Looking Back at Milton Friedman’s Prescient Vision for Healthcare

In the 1950s, renowned economist Milton Friedman made a bold prediction about the future of healthcare. He argued that if excessive government regulations were removed, free markets would naturally deliver innovations that better serve patients’ needs and reduce costs.

Some of the very innovations Friedman envisioned decades ago are only now being realized through immense effort by policymakers and healthcare organizations. But many still remain elusive dreams rather than realities for most patients.

Friedman accurately predicted that deregulated medical markets would evolve innovations like:

• Coordinated group practices with combined facilities and integrated services.
• Prepaid packages blending insurance, care delivery, and provider networks.
• Medical partnerships and corporations acting as intermediaries between patients and physicians.
• "Department stores of medicine" leveraging economies of scale and one-stop convenience.

He attributed these not coming to fruition to governments intervening and suppressing market forces that would naturally yield such innovations. And Friedman argued centralized planning would always struggle to replicate the efficiencies and consumer responsiveness of free markets.

Since his time, government control over healthcare has dramatically expanded through programs like Medicare and Medicaid, the Affordable Care Act, and a thicket of regulations. Supporters argue this improved access and affordability.

But undeniably, the result remains a dysfunctional system with soaring costs and uneven quality. Americans pay far more but fare worse on many health outcomes compared to nations with market-based approaches.

Perhaps there is wisdom in reexamining Friedman's vision. Could leaning further into deregulation and market forces finally deliver the affordable, high-value, patient-centered healthcare that has become a national imperative?