system provides adequate care. Harvard economics professor and health-care expert Dr. David M. Cutler believes that the problem lies with the inability for most people to understand opportunity costs based on choices that may not lead to an improved life quality. The government and medical leadership exacerbate the problem with saving money as their solution, ignoring effectiveness. He makes a strong case on how much health care has dramatically improved over the past five decades as dramatized by longer productive life spans. Dr. Cutler believes that more money should be spent on further medical advances and that universal coverage for all needs should be implemented so that the present day uninsured can afford care rather than drain at a more costly rate the system. The key is to change from a system that economically encourages doctors to choose techniques that are not always the best for the patient factoring in cost and life quality to a system that reimburses doctors for quality service (not as hard as it first sounds).

Though at times the medical supply and demand is difficult to grasp, YOUR MONEY OR YOUR LIFE makes a powerful well written argument to reengineer a system in which political band aids fail everyone. The case for quality and the explanation of choices are well done and surprisingly easy to follow while offering a seemingly radical but compellingly logical approach to fixing the broken American health system.

Harriet Klausner

First, a disclaimer: Professor Cutler was on my dissertation committee, so I am certainly biased in his favor.

Your Money or Your Life does an outstanding job of taking important work from the economics literature and translating it for the intelligent lay audience. I have found it a very useful text for various health economics courses from the firstyear undergraduate level to the masters level.

The book has two main strengths:
(1) it lays out, succinctly and readably, how economists think about the value of health care, and uses those tools to evaluate health care advances. The first half of the book does a wonderful job of reframing health care reform away from "how can we keep costs down?" and into "how can we get value for our money?"
(2) it discusses, again succinctly and readably, the role that incentives play in delivering health care. Cutler argues strongly that we get what we pay for--that is, if we pay doctors more for intensive care, what we get is more intensive care, which isn't identical to higher quality care.

The book's strengths are thus in framing the health care discussion. Some reviewers are criticizing the book for not dealing with various other crucial issues in health care. The book's goal is not to serve as a comprehensive textbook on health economics; such books exist, but this isn't one of them.

Readers who disagree with the short section on proposed solutions would still, I think, benefit from Professor Cutler's excellent discussion of the problems.

The reader may find Cutler's work "Your money or Your Life" very interesting as well as provocative. The author touches upon multitude of dilemmas in the existing US health care system. One may see the health care system as a net in which interaction of players is subject to motivations, finances, laws, rules, regulations, and other variables. Finally, as an output, there is a health care system that does not work as it could.
We have a system of health care where 20, 000 people die every year because they are uninsured. Really, what can be more precious than the life of a human being? Similarly, what is more important painting by Rembrandt or a cat in a burning building? Possibly, some would choose Rembrandts' painting instead of the cat, but that would be an individual choice. Our societal chains have to be re-linked. As humans we are capable of measuring up at the societal level; our health care system needs improvement!
In his work, the author discusses history of the health care in the United States and presents the reader with real life situations and examples. The author attempts to weigh financial costs against human life value. The reader is presented with the dilemma: on one hand there is a system with intensive technologies, high costs, that is possibly beneficial to those who can afford it; on the other hand, we can have a system that works better, and is beneficial to everyone and in which prevention plays an important role.
In authors view, it was a mistake by Bush administrations to make tax cuts benefiting very wealthy. If those tax cuts were applied to the population as a whole, we could have secured health coverage for everyone for several years without raising taxes.
Healthcare services are underused or overused ("moral hazard"). The problem is not limited to the uninsured only. The author emphasizes that we need to eliminate overuse and underuse of care. Elimination of overuse saves money, and elimination of underuse saves costs.
Truly, it costs much more to amputate foot of a diabetic patient than to prevent it through prevention strategies. Insurance companies do not pay for prevention, but almost all pay for amputation. In a case with uninsured population the situation is even worse. People go without prevention, and end up with amputated limbs, and bills mounted to six digits in thousands of dollars.
In the authors' view, fundamentally, the problem is not of affordability, but of value. The health care reform needs to address the issue of value more than affordability. Having insurance does not guarantee good care. A common response to poor quality is to make it easier for people to sue insurers and providers. Would it improve the quality of care? The author states that this is not the solution to the issue. The threat of litigation creates a silo mentality when insurers are against physicians, and physicians are against each other.
The author states that increased insurance coverage does require government action; and the only solution is to devote more resources to government medical care programs over time. The author thinks that the role of government shall be expanded in order to meet the burden of medical care.
There are other alternatives for universal health coverage such as for example single payer system, but in the authors view, these alternatives are to a degree inferior. The common belief is that competition of private insurance system is superior to government provision. The author states that firms compete with each other seeking quality improvement and cost decrease. At the same time, it is debatable whether private insurance entities have quality improvement as one of the priorities. Competition does not guarantee quality of health care, but definitely, all insurance entities are seeking the ways that would allow minimization of costs. Also, private insurance involves higher administrative costs. The author thinks that payments can be adjusted basing on health risk of employees in order to reduce adverse selection.
In my view, this is an unfair form of differentiation/discrimination basing on one's health status. It does not solve the issue of social injustice in the health care system. This type of reform will not generate better outcomes as the author states. Still, sick and poor will be lagging behind. Health care is a basic need. It is a basic right of every human being in the society. This is not the proper way of re-linking societal chains in the health care system. Medicare for all is needed for true health care reform!
The recent passage of the healthcare law did not eliminate the problem. Millions of people still will have to buy commercial health insurance policies, which will cover roughly seventy percent of their medical expenses. People will still have to pay deductibles and co-pays. Millions of people will remain uninsured. Their access to care still will be limited and care delayed. While this is happening, health insurance companies will be making a profit from millions of people who will have to buy health insurance. The insurance companies will become even more influential financially and politically after they receive money from taxpayers. They will have more power to block future reforms.
In order to eliminate the problem, we need one-payer system. We need Medicare for all. We need the system in which the government collects healthcare fees and pays out the costs. Under healthcare for all model, all citizens would be able to receive the healthcare they need. Healthcare shall be based on one's needs, and not an ability to pay!

Well researched and well documented with over 25 pages of endnotes, this book is a hybrid: wonderfully readable yet academically sound. As a health economist and member of the prestigious Institute of Medicine, Cutler offers a scintillating, objective economic analysis of our existing health care system, exposing the embarrassing inadequacies and problems while also highlighting its successes. He also offers sage guidance for a better health care future: increasing the value of our health care system primarily by aligning incentives with desirable outcomes. Many but not all of his ideas are reflected in the Accountable Care Act. If every policy maker had read this book with an open mind, we would have been spared much of the political drama surrounding the enactment of the Affordable Care Act, as well as the post-enactment machinations to undo it. To pick nits, Cutler's view that just about everyone believes that everyone should have health insurance is not supported by the facts. If that were the case, we would have had comprehensive health reform many decades ago and few if any would be trying to repeal, nullify, or starve the Accountable Care Act. Also, his lumping regulation along with litigation as necessarily punitive suggests a rather limited view of regulation. Overall, though, this book is superb, a "must read" for everyone who cares about health care and the health of their fellow Americans.

The content is interesting but if you are reading it on your Kindle and hoping to be able to jump to one of the references and return to your place in the text, then forget it. The publishers could have but didn't hyperlink the references within the text. If you just want to read the book from cover to cover then it's fine.

The first part of the book is probably informative for a novice reader on the topic, but hardly original. There are many other sources about how medical care has improved over the years due to surgical techniques, diagnostics, and drug therapies. There are many other sources about some of the economic aspects, like fee-for-service and HMOs. He skips the part about government intrusion.

When the author gets around to advocacy, his politics shows. His "strong medicine" is more government controls by politicians and bureaucrats. He is apparently blind to the consequences, which have put America's health care system in its current state. Those with political power and influence, including the AMA, general hospitals and huge "nonprofit" insurers, control the system in their way.

He says the present system lacks incentives for quality of care. Yet he offers no workable solutions that would survive political infighting, not be manipulable, or how much more they would cost. He advocates pay-for-performance, which in the hands of bureaucrats becomes pay-for-conformance. Private insurers have experimented with it for several years, with no clear results.

He says little about consumer choice. You can easily guess the author's politics and outlook. He is a Harvard econ professor, worked on the HillaryCare plan -- a fiasco -- and is now a health care advisor to Barack Obama. Technocrats are bent on rationing. They lack innovative medical knowledge and skills. The rules they want stifle innovation and individual consumer choice. Consumers are treated like numbers or cattle.

While I found Dr Cutler's analysis penetrating, I was disappointed that he did not discuss in any detail the large impact on medical costs of medical malpractice lawsuits. Not only do these lawsuits increase malpractice insurance premiums of physicians and health insurance premiums of patients, they lead to wasteful defensive medicine, as physicians do unnecessary tests and procedures in order to reduce the risk of malpractice suits. Tort reform is essential to control rising medical costs.