Recent debates on Medicare reform focus on prescription drug coverage, expanding managed-care choices, or technical issues of payment policy. Despite all the heat generated by these issues, Edward F. Lawlor’s new book, Redesigning the Medicare Contract, demonstrates that fundamental questions of purpose and policy design for Medicare have been largely ignored.

Challenging conventional ideas, Lawlor suggests that we look at Medicare as a contract between the federal government, the program’s beneficiaries, and health care providers. Medicare reform, then, would involve rewriting this contract so that it more successfully serves the interests of both beneficiaries and taxpayers. To do this, Lawlor argues that we must improve the agency of the program—the informational, organizational, and incentive elements that assure Medicare program carries out beneficiary and taxpayer interests in providing the most appropriate, high-quality care possible. The book includes a chapter devoted solely to concepts and applications that give definition to this brand of agency theory. Lawlor’s innovative agency approach is matched with lucid explanation of the more comprehensive groundwork in the history and politics of the Medicare program.

Lawlor’s important and timely book reframes the Medicare debate in a productive manner and effectively analyzes alternatives for reform. Lawlor argues that effective policy design for Medicare requires greater appreciation of the vulnerability of beneficiaries, the complexity of the program itself, its wide geographical variations in services and financing, and the realistic possibilities for government and private sector roles. Tackling difficult problems like end-of-life and high-tech care—and offering sensible solutions—Redesigning the Medicare Contract will interest political scientists, economists, policy analysts, and health care professionals alike.