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The Rise of Market-Based Healthcare · CareTalk: Healthcare. Unfiltered.

• 0:06
  But I think maybe, maybe step back.
• 0:07
  Most people wouldn't even think of, you know, the healthcare part of the economy as, as a marketplace or a part of the economy.
• 0:16
  What changed in the relationship between doctors and hospitals and patients and insurance that, that made that economic theory relevant to healthcare?
• 0:29
  I would say, first of all, people have always been upset about the high cost of medical care.
• 0:35
  You can go back to the 1920s and '30s and see a lot of anger about that, about just how difficult… But particularly in 1965 when we created Medicare and Medicaid, and although this was, this was so-called government-run healthcare, it actually brought in the private sector into the medical care space, and particularly corporations and for-profit corporations in a way that we really hadn't seen before, and the momentum picked up.
• 1:08
  And then with the neoliberal ideas going forward, the notion was, and by the way, this was a rich debate in the 1970s.
• 1:18
  In the 1970s, there was a heavy debate in the United States between government-led health planning versus a free market solution, and both sides went at it, and for a while it looked like the planning effort was winning.
• 1:34
  But then in the second half of the 1970s, the market hypothesis really found its wings and really started to take off, and then the Reagan administration really institutionalized it and b- embedded it in the framework of government in many, many ways.
• 1:53
  Not, not so much in statute or regulation, but in practices, particularly around antitrust and consolidation that is a major driver of healthcare inflation even today.
• 2:05
  So just going back to that, you know, pre-1980 era and even, you know, Medicare and Medicaid in the, in the middle of it in '65 or so.
• 2:13
  So from '33 to '80, you frame that as an era when things were working, you know, decently well, and that's even though it was in the Truman administration was a big push, I think, for a national health plan that never came to pass.
• 2:25
  So, uh, uh, to what, what was working well during this era?
• 2:29
  Well, so one of the, one of the frameworks that is central to my book are the ideas of a political scientist from Yale named Stephen Skowronek.
• 2:39
  You know, when we think about eras in American political history, we tend to look at individual presidents.
• 2:45
  So there was an LBJ era, there was a Nixon era, there was a Obama era, and what Skowronek says is that there are larger politico-economic eras that extend for decades, and he counts five of them, and the two most important for this discussion is the New Deal era that started with FDR in 1933 and actually went on long after his death up until 1980 And when Reagan got elected, many commentators said, "Hey, everybody, this is the end of the New Deal era." And they were right, and it was succeeded by Reagan.
• 3:25
  I didn't understand.
• 3:27
  I was 27 when Reagan got elected, and I didn't believe he was the start of anything substantive.
• 3:34
  I kinda thought he was a little bit of a joke, but it turns out he got, uh, reelected in 1984, winning 49 of the 50 states, and his influence, his ideas borrowed from Friedman and other people, were of fundamental importance in terms of what followed really for a 40-year period, 1980 to 2020, which I refer to as the ne- neoliberal era, when it was free market fundamental principles, including during President Clinton and President Obama, believe it or not, that guided the direction of society.
• 4:15
  And so the belief was, in that period for many, many people, what's wrong with medical care and healthcare in the United States?
• 4:22
  And the answer was that we don't have enough of a free market, and if we can just unleash the free market more, then all of these problems of cost and access would just disappear on their own.
• 4:35
  And that was a firmly held belief by lots of different people.
• 4:39
  In fact, you still hear many Republican office holders say the same line today