Economic forces drive behavior in the general economy. These same forces affect how health care is delivered, except in health care, there’s a third party (the insurer) paying for the care. What happens in health care is largely driven by these economic forces. Understanding those forces is critical to figuring out how to make our health care system better.

On today’s show, Dr. Steve Feldman talks with Hal Luft, Ph.D., an economist, Professor Emeritus at the University of California San Francisco, and director of the Palo Alto Medical Foundation. Dr. Luft explains the economic incentives present in our health care system, alternative ways health care economics could be organized, and the potential impact of changing incentives in our health care system. Next week, Dr. Feldman continues the discussion with Dr. Luft, focusing on pay-for-performance systems in medicine.

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