The healthcare marketplace By Warren Greenberg Springer, New York 170 pages £30

Anyone from the UK who visits the US to study the healthcare system learns very quickly that if healthcare in the UK is primarily a public service, then across the pond it is essentially a business.

Like most businesses, US healthcare is in a state of flux. The failure of President Clinton's reforms notwithstanding, rapid changes are occurring in the market, particularly through the growth of managed care.

In recent years the expansion of managed care appears to have moderated the rate of growth of healthcare expenditure, although current indications are that the levelling-off of these costs has come to an end.

This means the proportion of national income spent on health is set to rise beyond the record level of 13.6 per cent achieved in 1995. Not only this, but the problem of the uninsured and the underinsured that the Clinton plan was intended to tackle remains.

Against this background, Warren Greenberg offers an economist's view on the US market in a book that bears all the hallmarks of being based on a lecture series at the author's university in Washington DC. After introducing the main instruments in the economist's tool kit, Greenberg analyses issues such as physician services, the hospital industry and health insurance. In each case, he draws extensively on relevant literature to offer a clear and accessible guide to contemporary developments.

One of the distinctive features of the book is the use of legal cases to illustrate the text. Nine of the 11 chapters are supported by extracts from court cases, demonstrating in the process the importance of judicial decisions in the US healthcare system. Although often valuable in lending weight to the argument, the effect on the reader is to reinforce the academic, dispassionate and, ultimately, rather dry flavour of the author's analysis. A key theme that links several of the chapters is the role of incentives on the performance of the healthcare system. This emerges particularly strongly in the discussion of different payment systems and their impact on both doctors and hospitals.

The impact of incentives under managed care is reviewed at several points, with Greenberg noting the tendency of managed care over matter organisations to reduce utilisation and costs while also having an incentive to select risks and cream skim.

A brief final chapter looks outside the US to experience in Canada, Israel and the Netherlands. Each of these countries offers a counterpoint to the US, although none emerges from this book unblemished.

Perhaps, surprisingly, the success of these countries in achieving universal population coverage at costs considerably lower than those incurred in the US is very underplayed. The Healthcare Marketplace offers a brief and reliable introduction to the business known as healthcare in the US and a starting point for further exploration.

If it fails to excite and stimulate, it nevertheless does a solid job in showing how economists think about the performance of healthcare across the Atlantic.