FreedomFest Recap: Why Obamacare Stifles Healthcare Innovation

I had the pleasure of speaking recently on a healthcare panel at FreedomFest in Las Vegas. Here’s a recap of my remarks on innovation and entrepreneurship in healthcare.

In the 2012 book Priceless: Curing the Healthcare Crisis by Dr. John C. Goodman, my colleague at the Independent Institute, John wrote: “The ACA [Obamacare] approach will stifle innovation and entrepreneurship” (p. 263).

Why was John so certain that Obamacare would slow healthcare innovation?

The approach to innovation in Obamacare is to spend money on pilot programs and other experiments, find out what “works,” and then copy it on a grand scale.

This is not entrepreneurship! Rather, this is top-down cookie-cutter replication, where government bureaucrats decide what “works,” not healthcare consumers and their doctors.

True entrepreneurship consists of thousands, often millions, of people trying NEW things, not copying current approaches. Successful innovations come from challenging conventional thinking, not by replicating it. True innovation is the antithesis of replication. It is about trying new approaches, discovering what works—as judged by decentralized consumers—and going against accepted ways of doing things when needed.

This is why Obamacare stifles true innovation – the rewards go to copycats who pursue known ways of doing things, not to radical disruptors. And no sector of the economy needs entrepreneurial disruption more than healthcare.

As a result of the Obamacare approach to “innovation,” Dr. Goodman describes the resulting healthcare sector as “a sea of mediocrity punctuated by islands of excellence” (p. 43).

Despite severe impediments to true innovation in healthcare today, there are green shoots of innovations that would put consumers in the driver’s seat, if only governments would get out of the way. For example, Heal allows patients to open an app and request a doctor to be dispatched to their home. Payment ($99 per visit) is done through the app, and doctors can do things from standard checkups to blood tests onsite. Ultrasounds and vaccines are in the pipeline.

GiveForward is an online fundraising platform that helps patients handle out-of-pocket medical expenses through crowd funding.

Castlight Health allows patients to enter their zip code and the service or procedure they need, and it gives them a list of area doctors, as well as a breakdown of what they charge for their services.

iTriage connects symptoms to potential conditions and offers real-time features like wait times at nearby emergency rooms and urgent-care clinics.

Emmi Solutions is a company that uses teams of visual and graphic artists, voice artists, scriptwriters, and patient focus groups to simplify complex medical information to provide people with information they can easily understand. Think of it as healthcare infographics for the general public.

ZocDoc lets users view a map of doctors in their insurance network and read patient reviews to help choose the right doctor. Brighter lets consumers compare dentists by price and reputation.

This is what true entrepreneurship and innovation looks like. It’s messy, scattered, and about disrupting conventional approaches. These innovations give new meaning to “consumer-driven healthcare.”

In contrast, Obamacare pilot projects are about conformity—qqqa centralized cookbook approach that promises failure on a grand scale.

Healthcare needs entrepreneurial disruption focused on consumer satisfaction and consumer empowerment, not bureaucratic conformity focused on aiding political cronies.

Lawrence J. McQuillan is a Senior Fellow and Director of the Center on Entrepreneurial Innovation at the Independent Institute. He is the author of the Independent book, California Dreaming: Lessons on How to Resolve America’s Public Pension Crisis.
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