Revised and reconsidered: two contemporary looks at the economics of healthcare.
Article Type: Book review
Subject: Books (Book reviews)
Author: Levine, Helisse
Pub Date: 09/22/2010
Publication: Name: Journal of Health and Human Services Administration Publisher: Southern Public Administration Education Foundation, Inc. Audience: Academic Format: Magazine/Journal Subject: Government; Health Copyright: COPYRIGHT 2010 Southern Public Administration Education Foundation, Inc. ISSN: 1079-3739
Issue: Date: Fall, 2010 Source Volume: 33 Source Issue: 2
Topic: NamedWork: Economics for Healthcare Managers, 2d ed. (Nonfiction work); The Economics of Health Reconsidered, 3d ed. (Nonfiction work)
Persons: Reviewee: Lee, Robert H.; Rice, Thomas; Unruh, Lynn
Accession Number: 250033477
Full Text: Robert H. Lee, Ph.D. (2009). Economics for Healthcare Managers (2nd).

ISBN 13: 978-1-56793-314-7

Hardbound, 264 pp, 2009

Imprint: AUPHA/HAP Book

Order code: WWW1-2127

Price: $85.00

Thomas Rice, Ph.D. and Lynn Unruh, Ph.D., RN (2009).

The Economics of Health Reconsidered (3rd).

ISBN 13: 978-1-56793-328-4

Hardbound, 450 pp, August 2009

Imprint: AUPHA/HAP Book

Order code: WWW1-2133

Price: $94.00

According to the Census Bureau (DeNavas-Walt, Proctor & Smith, 2009) the number of uninsured increased to 46.3 million in 2008, from 45.7 million in 2007. Coupled with the country's unprecedented spending on national health estimated to reach $4 trillion, or nearly 20 per cent of GDP by 2017 (Centers for Medicare and Medicaid Services) understanding how consumers, suppliers, and insurers make decisions about health and health care in the context of changing and contemporary market (and non-market) forces will be essential to the practitioner, manager, policy maker, academic and student of the economics of health.

The economics of healthcare is both "reconsidered" and "revised" in two texts recently published by Health Administrative Press, providing the resources to address these and other issues in healthcare. Dr. Robert H. Lee, Associate Professor of the School of Medicine of the University of Kansas presents Economics for Healthcare Managers, an updated, second edition to his first text written nearly a decade ago. The book's central thesis is to provide healthcare managers with the tools of introductory economic analysis to perform important decision making tasks. Following an overview of the Healthcare System and Healthcare Financing Systems in chapters two and three, respectively, the book proceeds with basic principles of microeconomics applied to healthcare including costs considerations, demand (and elasticity) for healthcare products, forecasting techniques, supply and demand analysis, profit maximization, pricing models, market power (e.g. markups and collusion), government intervention and regulation.

To the professor of health economics, this book features valuable teaching aids for syllabus development and course planning. Clearly stated learning objectives and key concepts introduce each chapter; homework exercises and glossaries conclude each of the seventeen chapters. Each chapter is approximately 20 pages, suitable to fit a 14 week semester. To the student of health economics, case studies and web-based resources enhance interest and overall learning. Most notable is that each chapter contains a number of current references, putting this text in a class of its own among the many outdated health economics textbooks presently on the market. Although the forecasting chapter, new to this edition, affords the student a value added measure of "business" decisions, students who do not have at least a basic understanding of statistics will be limited to a cursory understanding of the forecasting methodologies presented in this chapter, such as percentage adjustment, regression analysis, and moving average method. Missing from the book is a review of basic economic concepts. Written for students with minimal or no background in economics, there is arguably enough economic application that warrants an appendix or introductory chapter to review (or introduce) standard tools of economics. As a stand-alone text in healthcare economics, or an ancillary to health care finance, the book provides the right balance between economic theory and mathematics for a first course in healthcare economics. Excellent instructor ancillaries including power points and instructor's manual are available for this text through Health Administrative Press at

Offering another approach, just as valuable to the academic and practitioner communities, is the third edition to The Economics of Health Reconsidered, revised by Dr. Thomas Rice, professor at the UCLA School of Public Health, co-authored with Dr. Lynn Unruh, associate professor in the Department of Health Management and Informatics at the University of Central Florida (who is also a registered nurse).

The central purpose of this book is to reconsider the economics of health by "examining the assumptions on which the superiority of competitive approaches is based, and how failure to meet those assumptions affects health policy choices" (2009, p. 5). This is both a refreshing and effective approach of combining economic theory and positive (vs. normative) analysis to the health care service sector. While classical economic theory places market forces at the heart of analysis, the conventional starting point for most health economics textbook, these authors offer a different and unique model for the healthcare economist. After a brief introductory chapter, 39 pages review traditional economic theory framed in the competitive model using basic mathematical tools. Topics include consumer theory including optimization, derivation of income and substitution effects, and elasticity.

Next, producer theory sets the framework for market structure followed by profit maximization analysis. This chapter is well defined and most important given that a student's ability to apply the principles of microeconomic theory to the healthcare sector rests on his or her successful understanding of microeconomic principles. Before proceeding to the individual components of healthcare economics, chapter three entitled, The Assumptions Underlying the Competitive Model and the Role of Government, marks the greatest strength of this book; the message that "markets solutions seem more effective than they actually are in solving key social problems in healthcare" (Rice & Unruh, 2009, p. 53). From that point forward, each chapter is delineated by the basic elements of economics (e.g. demand, supply and profit analysis) within the heath care setting.

The market for physicians in Chapter 8 (labor economics) is new to this third edition. Chapter 9, entitled, Equity and Redistribution goes beyond the traditional "efficiency" measure in economics to discuss topical issues related to equity and the redistribution of wealth, namely, the national health insurance debate. The final chapter and accompanying appendix present a useful comparative analysis of healthcare systems in developed countries.

The book includes eleven richly written chapters in 475 pages. Drs. Tice and Unruh have successfully written a realistic economics textbook for students with at least a minimum background in economics. However, the authors' inclusion of a more than thorough review of basic economic theory and mathematical tools at the onset of the text should be enough educational material for the novice economic student and professor of introductory Health Economics to adopt this text for classroom use - as a standalone text or supplement reading to courses in healthcare economics, finance, management or health policy. Users of this text would benefit greatly from the addition of chapter objectives and/or outcomes. There are neither homework questions nor vocabulary guides to assist student learning, with the exception of end of chapter summaries. An instructor's manual is available for this text through Health Administration Press.

With the healthcare sector at a crossroads, and a glimpse of possible reform looming in the not too distant horizon, two contemporary looks at the economics of healthcare are now available to students and professors of health economics; one revised and the other, reconsidered.


Centers for Medicare and Medicaid Services. National Health Expenditure Data . REtireved November 18, 2009 from

DeNavas-Walt, C., Proctor, B. & Smith, J. (2009). U.S. Census Bureau, Current Population Reports, P60236, Income, Poverty, and Health Insurance Coverage in the United States: 2008, U.S. Government Printing Office, Washington, DC (

Rice, T. & Unruh, L. (2009) The Economics of Health Reconsidered (3rd). Health Administration Press

Helisse Levine

Long Island University
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