The new administration has at last come to DC, and opportunities for genuine reform, it seems, abound. Positive energy has been flowing since the recent “vibe-shift” made cracks in the edifice of the progressive status quo. The breadth of the new governing coalition—from post-liberal populists to libertarians and practically everything in between those poles—has opened up a realm of creativity and enthusiasm for seeking fresh solutions to problems long thought to be intractable.

　　The last libertarian moment came and went circa 2008, giving way to the Woke Era, when the nursemaids of the progressive nanny state rolled their prams triumphantly through the institutions. Now, suddenly, tech billionaires have rediscovered their inner libertarian, DOGE is rattling—indeed smashing—the teacups of administrative state mandarins, even if they operate in a sometimes testy “Rebel Alliance” with populists. Most unlikely of all, Javier Milei, the tousled-headed Austrian-school economist, is showing the way forward after an extraordinarily successful year as president of Argentina.

　　In the first sixty years of my life, healthcare was always recognized as a progressive issue. Whenever the subject came up in Congress, Democrats smiled and licked their lips and Republicans anxiously scanned the crowd for pharmaceutical and insurance lobbyists. But if “Making America Healthy Again” is firmly on the agenda, perhaps there’s now an opportunity for thinking in new ways about healthcare delivery, one that starts with health rather than the priorities of bureaucrats, drug companies, insurers, and the politicians who love them.

　　The ordo-liberal tradition might be a key guide. “Ordo-liberalism” was the brainchild of Wilhelm Röpke, an intellectual leader of the anti-fascist resistance in Germany during the 1930s. An economist in the Austrian tradition and a defender of free markets, he nevertheless recognized the need to “order” markets under some higher purpose. Human beings should not be reduced to utility maximizers. Government policies needed to aim at more than increasing GDP; they needed to serve citizens in their full humanity, balancing freedom with a need for security and collective responsibility. Societies had to direct markets to serve wider human ends via incentive structures and minimal government regulation, subject to democratic approval. Working with Ludwig Erhard, the West German minister for economic affairs between 1949 and 1963, Röpke was one of the architects of the German postwar Wirtschaftswunder, which combined economic freedom with policies designed to shape a “social market.” Ordo-liberalism was meant to be a “third way” between laissez-faire capitalism and socialism.

　　So here, in the spirit of ordo-liberalism, is a common-sense proposal for the reform of healthcare from a conservative writer who has absolutely zero qualifications as a healthcare expert—that’s how you know it’s a commonsense proposal. I bring to the table, apart from (I hope) common sense, only a college major in economics, plus an informed sense of outrage over the medical profession’s abuse of classical Greek. The common sense comes from my father, who taught me the importance of getting compound interest on your side as early as possible in life. From other conservative mentors, I acquired three other convictions that have been borne out by experience. One: If you want to solve a social problem, the least effective way to do so is to send massive sums for that purpose to our elected representatives in Congress. Two: You cannot and indeed should not take away benefits that have been promised to American voters and paid for through payroll deductions. Three: Never underestimate the power of Americans’ generosity in a good cause.

　　But I promised seven easy steps to reform the US healthcare system. Please wait until the end before dismissing the author as an impractical dreamer. Here they are:

　　1. All healthcare providers, doctors, nurses, and hospitals must operate on a fee-for-service basis, with full-price transparency. A healthcare price transparency initiative was begun during the previous term of office of the present administration, but was abandoned by its successor.

　　2. All citizens will on demand be issued with healthcare cards, which will contain (1) all of their medical records, encrypted, which only they can release to providers; (2) a payment function linked to personal Health Savings Accounts (HSAs). Cards issued to minors would be linked to their parents’ accounts. Your healthcare card will entitle you to membership in a local HSA alliance (see Step Seven below). Note that the cards would be issued on demand by citizens or their legal guardians; they would not be mandated or required. Those not demanding healthcare cards will be provided with free psychological and personal finance counseling, so they can have their heads examined.

　　3. Value might be added to personal HSAs by the individual citizen, by his or her parents or other relatives, or by an employer, a church, or a charity. HSAs would be heritable—grandparents could leave any balances in their HSAs to their grandchildren. The wealthy could donate funds to needy individuals or to charities that make grants to needy individuals, providing spectacular opportunities for virtue-signaling, but for a truly good cause. A fixed percentage of funds in a citizen’s HSA, decreasing with age, might be invested in equities, with capital gains taxed at one-half the rate of other capital gains. All individual transfers to one’s own HSAs would be tax free, and transfers to another person’s HSA would be tax-deductible. For persons under 50, the amounts they have already paid to the federal government in Medicare taxes would be transferred to their HSAs. Persons over 50 could decide whether to remain in the Medicare program or to request a sum, equivalent to double their lifetime payments, to be distributed to their personal HSA. Any amounts previously paid into HSAs—which already cover 71 million Americans—would be deducted from the distribution.

　　4. Funds in HSAs should be spent only on licensed professionals or hospitals and clinics approved by state governments. States would decide whether to include mental healthcare. Purchase of medical services would be tax free. Licensed, full-time medical professionals, as well as for-profit hospitals and clinics, would be taxed at lower rates. Licensing would continue to be the responsibility of the states. Regulation of hospitals would be the responsibility of states and localities, as at present, not the federal government. Regulation of pharmaceutical companies would continue to be the responsibility of federal agencies, with oversight from Congress. Keeping Big Pharma as national companies would preserve economies of scale.

　　For too long, healthcare reform has been synonymous with heavy-handed government. Shifting political winds, however, might make room for common sense reform.

　　5. The federal government would continue to fund research into rare diseases and public health, but public funds would only be allocated for these purposes after public hearings before Congress. All other government funding of pharmaceutical companies would end. So would “direct to consumer” (DTC) marketing. Drugs could only be marketed to medical professionals (as is the case in most countries). To ensure a robust rate of investment in healthcare and pharmaceutical research, those individuals who are investing a percentage of their HSAs in the market might be incentivized to invest some proportion of their HSA portfolio in healthcare equities.

　　6. Medicare and Medicaid would eventually be abolished, along with Obamacare. Individuals would no longer be taxed for Medicare, reducing payroll taxes for individuals and employers by 1.45 percent each. The federal government would remain the insurer of last resort for catastrophic illnesses, should other sources of funding prove insufficient. State healthcare options could be transformed into public charities for state residents with insufficient healthcare funds available to them. This is essentially what most of them do now. Or state healthcare funds might be redistributed to poorer regions in the state, to offset the inequalities in healthcare provision that might otherwise arise.

　　7. Private insurance companies would be abolished. They would be replaced by basic healthcare plans offered by local providers, or, for more expensive procedures, plans offered by state HSA alliances, run by and on behalf of consumers. HSA alliances would be geographically restricted to cover the populations of individual congressional districts (averaging around 750,000 people). This provision of the reform would provide enough income from payors to finance most extraordinary health expenses incurred by individuals. It would require individual alliances to follow sound financial practices, but would do away with the need for the competitive cost-cutting that drives giant insurance companies to deny coverage so as to maximize shareholder profits. The provision to restrict HSA alliances geographically would prevent too great a divergence between the interests of citizens and their healthcare providers.

　　HSA alliances would be run by local boards, elected by the members, with their finances overseen by state legislatures. HSA alliances might subsidize low-cost gym memberships, walking and biking clubs, and other activities promoting health. The existence of 435 distinct healthcare alliances across the country would ensure a substantial amount of medical experimentation. There might emerge both cooperation between and virtuous rivalry among regional alliances. Home buyers might start to look for good HSA alliances the way they look for good school districts today.

　　I think it will be evident to anyone who has taken Econ 101 that, under this proposal, Americans collectively, and in a very short time, would have very large sums available to them in their HSAs, and government expenditure on Medicare and Medicaid would drop rapidly, possibly after an initial spike. Health outcomes would improve, if only because doctors would be able to spend less time justifying tests and procedures to insurance companies and complying with regulation, and more time with patients. The tax incentives and relative freedom from regulation and compliance paperwork would increase the motivation of young persons to undertake medical careers and help remedy the shortage of physicians. There would be more doctors and nurses in private practice and clinics and fewer in HMOs; expenditures on medical administration would drop. Investment in pharmaceutical research would increase, although it would come principally from individual shareholders in a competitive market, rather than from government agencies under the control of Big Pharma. Above all, Americans for the first time in history would enjoy universal healthcare.

　　All told, individuals, families, employers, philanthropists, and civil society institutions such as HSA alliances would collectively become responsible for the community’s health. The federal government’s role would return to its constitutional limits for the first time in 60 years. A directed market would replace the current dysfunctional “system,” a monstrous creature born of corporate profit-seeking, bureaucratic bloat, and political power-seeking. The proposed reform would have the effect of depoliticizing healthcare policy, or at least bringing the politics of healthcare closer to those who use it and need it.

　　There would, of course, be major political obstacles from various entrenched interest groups, who can be counted on to inject fear into the public that they are “losing their healthcare” and that their health will be at risk without government or corporate insurance. Those who follow healthcare debates in Canada or the United Kingdom will be aware that having insurance doesn’t guarantee prompt or excellent healthcare, but the uninformed will undoubtedly be lured by the siren song of “Medicare For All” and other socialist nostrums.

　　One major industry that is bound to oppose this plan is America’s mighty insurance industry, which currently spends over $117 million on lobbying efforts. These companies would have to be offered a new role, repurposing their current activities. They might, for example, be consolidated into a few independent health assessment agencies. These would act like the three largest credit reporting agencies (Experian, Equifax, and Transunion) do now, as agencies closely regulated by Congress and the Treasury Department. Their job would be to compile independent actuarial tables to assess the health of individual Americans, to serve as umpires to evaluate the claims of drugs and treatments offered by pharmaceutical and medical research companies, and to ensure transparency. They could keep track of the spread of diseases and recommend investments in medical research. Individuals with exceptional healthcare needs could apply to have their needs assessed, so that available funds could be disbursed for needy cases. Needy individuals who met the criteria could receive care from HSA alliances or, in the worst cases, receive government catastrophic coverage. The existence of multiple agencies in competition with each other should help keep the system honest.

　　There will also, of course, be opposition from celebrities, publicity-seeking politicians, NGOs, and other pressure groups concerned with questions of social justice in healthcare. With their bias in favor of government solutions, they would surely oppose an ortho-liberal or directed market reform, where great differences in wealth between different populations might lead to unequal health outcomes. The problem, structurally, would be similar to the inequities that exist between inner-city school districts and school districts in wealthy suburbs. In my opinion, this is more of a political problem than an economic one, and finding solutions will be much easier, since in a new directed market there would be no entrenched unions to defend incompetence and privilege, such as exist now in public education. Detailed solutions to the remaining problems will have to be addressed by others. In the short term, however, social justice warriors could be invited to contribute some of their own wealth to healthcare funds for the poor and needy. If they continue to natter on about “equity” and equalization of outcomes, they could be asked: how much of your own or your organization’s resources have been spent on the poor and needy?

　　For too long, healthcare reform has been synonymous with heavy-handed government mandates and massive spending increases. Shifting political winds, however, might make room for common sense reform. The idea of a directed market—where economic freedom is combined with social welfare—is one that can bring together libertarians and populists alike, and perhaps offer a rare opportunity for popular, market-oriented reform that would stand as one of the most important policy initiatives in US history.