David Dranove is the Walter McNerney Distinguished Professor of Health Industry Management and Professor of Management and Strategy at Northwestern University's Kellogg Graduate School of Management. He recently authored "How Hospitals Survived", with William D. White, and is coauthor of "The Economics of Strategy", a popular business strategy textbook.Correction: On pages 114 and 172, the book incorrectly states that Oxford Health Plan went bankrupt due to poor accounting. In fact, Oxford suffered from problematic revenue collection. It staved off bankruptcy and returned to profitability.

"[Dranove] offers important insight into a complicated and critically important sector of our society."--Booklist "[Dranove] raises interesting points on the benefits of managed care but does not hesitate to point out where MCOs can go wrong. While the book emphasizes the business aspect of healthcare, an economics degree is not necessary to understand the principles that are illustrated."--Library Journal "When you ask people why they don't like managed care, they usually don't give clear answers ... But most people haven't had particularly bad experiences themselves ... So it's been hard for most of us to know just how managed health care really does stack up ... It's no longer so hard, thanks to The Economic Evolution of American Health Care, by David Dranove... A wealth of information."--David R. Henderson, The Wall Street Journal "Although everyone will not agree with the author's theories and conclusions, he offers important insight into a complicated and critically important sector of our society."--Booklist "Many governments are actively considering market-based solutions to health care inflation. My message to them is simple: before you try to emulate much of what we have done, read David Dranove."--Jerome P. Kassirer, Canadian Medical Association Journal "David Dranove acknowledges many of the problems of contemporary managed care but argues that, properly structured, it would be a very good idea."--Lawrence P. Casalino, New England Journal of Medicine "An excellent book that makes accessible a great deal of interesting and relevant research... It reviews a remarkable list of important policy issues in a very short space and provides sharp economic insight into each of them. Even more, it is written in clear, non-technical language... I recommend it highly."--Alain C. Enthoven, Healthplan "The Economic Evolution of American Health Care delivers a great deal of new and valuable information in a crisp, very readable style. It is an excellent primer on the state of the US health care industry and on the economics of competition in health care."--Sherry Glied, Health Economics

• Acknowledgments vii Introduction 3 Part One: The Rise of Managed Care 5 Chapter 1. Marcus Welby Medicine 7 Chapter 2. The Origins of Managed Care 28 Chapter 3. The Government Steps In 45 Chapter 4. Managed Care Takes Over 65 Part Two: The Modern Health Economy 91 Chapter 5. The Business of Health Care 93 Chapter 6. Merger mania 115 Chapter 7. Quality 136 Chapter 8. Fulfilling the Promise of managed Care 159 Notes 177 Bibliography 193 Index 203

David Dranove is the Walter McNerney Distinguished Professor of Health Industry Management and Professor of Management and Strategy at Northwestern University's Kellogg Graduate School of Management. He recently authored "How Hospitals Survived", with William D. White, and is coauthor of "The Economics of Strategy", a popular business strategy textbook.Correction: On pages 114 and 172, the book incorrectly states that Oxford Health Plan went bankrupt due to poor accounting. In fact, Oxford suffered from problematic revenue collection. It staved off bankruptcy and returned to profitability.

"[Dranove] offers important insight into a complicated and critically important sector of our society."--Booklist "[Dranove] raises interesting points on the benefits of managed care but does not hesitate to point out where MCOs can go wrong. While the book emphasizes the business aspect of healthcare, an economics degree is not necessary to understand the principles that are illustrated."--Library Journal "When you ask people why they don't like managed care, they usually don't give clear answers ... But most people haven't had particularly bad experiences themselves ... So it's been hard for most of us to know just how managed health care really does stack up ... It's no longer so hard, thanks to The Economic Evolution of American Health Care, by David Dranove... A wealth of information."--David R. Henderson, The Wall Street Journal "Although everyone will not agree with the author's theories and conclusions, he offers important insight into a complicated and critically important sector of our society."--Booklist "Many governments are actively considering market-based solutions to health care inflation. My message to them is simple: before you try to emulate much of what we have done, read David Dranove."--Jerome P. Kassirer, Canadian Medical Association Journal "David Dranove acknowledges many of the problems of contemporary managed care but argues that, properly structured, it would be a very good idea."--Lawrence P. Casalino, New England Journal of Medicine "An excellent book that makes accessible a great deal of interesting and relevant research... It reviews a remarkable list of important policy issues in a very short space and provides sharp economic insight into each of them. Even more, it is written in clear, non-technical language... I recommend it highly."--Alain C. Enthoven, Healthplan "The Economic Evolution of American Health Care delivers a great deal of new and valuable information in a crisp, very readable style. It is an excellent primer on the state of the US health care industry and on the economics of competition in health care."--Sherry Glied, Health Economics

• Acknowledgments vii Introduction 3 Part One: The Rise of Managed Care 5 Chapter 1. Marcus Welby Medicine 7 Chapter 2. The Origins of Managed Care 28 Chapter 3. The Government Steps In 45 Chapter 4. Managed Care Takes Over 65 Part Two: The Modern Health Economy 91 Chapter 5. The Business of Health Care 93 Chapter 6. Merger mania 115 Chapter 7. Quality 136 Chapter 8. Fulfilling the Promise of managed Care 159 Notes 177 Bibliography 193 Index 203

David Dranove is the Walter McNerney Distinguished Professor of Health Industry Management and Professor of Management and Strategy at Northwestern University's Kellogg Graduate School of Management. He recently authored "How Hospitals Survived", with William D. White, and is coauthor of "The Economics of Strategy", a popular business strategy textbook.Correction: On pages 114 and 172, the book incorrectly states that Oxford Health Plan went bankrupt due to poor accounting. In fact, Oxford suffered from problematic revenue collection. It staved off bankruptcy and returned to profitability.

"[Dranove] offers important insight into a complicated and critically important sector of our society."--Booklist "[Dranove] raises interesting points on the benefits of managed care but does not hesitate to point out where MCOs can go wrong. While the book emphasizes the business aspect of healthcare, an economics degree is not necessary to understand the principles that are illustrated."--Library Journal "When you ask people why they don't like managed care, they usually don't give clear answers ... But most people haven't had particularly bad experiences themselves ... So it's been hard for most of us to know just how managed health care really does stack up ... It's no longer so hard, thanks to The Economic Evolution of American Health Care, by David Dranove... A wealth of information."--David R. Henderson, The Wall Street Journal "Although everyone will not agree with the author's theories and conclusions, he offers important insight into a complicated and critically important sector of our society."--Booklist "Many governments are actively considering market-based solutions to health care inflation. My message to them is simple: before you try to emulate much of what we have done, read David Dranove."--Jerome P. Kassirer, Canadian Medical Association Journal "David Dranove acknowledges many of the problems of contemporary managed care but argues that, properly structured, it would be a very good idea."--Lawrence P. Casalino, New England Journal of Medicine "An excellent book that makes accessible a great deal of interesting and relevant research... It reviews a remarkable list of important policy issues in a very short space and provides sharp economic insight into each of them. Even more, it is written in clear, non-technical language... I recommend it highly."--Alain C. Enthoven, Healthplan "The Economic Evolution of American Health Care delivers a great deal of new and valuable information in a crisp, very readable style. It is an excellent primer on the state of the US health care industry and on the economics of competition in health care."--Sherry Glied, Health Economics

• Acknowledgments vii Introduction 3 Part One: The Rise of Managed Care 5 Chapter 1. Marcus Welby Medicine 7 Chapter 2. The Origins of Managed Care 28 Chapter 3. The Government Steps In 45 Chapter 4. Managed Care Takes Over 65 Part Two: The Modern Health Economy 91 Chapter 5. The Business of Health Care 93 Chapter 6. Merger mania 115 Chapter 7. Quality 136 Chapter 8. Fulfilling the Promise of managed Care 159 Notes 177 Bibliography 193 Index 203