Future of Healthcare

As part of the Future of Texas series in partnership with Texas 2036, this episode tackles one of the most urgent and personal challenges facing Texans today: the rising cost of healthcare. Through the Future of Texas podcast series, Texas 2036 brings together diverse perspectives as we explore the opportunities and challenges facing our state over the next ten years. The views expressed in this program are those of the individual speakers and do not necessarily reflect the views of Texas 2036, its staff or its Board of Directors. Host Brad Swail is joined by Avik Roy, Co-Founder and Chairman of FREOPP, and Charles Miller, Director of Health and Economic Mobility Policy at Texas 2036, for a deep dive into why healthcare costs keep rising — and what Texas can actually do about it. The conversation begins with a stark reality: healthcare affordability has become a top concern for voters, even surpassing issues like property taxes. With employer-sponsored family coverage approaching $27,000 per year and out-of-pocket costs averaging around $10,000 annually for Texas families, the financial strain is reshaping both household budgets and business decisions. A major theme is how the current system distorts incentives. Rather than functioning as a true free market, U.S. healthcare operates as a heavily subsidized system where consumers often lack visibility into prices — and have little control over spending decisions. The discussion covers: • Why healthcare costs are rising faster than wages and inflation • How employer-based insurance distorts consumer incentives • The role of federal tax policy in shaping today’s system • Why “free market vs government” is a false choice • The importance of competition, transparency, and aligned incentives • How monopoly power among hospitals and providers drives prices higher • Why past reforms — like surprise billing laws — sometimes backfire • The impact of vertical and horizontal consolidation in healthcare • How anti-competitive contracting limits consumer choice • Why Texas has made progress on transparency — but more is needed The episode also explores solutions that could reshape the Texas healthcare landscape. These include expanding price transparency, tackling provider monopolies, enabling more consumer-driven insurance models, and supporting innovative alternatives like direct payment systems and healthcare sharing models. Roy and Miller highlight promising developments already underway in Texas, including efforts to improve data transparency through all-payer claims databases and reforms targeting anti-competitive practices in provider contracts. Looking ahead, the goal isn’t perfection — it’s progress. Both guests emphasize that simply slowing the growth of healthcare costs to match inflation would represent a major win for Texas families and businesses. The takeaway is clear: the tools to fix healthcare affordability exist — but meaningful reform will require aligning incentives, increasing competition, and taking on entrenched interests within the system. 00:00 — Intro + Future of Texas series overview 00:30 — Why healthcare affordability matters now 01:13 — Cost of employer-sponsored coverage explained 02:00 — National vs Texas-specific cost challenges 03:12 — Texas vs California healthcare cost comparison 04:21 — Why affordability is now a top voter issue 05:21 — 53% cost increase over the past decade 06:41 — Why Texas policy drives higher costs 07:28 — Surprise billing reform and unintended consequences 08:24 — Incentives that drive price inflation 09:53 — Free market vs government: a false debate 10:14 — Why U.S. healthcare isn’t truly a free market 11:17 — Employer-based insurance and tax distortions 12:23 — Why consumers don’t behave like shoppers 13:23 — What a “healthy market” actually requires 14:17 — Transparency, competition, and incentives explained 15:25 — How subsidies can increase costs 16:09 — Insurance incentives and rising premiums 17:19 — Lack of price transparency in real-world care 17:58 — Switzerland as a model system 19:10 — Competition vs monopoly power in healthcare 20:29 — Real-world example: pricing distortions 21:42 — Hospital consolidation and market power 23:04 — Hospital Competition Act explained 25:02 — Why regulators struggle to fix consolidation 27:08 — Federal vs local enforcement gaps 29:33 — What Texas has done right so far 30:13 — Transparency reforms and data systems 31:05 — Anti-competitive contracting reforms 32:33 — Vertical integration and its risks 34:07 — What Texas still needs to fix 35:14 — Consumer-driven insurance models (ICHRA) 36:01 — Alternatives to traditional insurance 37:26 — Cash pricing and