Consumer-Driven Healthcare a More Sustainable Way to Contain Spending

Just as President Obama’s healthcare law is tightening its grip on American health insurance, there are growing signs of the promise of market-based health plans to lower costs.

There has been a long-running debate among health policy experts on the Left and Right about the best way to contain the growth of healthcare spending. For liberals, most solutions were rooted in increasing centralized control and instituting cost containment from the top down.

The ideal liberal plan would be some sort of single-payer program in which government was the purchaser of healthcare services for everybody, and used its power to limit spending. This philosophy was the driving force behind the liberal push for making a “public option” available alongside privately administered plans on the government insurance exchanges and for allowing Medicare to directly negotiate prices with drug companies.

Liberals weren’t able to achieve those changes with Obamacare, but as liberal economist Paul Krugman has written, the law that was passed “basically relies on a combination of regulations and subsidies to rope, coddle, and nudge us into a rough approximation of a single-payer system.”