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Cut health costs through market innovation

October 07, 2008|By Shirley Svorny

For all its faults, America's health care sector has its advantages. It produces some of the highest survival rates in the world for cancer and other serious illnesses. Patients generally don't have to wait a year for a hip replacement. Being 70 doesn't make you ineligible for a kidney transplant. Rather than give up on all that, let's deregulate medical care so that providers can find innovative ways to deliver high-quality care cheaply. Let's eliminate the increasingly strict education requirements for clinicians and let medical professionals offer walk-in physicals or other services at competitive prices. They will rely on brand name and reputation to ensure quality.

We also need to better promote health savings accounts, which encourage consumers to shop for low-cost alternatives.

Retail clinics are only the first step. My hope is that the resulting increased access and reduced costs will build support for additional innovations - and the deregulatory policies necessary to make them possible.

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Universal coverage sounds appealing, but it means government will be running the trains. Here and abroad, government does not have a good record when it comes to access, oversight or innovation.

Before we give up on free markets, let's actually give them a shot.

Shirley Svorny is a professor of economics at Cal State Northridge and the author of a new Cato Institute study on medical licensing. This originally appeared in the Los Angeles Times.

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