John Cochrane, PhD: The Economics of Affordable Healthcare

In this conversation, Daniel Belkin and Mitch Belkin speak with Professor John Cochrane about the economics of the American healthcare system. We discuss the lack of clarity around US healthcare pricing, as well as how employer-sponsored health insurance and the persistence of massive cross subsidies contribute to dysfunction in the US healthcare market. Professor Cochrane argues that the best way to solve these problems is to simplify regulation and remove regulatory hurdles which prevent innovative entrants from improving healthcare and making it more affordable.

Who is John Cochrane?

Professor John Cochrane is an economist specializing in finance and macroeconomics. Formerly a professor at the University of Chicago, Cochrane is now the Rose-Marie and Jack Anderson Senior Fellow at the Hoover Institution at Stanford University. He blogs regularly as The Grumpy Economist at

0:32 - John Cochrane’s Background
3:06 - Is healthcare an economic good?
7:17 - Is demand for healthcare inelastic?
11:23 - Healthcare versus Health Insurance
14:17 - Original sin #1: Employer sponsored pre-tax dollars for health insurance
15:48 - Original sin #2: Massive cross subsidies for health insurance
16:45 - What is health status insurance?
23:34 - Loosening the regulatory environment for US Healthcare
28:48 - Why are healthcare prices hidden?
34:18 - Difficulties with substantively changing US healthcare
38:02 - How to provide health insurance for the poor in a free market system
42:19 - Milton Friedman's PhD on Occupational Licensing, Doctors, and Medieval Guilds
49:35 - Yelp and other Quality Metrics for Physicians

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