Health care plays a key role in every economy, through the weight of the health sector in GDP, but also by shaping the health and productivity of the workforce. In the US, this is compounded by the fact that health insurance is often covered by the employer, making it an important part of labor costs in manufacturing and other sectors of the economy. Moreover, the fact that health insurance is tied to employment can limit labor mobility, and creates a major vulnerability for the employee, since losing your job means losing your health coverage as well.
That the US health insurance framework needs to change is widely recognized. In their brand new book published by Penguin Random House, We’Ve Got You Covered, Professors Liran Einav and Amy Finkelstein (Stanford and MIT respectively) offer a compelling, clear analysis of the problem and a bold proposal for fixing it. The US health insurance system, they argue, needs to be scrapped and rebuilt anew. No set of fixes to the current setup will do, especially since the existing problems have been exacerbated by a long series of ad hoc fixes, each one causing collateral damage and unintended consequences.
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