Health Care Productivity

Alan M. Garber and

AMG

Alan M. Garber Department of Veterans Affairs and Stanford University

Martin Neil Baily

Martin Neil Baily Senior Fellow Emeritus - Economic Studies, Center on Regulation and Markets

Discussants: David M. Cutler and

David M. Cutler Otto Eckstein Professor of Applied Economics - Harvard University

Ernst R. Berndt

Ernst R. Berndt Professor in Applied Economics Emeritus - MIT Sloan School of Management

IN ALL OF THE INDUSTRIAL COUNTRIES, a high fraction of gross domestic
product (GDP), ranging from approximately 7 percent in the United
Kingdom to 14 percent in the United States, is devoted to health care.
In recent years policymakers have been forced to try to trim health care
benefits or other social services, and the health care systems of almost
all the industrial countries have come under significant pressure to
control expenditures and improve performance.
Although each nation’s health care system operates with a mixture
of regulation and market mechanisms, there are great differences among
them. And these differences suggest that policymakers could learn important
lessons by comparing performances across countries. Thus far,
however, no single system is recognized as being the most productive
or as having achieved the right blend of competition and regulation. No
system provides the paradigm for others.