Crisis of Abundance: Rethinking How We Pay for Health Care

April 26, 2006

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America’s health care troubles largely stem from a great success: modern medicine can do much more today than it could in the past.  So, what’s the trouble?  How to pay for it.

In Crisis of Abundance: Rethinking How We Pay for Health Care, economist Arnold Kling argues that the way we finance health care matches neither the needs of patients nor the way medicine is practiced.  The availability of “premium medicine,” combined with patients who are insulated from costs, means Americans are not getting maximum value per dollar spent. 

Using basic economic concepts, Kling demonstrates that a greater reliance on private saving and market innovation would eliminate waste, contain health care costs and improve the quality of care.

Kling proposes gradually shifting responsibility for health care for the elderly away from taxpayers and back to the individual.

“The idea of matching the health care funding system to needs is very simple,” Kling writes.  “The very poor and the very sick need help paying for health care.  The rest of us do not.”

Kling proposes reducing government’s responsibilities from 40 percent to 13 percent of health care spending, and increasing out-of-pocket payments from 19 percent to 56 percent of health spending.

NYU law professor Daniel Shaviro calls Crisis of Abundance “a lucid and persuasive book—one of the most accessible guides I have ever seen.” The influential blogger MedPundit (Sydney Smith) writes that Kling “pinpoints precisely where our health care spending has gone wrong…Kling does more than offer criticisms—he offers solutions.” 

Tyler Cowen, professor of economics at George Mason University, simply exclaims, “This is one of the most important books written on health care.”

About the Author
 
Arnold Kling is a former economist for the Federal Reserve Board and later for Freddie Mac.  He is an adjunct scholar at George Mason University in Washington, DC and is also a contributing editor for TCSdaily.com. Kling is author of two previous books: Under the Radar and Learning Economics.

About the Book
 
Crisis of Abundance: Rethinking How We Pay for Health Care
by Arnold Kling
$16.95 hardback; 120 pages
ISBN: 1-930865-89-9
Publication date: April 26, 2006