Berwick on the Myth of Free-Market Health Care

Berwick on the Myth of Free-Market Health Care

Why It Matters

"If we are smart enough to change our ideas and get our organizations to work together, we’re going to get better results. That’s not going to happen in a competitive environment. You don’t win or lose while trying to make your community healthy."


The overwhelming response to his 2022 Institute for Healthcare Improvement (IHI) Forum keynote, titled “Salve Lucrum,” and the JAMA Viewpoint of the same name (which has so far been downloaded over 159,000 times) has encouraged IHI President Emeritus and Senior Fellow Don Berwick to keep exploring what he calls “the existential threat of greed in US health care.” In the following interview, Berwick offers a preview of his 2023 IHI Forum keynote by challenging the assumption that market competition is the best way to improve health care quality and reduce costs.

You mentioned recently that a book by Naomi Oreskes and Erik M. Conway that came out earlier this year, The Big Myth: How American Business Taught Us to Loathe Government and Love the Free Market, has been on your mind. Why have you found it so compelling?

Over the past few years, I've been thinking hard about the core problem of soaring and unsustainable costs in American health care and its relationship to quality. I've been describing the phenomenon, calling for changes, and trying to keep my eye on improvement as a methodology, but there’s also a need to contemplate the answers to some key questions: How did we get into this mess? Why are costs so out of control?

The Big Myth challenges some common assumptions. It tests a theory that we have become overcommitted to markets, competition, and capitalism as the engine of excellence and improvement. The authors do not think — nor do I — that capitalism is always a terrible thing, but for certain social needs like health care and dealing with climate change or public health threats, for example, we must act collectively and not competitively. Markets are not the answer, but rather a barrier to improvement. Indeed, markets can create a smokescreen for not acting.

What have you learned that has surprised you about a competition-driven health care system?

The idea that — if we get competition right — everything will work out, is so pervasive. I have had doubts about it for a long time, but I was surprised to learn that there is little evidence to support it. In fact, there is a lot of evidence to the contrary.

What I’m learning makes it clear that markets and competition often fail to deliver the outcomes we want in health care, such as better quality, lower costs, greater equity, and more innovation. Markets and competition also create perverse incentives, such as overuse, underuse, waste, fraud, and harm. Markets and competition also undermine the values and relationships that are essential for health care, such as trust, compassion, collaboration, and professionalism.

Beliefs about markets and competition are deeply held in the US and many other countries. I want to be clear that what I’m saying is not a wholesale attack on markets and capitalism, but I am calling into question whether these systems make sense for certain needs, including health care.

Proponents of the free market in health care often argue that competition drives innovation. What would you say to that?

Competition can, of course, drive innovation. You could argue that computers get better because computer companies compete to win my business. But, if you look at the roots of innovation in health care, what you find is public investment. Much of the knowledge companies have that lead to innovations in pharmaceuticals, understandings of biological mechanisms, and technologies come out of the US National Institutes of Health and other areas of the public sector. Many innovations in health care wouldn’t happen without public sector investment.

What example can you share of a more cooperative than competitive approach to health care that is benefiting patients and communities?

I am seeing more communitarian efforts around the world. I love what Cincinnati Children’s Hospital Medical Center, a longtime partner of IHI, has done to help their city better meet the needs of tens of thousands of children in Cincinnati. They join with communities, organizations, and individuals from around the region because they understand they can’t improve the health of their community on their own.

What will be the key to change?

We need to get into a more cooperative rather than competitive approach, especially around community health. To generate health in communities we will have to cross many sectors. Everybody will need to be at the table to change the conditions that generate health and well-being. This will involve our education systems, community-based volunteer organizations, people concerned with the environment and energy policy, the criminal justice system, and many others.

I believe that the public at large — certainly, the health care workforce — would rather cooperate than compete. If we are smart enough to change our ideas and get our organizations to work together, we’re going to get better results. That’s not going to happen in a competitive environment. You don’t win or lose while trying to make your community healthy.

It strikes me when you talk about “winners” and “losers” to ask who is winning and who is losing when we prioritize competition over cooperation?

Exactly. It’s like if we imagine a tennis game. We’re on the same side of the net, everybody. The other side of the net is disease and suffering and disability and injury and depression. That’s what we need to compete against — not each other.

Editor’s note: This interview has been edited for length and clarity.

Photo by Alexander Grey | Unsplash

You may also be interested in:

IHI President and CEO Kedar Mate’s IHI Forum 2023 keynote preview — The Power of Purpose and What Gets in the Way

Salve Lucrum IHI President Emeritus and Senior Fellow Don Berwick’s 2022 IHI Forum keynote

Harvard Advanced Leadership Initiative Social Impact Review book review of The Big Myth — How American Business Taught Us to Loathe Government and Love the Free Market