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HomeBusinessVictor Fuchs, a pioneer of health-care economics, dies at 99

Victor Fuchs, a pioneer of health-care economics, dies at 99


Victor Fuchs, a pioneering Stanford University economist who sought to explain why Americans don’t live longer, healthier lives despite spending a fortune on health care, died Sept. 16 at his home on the school’s campus in California. He was 99.

His son Fred confirmed the death but did not cite a cause.

Often described as the dean of American health economists, Dr. Fuchs spent more than five decades diagnosing the ills of the nation’s health system, which now accounts for 18 percent of gross domestic product. American health costs per capita have long been the highest in the world, with spending reaching nearly $13,000 a person in 2021, even as Dr. Fuchs and other economists found that the same quality of care was available in other countries for far less, sometimes at half the cost.

“If we solve our health-care spending, practically all of our fiscal problems go away,” he told the New York Times in 2012. If we don’t, he added, “then almost anything else we do will not solve our fiscal problems.”

Dr. Fuchs applied a cost-benefit analysis to health care while calling for universal coverage and criticizing high administrative fees, soaring drug prices and the proliferation of specialist physicians over primary-care doctors. He cited plenty of data while making his arguments, although his work was also shaped by an abiding concern for social justice, and a belief that he and his fellow economists could guide policymakers toward a better, more equitable health-care system and society.

“He was convinced that economists in general, and health economists in particular, need to be asking the big questions,” his colleague Liran Einav, the chair of Stanford’s economics department, said in a university obituary.

Along with the British sociologist Peter Townsend, Dr. Fuchs was an early proponent of the relative-poverty line, which he proposed in 1965 as a way to understand — and combat — poverty based on changes in the economic climate. He later studied the economics of gender, concluding in his 1988 book “Women’s Quest for Economic Equality” that despite more than two decades of feminist activism, the economic gap between men and women “was no smaller in 1986 than in 1960.” (He found one notable exception: “young, white, unmarried, well-educated women,” who gained significantly on men even as their female peers lagged behind.)

But he remained best known for his 1974 book “Who Shall Live?: Health, Economics and Social Choice,” an elegant 170-page diagnosis of the U.S. health system that was aimed not at fellow economists but at physicians, policymakers, business executives and anyone else interested in the issues of the field.

“Page for page, there is more fact, and more illuminating principle, than in many books 10 times its length,” the physician and civil rights activist H. Jack Geiger wrote in a review for the New York Times.

“No one,” he added, “has done a better job of identifying and analyzing for the general reader the key problems (the costs of care, access to care, and the growth of technology) and the key areas … and following them through to a set of clear, rational and manageable conclusions and recommendations for the future.”

Dr. Fuchs argued for sweeping changes, including the abolition of the fee-for-service system in which hospitals are reimbursed for each procedure or test, regardless of how effective or necessary the service may be. But there were no easy answers, in his telling: Transforming the health-care system meant reshaping society altogether, including by working to alleviate poverty, violence and environmental hazards.

“It is only a short walk from the opulence of upper Park Avenue to the rat-bitten, lead-poisoned children of East Harlem, but for our institutions that distance represents a chasm they seem powerless to bridge,” he wrote.

Although he retired from teaching in 1995, Dr. Fuchs was still active into his 90s, conducting research, publishing papers and mentoring younger generations of economists and public health officials. Shortly before his death, he finished updating a third edition of “Who Shall Live?” with a co-author, Karen Eggleston.

Physician and health economist Alan M. Garber, the provost of Harvard University, said that nearly a half-century after it was first published, Dr. Fuchs’s book remains “the most cogent description of the costs and impact of U.S. health care.”

“His ideas,” he added, “remain relevant to every contemporary policy debate about how to improve the nation’s health.”

The older of two children, Victor Robert Fuchs was born in the Bronx on Jan. 31, 1924. His parents were Jewish immigrants from Austria — his father was a furrier, his mother a homemaker — and his younger brother, Lawrence, followed him into academia, founding the American studies department at Brandeis University. He later helped shape immigration policy as an adviser to the federal government.

After serving in the Army Air Forces during World War II, Dr. Fuchs studied business administration at New York University. He received a bachelor’s degree in 1947 and worked for his father’s fur company before completing his economics training at Columbia University, earning a master’s degree in 1951 and — with a dissertation on the economics of the fur trade — a doctorate in 1955.

Dr. Fuchs’s health-care research had its roots in the Ford Foundation, where he worked on an economic development program and commissioned articles about public policy problems. For a piece about health care, he turned to economist Kenneth Arrow, a future Nobel laureate and Stanford colleague, who examined the role of uncertainty and risk aversion in the health-care market.

The article, published in the American Economic Review in 1963, helped elevate health economics into a major field. “In Greek legend, Helen’s beauty launched a thousand ships; Arrow’s article has launched more than a thousand studies,” Dr. Fuchs wrote in an essay after Arrow’s death in 2017.

Dr. Fuchs went on to study service industries, including retail and barber shops, before zeroing in on health care. He wanted to understand the country’s emerging postindustrial economy, he said, and increasingly spent time with doctors and other medical providers after securing a joint appointment in 1968 as a professor at the Mount Sinai School of Medicine and the Graduate Center of the City University of New York.

In 1974, he joined the faculty at Stanford, with a similar joint appointment at the medical school and economics department. He was later elected president of the American Economic Association, although it was obvious to colleagues that his interests extended far beyond the field: He painted, sketched and wrote poetry, and for years was known for performing stand-up comedy at Stanford events.

His wife, the former Beverly Beck, whom he married in 1948, died in 2007. Survivors include four children, Nancy Fuchs Kreimer and Fred, Paula and Ken Fuchs; 10 grandchildren; and six great-grandchildren.

Dr. Fuchs’s proposals for health-care reform included a plan for a voucher system, funded through a value-added tax, that would guarantee universal coverage with a standard package of benefits. The proposal was “revolutionary,” he acknowledged, although he didn’t think it was entirely unrealistic, especially as health costs continued to eat up the federal budget.

“American history is studded with examples of things that were not politically feasible until they were,” he told the Times in 2012. “The emancipation of slaves. Creation of a strong, independent central bank. The replacement of the gold standard with fluctuating foreign-exchange rates. A trillion-dollar bailout of the financial industry.

“Alexis de Tocqueville said that in the United States things move from the impossible to the inevitable without stopping at the probable,” he continued. “Because we are reaching a crisis and the only thing that will solve it is enormous change, we will have enormous change.”



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