Industries without much competition are marked by high prices, low customer service, and a lack of innovation. But when competition thrives in a market, consumers get better goods and services at lower prices. Existing producers in the market don’t like competition, but it’s good for consumers. Some businesses will succeed and others will fail. But as long as it is easy for new competitors to enter the market, prices will stay low and innovation will continue.
The most important driver of revolutions in price and quality comes from new companies entering a market. But numerous rules and regulations have made health care into a uniquely uncompetitive market. A revolution in health care will require eliminating the restrictions that prevent new entrants to the market.
Regulatory capture occurs when regulatory agencies become dominated by the very industries they were charged with regulating, prompting regulators to advance the goals and interests of those industries. While regulation is necessary and can be done well, it must always be balanced against the potential for unintended consequences that harm the consumers it is intended to protect.