The economics of choice: Lessons from the U.S. health-care market

Yaniv Hanoch, Thomas Rice

Research output: Contribution to journalArticlepeer-review

12 Citations (Scopus)


The English health-care system is moving towards increasing consumers’ choice. Following economic thinking, it is assumed that such a policy will improve quality, enhance patient satisfaction and reduce health disparities. Indeed, the English health-care system has already built the necessary infrastructure to increase patients’ choice. Before expanding the range of choices further, however, it is important that policy makers be aware of the limitations and hurdles that such a policy contains. Here, we highlight these limitations by drawing on the influential work of Kenneth Arrow, who has argued that we cannot treat the health-care market as if it was just another market, and the ideas of Herbert Simon, who questioned whether people had sufficient cognitive abilities to make effective choices in an information-rich environment. In the light of these two strands of thought, we review evidence suggesting that many older adults have low (health) literacy levels, raising concerns over their ability to obtain, process and understand medical-related information, with its increasing complexity, associated risks and emotional involvement. We also discuss recent findings from the United States highlighting the difficulties older users of health-care face with a wide range of prescription drug insurance plans from which to choose. Thus, learning from the experience of health-care systems where choice is abundant could help any health system interested in extending patients’ choice to better target the domains where more choice could be beneficial and possibly avoid those where it could be detrimental.
Original languageEnglish
Pages (from-to)105-112
Number of pages8
JournalHealth Expectations
Issue number1
Early online date2 Dec 2010
Publication statusPublished - Mar 2011
Externally publishedYes


  • choice
  • economics
  • health literacy
  • medicare part D


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