James Capretta writes about the need for major changes in the way the United States approaches health care.

The US occupies a unique position on this policy spectrum. None of its peer countries allow as much space as the US for private insurance and privately-owned systems of care provision to engage directly with consumers and patients beyond the reach of full public regulation. Even so, the US does not have a “free market” for medical services, as critics so often state incorrectly. There is substantial regulation, and hefty public subsidization too. The result is best seen as an unruly public-private non-system with requirements written based on changing historical conditions and no overall plan guiding their evolution.

At the center of this complex mix of federal and state programs and regulations is a vast network of hospitals, physician practices, nursing homes, and other institutions that are both highly skilled and technically competent and thus capable of world-class care. But its fragmentation and complexity also lead to excessively burdensome costs, paid through high premiums and expensive public programs. …

… The heavy burden these costs impose is the principal failing of the US system and the one that still needs to be addressed in a coordinated fashion. The challenge is to create new structures that inject durable cost discipline into the provision of medical services without eroding their quality and timeliness. That should be possible as studies show that much of the high-cost burden is associated with irrational pricing in some settings, frequent occasions when services are rendered to patients despite scant empirical evidence of their efficacy, and heavy administrative overhead and maddening levels of paperwork.

There is an opportunity here for proponents of a market-oriented solution to show they have a plan for attacking this problem, but they need to frame the debate properly in order to win it. What’s needed is not one-off ideas but a system change that incentivizes continuous productivity and quality improvement in the processes governing patient care. Market proponents must convince voters such a system change is more likely to occur with their ideas and not with more centralized government control.