Book review: the cost disease: why computers get cheaper and health care doesn’t

The exploding cost of health care is a source of widespread alarm. Similarly, the upward spiral of tuition fees is cause for serious concern. In this concise and illuminating book, economist William Baumol explores the causes of these seemingly intractable problems and offers a surprisingly simple explanation. Baumol identifies the ‘cost disease’ as a major source of rapidly rising costs in service sectors of the economy. Once we understand that disease, he explains, effective responses become apparent. Edward Larkin finds Baumol’s interpretation of rising health care costs compelling; a must-read for policymakers.