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Journal of Health Politics, Policy and Law 26.5 (2001) 823-828

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Editor's Note

Kenneth Arrow and the Changing Economics of Health Care

The definition of a seminal publication probably ought to be the following: something that is frequently cited and little read. Such works often become part of the tribal customs of a particular scholarly field, handed down to succeeding generations far more through oral traditions than careful reading. In many cases that is no doubt fine, as core themes endure while the outmoded details of analysis drift away from collective memory.

But on occasion it is not fine at all. Essential insights may get lost or distorted as one author after another, unwittingly engaged in an adult version of the children's "phone game," confuses the original message. Or as a result of selective use for specific purposes, the pieces of the argument are remembered and narrowly exploited at the expense of the initial synthetic analysis. Or opportunities to judge beneficially the present against the past are missed because few seriously return to the conceptual and empirical contributions of the original essay or book. Or conventions firmly established by that publication are erroneously retained because they are never formally revisited.

Although (because?) written by an outsider, it would be hard to identify a more seminal contribution to the health policy field than Kenneth Arrow's 1963 American Economic Review article, "Uncertainty and the Welfare Economics of Medical Care." I have not done the comparative statistics, but with at least 675 citations to it by authors in a multitude of disciplines, my guess is that no other single article has entered the scholarly [End Page 823] domain of health policy as deeply, pervasively, and persistently. Young entrants into the fields of health services research and health policy probably recognize Arrow's article more than any other published four decades, three decades, two decades, or perhaps even one decade ago--even if they have not seen it with their own eyes.

In their introduction to this special issue, subtitled "Why Arrow? Why Now?," Peter J. Hammer, Deborah Haas-Wilson, and William M. Sage artfully describe just why it is so important, and so valuable, to return to Arrow's essay with a carefully aimed magnifying glass, indeed the multiple magnifying glasses honed by several disciplines. Health economics and health policy--and political--analysis in general have quite literally taken off since Arrow studied the world of medical care. The health care sector itself has experienced at least two revolutionary transformations. First, there has been a dramatic rise in government involvement even with the continued absence of an international norm of universal insurance coverage. For example, public-sector dollars now account for nearly half of all health care spending, up from one quarter in the early 1960s when Arrow was writing his article (National Health Care Expenditures 1998: Table 1). Second, with the rapid unfolding of the "managed care revolution" in the 1990s, in shorthand the health care system has been transformed from one dominated by solo practitioners and nonprofit institutions financed by indemnity insurance to a quite different set of arrangements in which group practice and commercial managed care health plans have become the norm (Peterson 1998). Despite these vast changes, the questions Arrow posed are enduring. Perhaps, too, many of his insights. Certainly the conceptual quality of his investigation furnishes a unique platform for us to reexamine those questions both in the comparative context of the current era and facilitated by expertise not only in economics, well represented to be sure in this special issue, but also in clinical practice, law, management, political science, and investigative journalism.

The citations to Arrow's 1963 article show both the reach it has achieved in scholarship and the significance of revisiting his analysis with a multidisciplinary perspective. Table 1 presents a disciplinary-based analysis of these citations. It compares the types of journals in which the referencing articles appeared for two different time periods: the first ten years following publication of Arrow's essay and the...


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Archived 2005
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