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Foreword

Foreword Page 829 Mark V. Pauly University of Pennsylvania Kenneth Arrow’s article made research in health economics respectable, but it did more than that. It also made it interesting. His essay was the gracious response of an already distinguished economic theorist to an invitation to write something for the Ford Foundation on the economic properties of the medical services industry. Before this article appeared in 1963, economists, even those interested in industry applications, had either steered clear of trying to understand (much less analyze) a product and an industry that appeared to depart so greatly from the competitive model, or they had written policy papers alternately justifying or condemning the differences from that model. Either perspective was largely irrelevant because medical care was “special” or because economics could be applied only to show that the guild and regulatory features of this industry were the result of a long-term conspiracy by medical providers to gain monopoly rents at the expense of efficiency and consumer welfare. Arrow’s article was and still is exciting, I believe, for two reasons: 1. It showed how some behaviors in medical markets could be brought within the purview of standard economic models of competing, maximizing agents. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Health Politics, Policy and Law Duke University Press

Foreword

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Publisher
Duke University Press
Copyright
Copyright 2001 by Duke University Press
ISSN
0361-6878
eISSN
1527-1927
DOI
10.1215/03616878-26-5-829
Publisher site
See Article on Publisher Site

Abstract

Page 829 Mark V. Pauly University of Pennsylvania Kenneth Arrow’s article made research in health economics respectable, but it did more than that. It also made it interesting. His essay was the gracious response of an already distinguished economic theorist to an invitation to write something for the Ford Foundation on the economic properties of the medical services industry. Before this article appeared in 1963, economists, even those interested in industry applications, had either steered clear of trying to understand (much less analyze) a product and an industry that appeared to depart so greatly from the competitive model, or they had written policy papers alternately justifying or condemning the differences from that model. Either perspective was largely irrelevant because medical care was “special” or because economics could be applied only to show that the guild and regulatory features of this industry were the result of a long-term conspiracy by medical providers to gain monopoly rents at the expense of efficiency and consumer welfare. Arrow’s article was and still is exciting, I believe, for two reasons: 1. It showed how some behaviors in medical markets could be brought within the purview of standard economic models of competing, maximizing agents.

Journal

Journal of Health Politics, Policy and Law – Duke University Press

Published: Oct 1, 2001

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