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Code Red:
An Economist Explains How to Revive the Healthcare System without Destroying It
David Dranove

Hardcover | 2008 | $29.95 | £24.95 | ISBN: 9780691129419
296 pp. | 6 x 9 1/4 | 1 halftone. 11 tables.
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Correction to Page 4. "The $2 billion American healthcare system is in critical condition" should read, "The $2 trillion American healthcare system is in critical condition."

The U.S. healthcare system is in critical condition--but this should come as a surprise to no one. Yet until now the solutions proposed have been unworkable, pie-in-the-sky plans that have had little chance of becoming law and even less of succeeding. In Code Red, David Dranove, one of the nation's leading experts on the economics of healthcare, proposes a set of feasible solutions that address access, efficiency, and quality.

Dranove offers pragmatic remedies, some of them controversial, all of them crucially needed to restore the system to vitality. He pays special attention to the plight of the uninsured, and proposes a new direction that promises to make premier healthcare for all Americans a national reality. Setting his story against the backdrop of healthcare in the United States from the early twentieth century to the present day, he reveals why a century of private and public sector efforts to reform the ailing system have largely failed. He draws on insights from economics to diagnose the root causes of rising costs and diminishing access to quality care, such as inadequate information, perverse incentives, and malfunctioning insurance markets. Dranove describes the ongoing efforts to revive the system--including the rise of consumerism, the quality movement, and initiatives to expand access--and argues that these efforts are doomed to fail without more fundamental, systemic, market-based reforms. Code Red lays the foundation for a thriving healthcare system and is indispensable for anyone trying to make sense of the thorny issues of healthcare reform.


"Code Red is one of the two or three best books on the economics of health care. It is especially strong on how the current mess evolved historically and what has been tried (or not tried) along the way. This is the place to go to understand PSROs or what happened to the HMO revolution...This book won't make anyone fully happy, but it is a must for fans of health care policy."--Tyler Cowen, Marginal Revolution

"Many books and articles address improvements to the US health care system and the provision of health insurance to all citizens . . . [Dranove's] goal . . . is to review public sector efforts to deal with access, costs, and quality. . . . [I]t is well written . . . and does a good job of providing insights into the national debate. . . . In the end, having a quality system requires an efficient public-private partnership."--R. L. Jones, Pennsylvania State University, College of Medicine, for CHOICE

"With health care as a key issue in the presidential campaign, it is refreshing to read a balanced, well-reasoned essay on the ailments of our healthcare system, along with some possible remedies. Code Red is an excellent read for health care professionals and policy wonks: it is suitable for anyone interested in the debate, though it employs a modicum of vocabulary from Dranove's discipline, economics."--Michael P. Meacham, Centre Daily Times


"Just what the doctor ordered. In Code Red, David Dranove explains how the United States came to finance healthcare; critically examines proposals that are often touted as solutions to what ails the healthcare system, like quality report cards and consumer-directed healthcare; and provides his own sensible prescription for reform."--Jill Quadagno, author of One Nation, Uninsured

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Table of Contents:

Acknowledgments vii

Introduction 3
Chapter One: An Accidental Healthcare System 8
Chapter Two: Paging Doctor Welby 30
Chapter Three: Therapy for an Ailing Health Economy 58
Chapter Four: The Managed Care Prescription 83

Chapter Five: Self-Help 121
Chapter Six: The Quality Revolution 147
Chapter Seven: Mending the Safety Net 176
Chapter Eight: Reviving the American Healthcare System 205

Appendix: An Alphabet Soup of Healthcare Acronyms 235
Notes 239
Bibliography 255
Index 269

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