Featured: States Should Lead on Healthcare With Supply Side Reforms

May 10, 2023 | In The News

The following opinion piece written by IRG’s Alex Ignatowski and Tomas Philipson, economist at University of Chicago and a former Member and Acting Chairman of the President’s Council of Economic Advisers, ran in the RealClearPolicy on Wednesday, May 10, 2023.

(RealClearPolicy) – States Should Lead on Healthcare with Supply Side Reforms

The American healthcare industry has a problem — the costs for patients keep rising and Americans’ satisfaction with the industry continues to fall.

Right now, the United States is spending approximately 18% of its gross domestic product on the healthcare industry. Simultaneously, public satisfaction with the healthcare system is at historic lows, with nearly one-half of Americans saying the system has “major problems.” Since the start of the industrial revolution, the American consumer is accustomed to improving standards and quality, while products and services become more accessible and less expensive.

So why is healthcare different? We think it is because the supply of health care is held back by governments thereby raising prices and lowering quality.

Thus, while this is often thought to be a complicated question, the answer lies in politics and public policy. For nearly six decades, the US has continuously been moving toward government-run healthcare. Public payers are monopolies that mandate you pay a premium through your taxes as opposed to a free market where plans compete to get your premium handed over voluntarily. If you could keep your taxes and you were allowed to spend them on competing health plans, you would be much better off…

Read the full article here.