Lecture by Charles E. Phelps - Our own worst enemies: How we and our government created, exacerbated, and extended the health care mess

Free and open to the public.
Reception to follow.

About the lecture
Compared with any other nation, the U.S. spends far more on medical care and seemingly gets far less in return than other nations (as measured by such things as infant mortality and longevity). We also have abundant evidence that much of our spending is wasteful, in the sense that regions within the U.S. differ by a factor of two or more (for example) in Medicare spending per enrollee, with no discernible differences in health outcomes.

Professor Phelps shows how the spending problem will inevitably get worse without intervention, mostly because of two inexorable forces – an aging population and the growth of new medical technologies (which improve well-being but cost more money in general).

The most promising focus for improving this dismal prospect comes from within ourselves. Large fractions of our nation's mortality, morbidity, and health care spending result from our own behavioral choices, most notably tobacco consumption (where things are improving over time), obesity (where things are rapidly getting worse over time), and (to a lesser extent) alcohol abuse and unsafe sexual practices. Changing these health behaviors represents the most promising way to improve health outcomes and health care costs.

Professor Phelps explores several ways to change public policy to improve future outcomes and costs. These changes come in two basic areas: incentives (for providers and consumers alike) and in improvements in education (both general education and disease-specific education). Incentive-improving changes would (a) include employer-paid health insurance premiums in the income tax base, (b) having individual Medicare premiums reflect regional costs of care (rather than a national average), and (c) link health care premiums – both public and private – to life style choices of individuals, most notably tobacco use and obesity. Implementing such changes would be controversial in many ways, but even moderate success in doing so would improve the health of our population and actually lower health care costs at the same time.

Professor Phelps will also discuss the Affordable Care and provide an analysis of the legal challenges to the core structure of the ACA – the mandate that individuals buy health insurance.


About the speakerCharles E. Phelps is University Professor and Provost Emeritus at the University of Rochester. He began his research career at the RAND Corporation where he served as Senior Staff Economist and Director of the Program on Regulatory Policies and Institutions. His research included the economics of health care, U.S. petroleum price regulations, water markets in California, and environmental regulatory policy.

Phelps moved to the University of Rochester in 1984 and held appointments in the Departments of Economics and Political Science. He served as the Director of the Public Policy Analysis Program, and later became chair of the Department of Community and Preventive Medicine in the School of Medicine and Dentistry of the University of Rochester.

During his time at the University of Rochester, Professor Phelps has published over 40 peer reviewed articles covering the fields of health economics, health policy, medical decision analysis, cost-effectiveness analysis of various medical interventions, and other related topics. He also wrote a leading textbook in the field, Health Economics (Addison Wesley), now in its fourth edition (2010), and Eight Questions You Should Ask About Our Health Care System (Even if the Answers Make You Sick), Hoover Institution Press, 2010.

Professor Phelps has testified before Congressional committees on health policy (1973) and intellectual property issues (1998, 1999 and 2005) on behalf of the Association of American Universities and other higher education organizations.

He received his BA in Mathematics from Pomona College in 1965, an MBA (Hospital Administration, 1968) and PhD (Business Economics, 1973) from the University of Chicago.

For more on Professor Phelps: http://www.econ.rochester.edu/people/phelps.html


Sponsored by: the Gerald R. Ford School of Public Policy, and the Health Policy Student Association.

This event is funded by the Gilbert S. Omenn and Martha A. Darling Health Policy Fund.