ABSTRACT
Crony capitalism, a deliberate and systematic use of public policy to manipulate markets to benefit particular business and interest groups, is a destructive force. The US health care system is one of the best candidates for studying crony capitalism as it employs the largest number of lobbyists and spends the most on lobbying among all the 13 industrial sectors. The government regulatory agencies at both federal and state levels have been ‘captured’ meaning that regulatory agencies respond to the interests of the industry but not those of the citizens. A conservative estimate puts waste in the US health care system as a quarter of total annual health care spending in the US of $3.8 trillion. But the waste could be as high as 50 percent of the total US health expenditure annually. Four big drivers of the waste/dysfunction in the US health care system include administrative complexity, pricing failures, failures of care delivery and coordination, and overtreatments. Four players, namely, private health insurers, hospitals, pharmaceuticals, and physicians that employ the large number of lobbyists and spend a lot on lobbying chiefly contribute to the waste/dysfunction. The US health care system, rather than combining the more desirable features of capitalism and socialism, has combined the less desirable features of the two economic systems. In a way, it has become socialism for the wealthy interest groups. Current efforts and initiatives to reform the system amount to giving aspirin to treat cancer. They are of mere academic interest and out of touch with respect to the root cause of the problem. They do not even pretend to address the root cause of the problem, crony capitalism, that is driving the waste, inefficiencies, and malaise in the US health care system. Many such efforts, in fact, unintendedly, appear to perpetuate rather than mitigate the US health care system dysfunction as they emanate from the same kind of thinking that has given rise to the current dysfunction.
