ABSTRACT
In the advanced economies, healthcare providers face two problems. First, they need to recognize
that the quality of healthcare has fallen behind other products and services. This has led to
thousands of unnecessary deaths and injuries, as summarized in Allen (2013). Second, aging
populations and less healthy urban lifestyles are resulting in a more rapid increase in demand for
healthcare than can be paid for by both income and tax revenue growth in the squeezed middle
classes. The situation is particularly challenging in the USA, which has some of the best hospitals
in the world, but at the same time spends twice as much per head relative to other advanced
countries to achieve similar outcomes.
