Insurance Plays Too Big a Role in the U.S. Healthcare System

Businessman David Goldhill examines where American healthcare dollars should really be spent.

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It's very confusing right now because the system is really designed to serve either insurers or the Centers for Medicare & Medicaid Services. But as more and more people find themselves directly spending their resources on healthcare, we're more likely to see providers respond to them in the way that providers in every business respond to who's actually paying the bill.

Is there a good model for healthcare reform?

What they do in Singapore is interesting. Even though the government subsidizes just under half of all healthcare spending, it forces the patient to be the actual purchaser at the moment at which care is delivered. Singapore will spend roughly 4 percent of GDP on healthcare this year, which obviously is a fraction of ours.

What do you think will most surprise readers?

How little impact healthcare has on health relative to all the things we're not spending money on, like diet and disposable income, recreation and stress levels, and poverty. Those are the big drivers of healthcare costs in rich countries right now.

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