By STEVE ZECOLA
Americans spend about $3 trillion
per year on healthcare, or about $10,000 per person per year. Despite these
expenditures, Americans are worse off than their international counterparts
with respect to infant mortality, life expectancy and the prevalence of chronic
In policy debates, Republicans
mostly prefer to let the marketplace devise the appropriate outcomes, but this
approach ignores the market failures that plague the industry.
On the other hand, Democrats propose
a variety of solutions such as “Medicare for All” which nationalizes all
healthcare insurance or, as a variant, “Medicare as an Option for All” which further
extends the federal government into the provision of healthcare insurance. Such
approaches could actually result in a less efficient outcome, or worse yet, create
a market beset by political ping pong when Administrations change.
This paper proposes a new
standards-based approach for fixing the inefficiencies plaguing the healthcare
industry in the United States. As described herein, a non-profit standards body
would be established by Congress to bring a coordinated approach to healthcare
for each of the top ten chronic diseases.
Such an approach would establish consistent
priorities and practices across all of the components of the healthcare
industry affecting these chronic diseases, including standards of care, areas
of research emphasis and insurance guidelines.
Under such an industry structure,
patient care would improve and the overall costs for the provision of
healthcare would drop significantly.
U.S. Healthcare Market Doesn’t Function Effectively or Efficiently
Looking at the components of the
healthcare industry from standards of care to prices to insurance coverage to
potential new treatments, virtually none of the relevant choices are understood
by the consumer. What this means from an economic point of view is that there
is no “invisible hand” of the marketplace driving an effective and efficient
outcome from the interplay of supply and demand. In economic terms, imperfect information has
led to a market failure. The lack of
readily-available information for consumers is particularly true in the case of
One of the