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 cost savings
38:04 — State employee health plans as a reform lever
40:31 — What success looks like by 2036
42:10 — Slowing cost growth as the first win
43:18 — Final thoughts + closing
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