Jared Rhoads, director of the Center for Modern Health, said the U.S. healthcare system has moved away from free-market principles over time, contributing to higher costs, increased bureaucracy, and reduced transparency for patients.
“The farther healthcare has moved toward government involvement and third-party payment, the more distorted the system has become,” Rhoads said during an appearance on the Health Policy Podcast. “When patients are separated from prices and providers are buried under compliance requirements, the basic mechanics of a functioning market break down.”
Rhoads said the shift from individual responsibility for healthcare costs to a system dominated by public programs and employer-based insurance has steadily reduced price competition and accountability. He noted that layers of regulation and administrative rules have expanded alongside government involvement, increasing overhead costs for providers and limiting flexibility in care delivery.
Rhoads also said cultural assumptions play a significant role in resisting reform, including the belief that healthcare must operate differently from other sectors of the economy. “There’s a widespread assumption that market principles can’t apply to healthcare, even though markets drive efficiency and innovation in nearly every other part of our lives,” he said.
He pointed to examples of market-oriented healthcare models already operating in the United States, including direct-pay primary care practices and cash-based ambulatory surgery centers, where pricing is transparent and transactions are simpler. Rhoads said these models demonstrate that competition and patient choice can exist alongside quality care.
The Center for Modern Health is a policy organization focused on advancing research and public discussion around healthcare reform, with an emphasis on market-based solutions and reducing regulatory burdens. The organization publishes policy analyses and commentary examining how government involvement affects healthcare costs, access, and innovation.
Rhoads is the director of the Center for Modern Health and a health policy analyst who studies the interaction between government regulation and healthcare markets. He regularly speaks and writes on healthcare reform, insurance policy, and the role of market forces in improving patient outcomes.
