“Not a Fair and Open Market” John Arnold on Health Care Reform at Forbes 400 Philanthropy Summit

Ambulance sirens are a well-known signal of a health care emergency. For John Arnold, out-of-control costs were the alarms signaling the emergency of a broken market that sparked AV’s health care research and policy work. 

In a candid exchange at the 12^th annual Forbes 400 Summit on Philanthropy in New York City, John Arnold talked about how he and his wife, Laura, first began directing their philanthropic support toward research into health care affordability, and what that work looks like today. 

“If you think about the market failures, health care has every one of them,” he told moderator Katie Couric. Arnold shared the stage with Cynthia Fisher, founder of Patien​tRight​sAd​vo​cate​.org and advocate for health care price transparency. 

John explained for the audience of philanthropists that inherent imbalances in the market made health care a key portfolio for Arnold Ventures’ data-driven research and advocacy work. 

“We’re talking about a lack of transparency [in health care], the fact that most of it is paid for by a third party; the information asymmetry between provider and the patient; the concentrated benefits of diffuse costs – all of these market failures,” he said. 

John specifically pointed to problems caused by increased concentration and a lack of competition. 

“You used to have single-site hospitals that were independent, and you had doctors’ practices that were three docs together in an office,” he said. ​“Now there’s been over the past 20 or 30 years the financialization of health care – and private equity has had a fair amount to do with it … where that three-doctor practice is now part of a couple hundred or a couple thousand practice.” 

As a result, John said, most Americans live in places where health care is provided by monopolies or duopolies that can effectively set their own prices, resulting in dysfunctional markets. 

“You either have to have very strong regulations about what the price can be, because it is not a fair and open market, or you’re going to have costs that just go out of control,” he said. 

The panel was part of an event that convened more than 100 of the world’s top philanthropic leaders to discuss ways they could address some of the world’s most pressing problems. This year’s theme was ​“New Ideas: Breakthrough Thinking for Impactful Change.” 

Watch the video to hear John’s insights on how philanthropy can drive transformative change in health care.