Paragon Health Institute CEO Brian Blase and I start from similar, increasingly obvious observations about the U. S. healthcare system and arrive at drastically different conclusions. He proposes a series of market-based reforms. I believe those reforms are structurally incapable of solving the problem.
Every market-based approach to healthcare rests, implicitly or explicitly, on two assumptions: first, that healthcare functions as a market in any meaningful economic sense; and second, that patients behave as rational optimizers. Neither assumption holds. Healthcare lacks the core characteristics of a market—price transparency, substitutability, informed choice, and voluntary timing. Patients frequently encounter the system under conditions of stress, urgency, and profound information asymmetry. These are not minor deviations; they are category violations that have been demonstrated repeatedly in both theory and practice.
I agree with Mr. Blase that federal intervention beginning in 1965 profoundly distorted the U.S. healthcare system. But it does not follow that marketization is the cure. The distortions are now structural, not marginal, and meaningful reform will require a more fundamental transformation of how care is delivered and paid for than incremental market mechanisms can provide.
Read his testimony (linked above) for some eye-opening graphs and figures. Then reflect on real world solutions that might solve the problems they reveal.
