It’s as predictable as the sun setting in the West: it’s an election year and reforming how we deliver health care is on the political agenda.

Advocates on the left are pushing an agenda of “universal health care,” by which they mean taking steps toward socialized medicine.

Advocates on the right are unfortunately divided. Principled conservative intellectuals promote free markets and disdain government intervention in the marketplace, yet when it comes to health care there are few politicians who are willing to advocate reducing the massive government role that exists today. McCain’s plan outlines some important reforms, but would not likely reduce the amount of health care spending controlled by government.

Government essentially controls health care for older Americans and is making significant headway into controlling children’s health care through S-CHIP. Finally government subsidizes employer-provided health care—keeping control out of the hands of individuals. Overall, government directly or indirectly controls about 50% (some estimates reach as high as 70%+ including subsidies) of health care spending. Consumers directly control relatively little of the total health care expenditures.

It is the structure of that government role and the subsidies of employer health insurance that has helped drive up costs to unsustainable levels—about 17% of our economy is spent on health care, or about twice as much as other industrialized countries. What we are doing today doesn't work, and conservatives should be very afraid of new attempts to socialize medicine.

What we are seeing today is a slow-motion government takeover of health care, and it’s not pretty. Our current health care “system” works well for pretty much nobody. Costs are spiraling out of control—because of a system dominated by third-party payers--and Americans are getting more scared every day that a health crisis could bankrupt them.

Wading into this policy swamp is the Mayo Clinic with a proposal that has something for everybody to hate. Mayo is proposing a system that relies primarily on private funding and individual ownership of health insurance, but also one that blends a top-down structure that is intended to create the right incentives within the system.

Their proposal is pure Mayo Clinic. For anyone familiar with Mayo and how it has become one of the premier medical institutions in the world their proposal has a familiar theme: it’s the system, stupid.

Mayo’s strategy for excellence has never been to simply recruit the best or to be the most cutting-edge, but to build an integrated system that taken as a whole will consistently provide the best outcomes for patients. Mayo believes that the principles behind its own success are transferrable to the health care system as a whole.

It’s that philosophy that animates Mayo’s health care policy proposal. It begins with the recognition that America has no health care system, but rather an unworkable collage of government, semi-private, private, and individual providers and payers that don’t even talk to each other well today. Mayo’s plan is to impose some order over the chaos. And in the process try to hold down costs and improve quality. Continued...