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Ditch the Political Gamesmanship -- How Entrepreneurship Can Fix Healthcare Instead of trying to replace Obamacare, let's let entrepreneurs play a prominent role in fixing our broken healthcare system.

By Per Bylund Edited by Jessica Thomas

Opinions expressed by Entrepreneur contributors are their own.


After a highly publicized failure to repeal Obamacare in March, Republican leaders have repeatedly said the battle is not over. President Donald Trump continues to push lawmakers to negotiate changes to the 2010 healthcare law, though it's not clear whether any legislation will have enough support to usurp the Affordable Care Act.

Related: How to Be a Successful Medical Entrepreneur

Instead of trying to replace Obamacare with a different version, we should let entrepreneurs play a prominent role in fixing our broken healthcare system.

Politicians have overlooked entrepreneurship as a healthcare solution because of an obvious bias against the market. As healthcare has evolved from a local and distributed service to its current highly centralized form, many people have assumed entrepreneurs and small businesses cannot provide these services. This centralization into huge hospitals and insurance companies is the result of regulations the government has placed on the industry. The enormous threshold to entering the market also means that incumbents don't face a lot of competition.

But entrepreneurship hasn't been a part of this discussion, and the stagnant healthcare field is in desperate need of innovation. Surely the brightest, most inventive minds in the world can help modernize this idle industry.

A distinct lack of innovation

Our healthcare industry is outright hostile toward entrepreneurs, pushing away people with skills, expertise and novel ideas in favor of tried-and-true methods. In market-based industries, anyone who invents a better way of doing something -- or a completely new product -- can start a business and compete with the incumbents. This is impossible in healthcare.

Entrepreneurs don't choose an industry because it's profitable; they typically have experience in their field that helps them recognize the opportunity to improve things. In healthcare, for example, we might expect innovations courtesy of specialists, general physicians, nurses and administrators.

Related: How to Become a Healthcare Innovator

Yet if these would-be entrepreneurs do not pursue their ideas, society loses out on that progress. Consequently, consumers will not enjoy improved procedures, treatments or medications. These ideas will remain unrealized (I wrote a book on this subject: The Seen, the Unseen, and the Unrealized) but won't be considered a loss, because they technically never existed in the first place. This lost potential is the true cost of not allowing healthcare to be entrepreneurial, and as a result, people suffer or even die because innovations never materialize.

How to carve out a niche in healthcare

Our healthcare system is so regulated that there's no way for entrepreneurs to simply enter the market and compete. Accordingly, they're unable to offer novel treatments or perspectives that aren't licensed.

That said, there are a few niches open to entrepreneurs who want to help healthcare move forward. Progress in these three areas could eventually open the field to larger innovation:

1. Start in nonmedical advice and health consulting.

Licensing, patents and FDA regulations are major problems in healthcare because they end up excluding alternative-care providers and treatments. "Alternative" does not denote bad -- it's simply a different path to health benefits.

For example, some common medications treat conditions vastly different from their original, intended purpose. Viagra was developed to treat high blood pressure and other heart conditions, but tests found that the medication had an unexpected effect on male reproductive organs. Penicillin was the result of a coincidence -- if not an accident: Medical professionals ridiculed Ignaz Semmelweis' pleas that physicians wash their hands before delivering babies until his idea saved numerous lives.

Imagine if these "alternative" treatments had not been allowed or licensed. The only way to discover new products and services is to allow entrepreneurs to develop and offer them to consumers.

Despite the insane amount of red tape, it's possible to bring innovation to the healthcare space via nonmedical routes. The medical field has prohibited things such as Dave Asprey's Bulletproof brand, Elysium Health's anti-aging pills and Mark Sisson's ancestral health, though these products are still offered as nonmedical treatments. Entrepreneurs could break new ground by avoiding outrageously expensive clinical trials and experimenting in the nonmedical realm.

2. Create an actual insurance program.

A recent study by the Congressional Budget Office found that 24 million people could lose their insurance by 2026 thanks to changes to marketplace rules, subsidies and Medicaid. Entrepreneurs could help close this gap by offering financing through proper insurance.

Healthcare is outrageously expensive because our government prohibits insurance -- we call it "insurance," but it's actually a third-party-payer system -- while regulating what should be covered, which treatments are legal and who can carry them out.

Consider the case of Sara Horowitz, who created the Freelancers Insurance Company after she was upset about the lack of insurance for freelance contractors in the U.S. The company lost money in its first year, but has since turned a profit while keeping premiums relatively low.

Note that any new insurance offering would need to take place outside the existing system, so it wouldn't be tax-deductible. This might seem daunting, but I believe entrepreneurs can dream up a solution that meets the needs of most consumers while turning a profit.

3. Cut out the middlemen.

Entrepreneurs should stop playing by the rules and dealing with the insanity of the insurance world. Instead, they can cut out the middlemen and offer treatments directly to consumers.

A great example is the Surgery Center of Oklahoma, which operates on a strictly private basis without involving insurance. Political rhetoric insinuates outrageously expensive prices for this sort of situation, though the surgery center wouldn't exist if it weren't a viable model. The doctors at the center offer high-quality work at reasonable prices. While a team of University of Iowa researchers found that hip replacement could cost a patient without insurance up to $125,000, the Oklahoma City-based surgery center charges a flat $25,000.

A decentralized healthcare system where providers offered services directly to patients would allow providers to treat diseases without ballooning costs. It could also fuel tremendous growth as medical professionals discover new solutions and offer them in the open market.

The endless gamesmanship over what to do with the Affordable Care Act shows no signs of slowing, but entrepreneurs could step in and potentially give healthcare the shot in the arm it desperately needs. Pushing alternative medicine, embracing nontraditional service models and creating functional insurance programs could make a tremendous difference.

Related: These 6 Powerful Innovations Were Created By Accident

By working outside the bounds of our current severely regulated healthcare market, entrepreneurs could push the industry forward -- and literally save lives.

Per Bylund

Associate Professor of Entrepreneurship

Per Bylund, PhD, is associate professor of entrepreneurship and Johnny D Pope Chair and Records-Johnston professor in the School of Entrepreneurship at Oklahoma State University. His areas of research are entrepreneurship, management and economic organization. He is author and editor of six books.

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