Why Free Markets and Price Transparency Can Save Healthcare:
A Dutch Perspective
Capitalism and free markets have revolutionized industries for centuries, but healthcare remains an outlier. Opaque pricing and monopolistic practices distort value and stifle progress.
I believe competition, transparency, and free-market principles can transform healthcare into a system that delivers better outcomes, lower costs, and more physician autonomy.
Free markets thrive because incentives drive innovation and efficiency. Businesses compete to attract customers, pushing them to deliver better services at lower prices. In healthcare, monopolies, and opaque pricing block these forces.
Transparent pricing eliminates hidden costs and reveals the actual value of services. Patients and employers, armed with this information, can make smarter decisions. They may then compete on quality and efficiency instead of relying on inflated or arbitrary prices.
Competition fosters accountability. Transparent pricing forces facilities and insurers to justify their value to consumers. In competitive markets, prices drop naturally. A diagnostic colonoscopy at a hospital receives $4,200, while an independent gastroenterology center receives $1,700 for the same service. Patients choose the lower-priced, high-quality option when pricing is transparent. This pressure drives innovation and pushes medical delivery facilities and independent medical practices to improve patient experiences and outcomes.
I grew up in the Netherlands, a country with a deep trade, innovation, and capitalist history. The Dutch pioneered modern commerce, laying the foundations of price discovery and risk management. These principles continue to shape my vision for transforming healthcare.
Maarten Prak and Jan Luiten van Zanden explore this in Pioneers of Capitalism: The Netherlands 1000–1800. Their work shows how Dutch merchants in the Golden Age embraced transparency, pragmatism, and competition to build an economic empire.
In 1602, the Dutch East India Company (VOC) issued the world’s first publicly traded shares, creating the Amsterdam Stock Exchange—the first stock market. The VOC’s transparent pricing system revolutionized trade, allowing investors to understand the value of assets in real-time. Imagine a healthcare system where patients and employers had the same clarity when purchasing services.
The Dutch also innovated risk management through early forms of insurance. They understood how pooling risk could reduce uncertainty and unlock opportunity.
Today, self-funded healthcare plans and captive insurance strategies adopt these same principles, allowing employers and physicians to take control of their costs.
The Dutch Golden Age thrived because merchants competed to create value, not monopolies. Healthcare can achieve the same success by embracing competition.
My thinking draws heavily from the work of great economists. Jan Tinbergen, the first Nobel laureate in economics and a Dutchman, emphasized balancing economic policy with market forces. His theories on resource efficiency align with my belief that transparent pricing can reduce waste and deliver better outcomes. Tinbergen’s ability to quantify trends inspires my data-driven healthcare reform approach.
Adam Smith’s ideas also shape my perspective. In The Wealth of Nations, Smith described the “invisible hand” of the market, explaining how competition drives innovation and efficiency. His belief in the power of individuals pursuing their interests aligns with my mission to empower physicians and facilities.
Friedrich Hayek warned against central planning, championing the role of price discovery in allocating resources efficiently. Hayek’s work reinforces my conviction that transparency forms the foundation of a functioning healthcare market. Milton Friedman’s focus on individual freedom and limited government intervention supports my view that healthcare needs less control, not more. His insights on consumer choice mirror my advocacy for price transparency.
These principles have succeeded in healthcare when applied. Physician-owned Hospitals and Ambulatory Surgery Centers (ASCs) demonstrate how competition lowers costs while improving outcomes. They consistently outperform health systems in price and quality for procedures like joint replacements and colonoscopies.
Retail clinics also show the power of transparent pricing. By offering precise costs and convenience, they expand access to affordable care and improve patient satisfaction.
Employers bypass insurers by directly contracting with physicians to save money while providing better benefits. Transparent pricing allows them to predict expenses, reduce waste, and improve employee outcomes.
Healthcare needs transformation, and competition and transparency provide the solution. Just as the Dutch revolutionized trade and finance, we are revolutionizing healthcare by giving patients, employers, and physicians the tools to compete on quality and value. Central planning and monopolies haven’t worked. Freedom to compete will.
Freedom for physicians to run their practices, freedom for patients to make informed decisions, and freedom for markets to deliver better care. The legacy of capitalism—from Jan Tinbergen to Adam Smith and the lessons from Pioneers of Capitalism—proves we already have the blueprint. It’s time to apply it and unlock healthcare’s full potential.
What do you think?
Can competition and transparency save healthcare? I’d love to hear your thoughts.
-Rojas out