The exploding cost of health care in the United States is a source of widespread alarm. Similarly, the upward spiral of college tuition fees is cause for serious concern. In this concise and illuminating book, the well-known economist William J. Baumol explores the causes of these seemingly intractable problems and offers a surprisingly simple explanation. Baumol identifies the “cost disease” as a major source of rapidly rising costs in service sectors of the economy. Once we understand that disease, he explains, effective responses become apparent.
Baumol presents his analysis with characteristic clarity, tracing the fast-rising prices of health care and education in the United States and other major industrial nations, then examining the underlying causes, which have to do with the nature of providing labor-intensive services. The news is good, Baumol reassures us, because the nature of the disease is such that society will be able to afford the rising costs.
About William J. Baumol
William J. Baumol is professor of economics and academic director of the Berkley Center for Entrepreneurship and Innovation, New York University, and professor emeritus, Princeton University. He is the author of more than forty books, has been awarded a dozen honorary degrees, and is an elected member of the National Academy of Sciences, the American Philosophical Society, Galileo’s Accademia Nazionale dei Lincei in Rome, and the British Academy. He lives in New York City.
The Case for Calm Over Rising Health Costs
The New York Times Book Review – October 6, 2012 (Excerpt)
IN 1946, a British newspaper shocked its readers by running an article with this ominous-sounding headline: “Nearly Half of U.K. Student Grades Are Below Average.” Read that back to yourself slowly, and you’ll realize, of course, that the law of averages would have it no other way. But man, does it sound bad.
In his new book,“The Cost Disease: Why Computers Get Cheaper and Health Care Doesn’t” (Yale University Press) William J. Baumol uses that headline to help us understand his central idea about the diverging paths of certain costs in our economy.
Mr. Baumol and a Princeton colleague coined the term “cost disease” in the early 1960s. Put simply, it refers to the concept that the costs of health care, education, the live performing arts and several other “personal services” depend largely on human evaluative skills — a “handicraft element” that is not easily replaced by machines. These costs consistently rise at a rate much greater than that of inflation because the quantity of labor required to produce these services is hard to reduce, while costs in other areas of the economy can be brought down via technology or other factors. [Read the full article...]
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THE BLEEDING HILLS
A Novel by Wilfried F. Voss
I have fought a good fight,
I have finished my course,
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- 2 Timothy iv. 7
The Irish War is officially a part of history, but not for Finnean Whelan, an IRA veteran of almost 40 years. British Intelligence has produced evidence that he is the mastermind behind a conspiracy to assassinate the First Minister of Northern Ireland. For Whelan this is not only a mission of revenge, but marks the beginning of a journey into the past and the return to the one true love: Ireland. [More...]
The Bleeding Hills is available at Amazon.Com, Amazon.co.uk, Barnes & Noble, and any other good bookstore.
