Explaining America’s spendthrift healthcare system: the enduring effects of public regulation on private competition

In this chapter the author explains the enormous waste in the US Healthcare System and the little progress that has been made to achieve efficiency and fairness. To large extent the ‘deep legal architecture’ – the accumulation laws, regulations, self regulatory practices and subsidies – prevents meaningful competition in medical markets. Three areas of improvement are described. First, there is a great urgency to restructuring payment methods for health care delivery, in order to improve efficiency. Second, barriers to market entry in health care markets should be broken down, collusion between health care providers to divide markets and exclusion of new competitors should be prevented to ensure meaningful competition. Third, investment in combatting poverty, lack of education and substandard housing may lead to less costly and more effective health care.