In December of last year I discussed some of the Megatrends in the Health field and the opportunities these Megatrends represent for entrepreneurs. While our current health care system is loaded with conflicts and problems these also lead to huge opportunities. The Affordable Care Act was a daring step but it turned out to be not affordable and structurally not sustainable. Government and corporations need to rapidly change this unsustainable process while continuing to ensure basic affordable health care availability to everyone . As government embarks on changes to the current system there are lots of opportunities for entrepreneurs. Soon we will hopefully begin to see some of these changes and entrepreneurs can look for great opportunities. In December 2016, I discussed opportunities to reduce admin costs, improve drug delivery, increase the affordability of life extension, execute reforms needed to reduce the cost of malpractice litigation, take advantage of innovation and increase informatics.
In this blog, I want to focus on only one topic, the opportunity for greater entrepreneurship by unleashing the forces of competition. One clear characteristic of the health field in America today is the overwhelming amount of mandated regulations that create excessive burdens and bring up costs. Since deregulation of the airlines in 1978 nearly 40 years ago prices of tickets have averaged a whooping 40% reduction in costs. In 2016 constant dollars as an example back in 1955 (63 years ago!) a Los Angeles to Kansas City non-stop flight would cost you $575 and take you 5 plus hours. Today, that same route can be completed in less than 3 hours in a less noisy aircraft with a greater degree of safety and for an average $183 and you get frequent flyer points on top. What if we could deregulate the health care industry like we did the airline industry and bring prices down 40% (The example above brought a plane ticket down 68%). Affordability would go through the roof! Also access to health care would increase. Nonetheless in the area of healthcare, “access to everyone is essential” and government would have to make sure that the really sick and poor have access to medical care but overall in a downward price move, overall national cost of health care would go down and access should increase.
Deregulation is not without losers. In the airline industry TWA, Eastern and other airlines failed but the consumer won and new airlines such as Southwest emerged. Equally some health insurers and providers will fail in health care deregulation but with American entrepreneurship and ingenuity and open competition, the health consumers will win in the long run.
Let’s continue to watch what our legislators concoct!