 It's true that the US healthcare system is a mess, but this demonstrates not market but government failure. To cure the problem requires not different or more government regulations and bureaucracies as self-serving politicians want us to believe, but the elimination of all existing government controls. It's time to get serious about healthcare reform. Tax credits, vouchers and privatisation will go a long way toward decentralising the system and removing unnecessary burdens from business, but four additional steps must also be taken. 1. Eliminate all licensing requirements for medical schools, hospitals, pharmacies and medical doctors and other healthcare personnel. Their supply would almost instantly increase, prices would fall and a greater variety of healthcare services would appear on the market. Taking voluntary accreditation agencies would take the place of compulsory government licensing if healthcare providers believed that such accreditation would enhance their own reputation and that their consumers care about reputation and are willing to pay for it. Because consumers would no longer be duped into believing that there is such a thing as a national standard of healthcare, they will increase their search costs and make more discriminating healthcare choices. 2. Eliminate all government restrictions on the production and sale of pharmaceutical products and medical devices. This means no more food and drug administration which presently hinders innovation and increases costs. Costs and prices would fall and a wider variety of better products would reach the market sooner. The market would force consumers to act in accordance with their own rather than the government's risk assessment. And competing drug and device manufacturers and sellers to safeguard against product liability suits as much as to attract customers would provide increasingly better product descriptions and guarantees. 3. Deregulate the health insurance industry. Private enterprise can offer insurance against events over whose outcome the insured possesses no control. One cannot insure oneself against suicide or bankruptcy for example because it is in one's own hands to bring these events about. Because a person's health or lack of it lies increasingly within his own control, many if not most health risks are actually uninsurable. Insurance against risks whose likelihood an individual can systematically influence falls within that person's own responsibility. All insurance moreover involves the pooling of individual risks. It implies that insurers pay more to some and less to others but no one knows in advance and with certainty who the winners and losers will be. Winners and losers are distributed randomly and the resulting income redistribution is unsystematic. If winners and losers could be systematically predicted, losers would not want to pull their risk with winners but with other losers because this would lower their insurance costs. I would not want to pull my personal accident risks with those of professional football players for instance but exclusively with those of people in circumstances similar to my own at lower costs. Because of legal restrictions on the health insurer's right of refusal to exclude any individual risk as uninsurable, the present healthcare system is only partly concerned with insurance. The industry cannot discriminate freely among different groups' risks. As a result health insurers cover a multitude of uninsurable risks alongside and pulled with genuine insurance risks. They do not discriminate among various groups of people which pose significantly different insurance risks. The industry thus runs a system of income redistribution benefiting irresponsible actors and high risk groups at the expense of responsible individuals and low risk groups. Accordingly the industry's prices are high and ballooning. To deregulate the industry means to restore it to unrestricted freedom of contract, to allow a health insurer to offer any contract whatsoever to include or exclude any risks and to discriminate among any groups of individuals. Uninsurable risks would lose coverage, the variety of insurance policies for the remaining coverage would increase and price differentials would reflect genuine insurance risks. On average prices would drastically fall and the reform would restore individual responsibility in healthcare. 4. Eliminate all subsidies to the sick or unhealthy. Subsidies create more of whatever is being subsidised. Subsidies for the ill and diseased breed illness and disease and promote carelessness, indigence and dependency. If we eliminate them we would strengthen the will to live healthy lives and to work for a living. In the first instance that means abolishing Medicare and Medicaid. Only these four steps, although drastic, will restore a fully free market in medical provision. Until they are adopted the industry will have serious problems and so will we, its consumers.