In the heated debate over how American health care should be reformed, the inadequacies of a system such as Great Britain’s NHS are often used as proof of the failure of a national health care system. The risk of such reasoning is that it fails to define the cause for those inadequacies.

In a system of supply and demand, efficiency is contingent upon innovation by the supply side. Innovation is driven by competition.

For example, when the demand side, i.e. consumers, made it clear that they really wanted their own personal computers, within two decades the supply side had innovated, cutting cost, increasing computing power and running out cheap, powerful, and eventually ubiquitous desktops. When the demand side suggested that it would like having a computer that could be carried around, the supply side panted a couple of times, then it geared up and kaboom—behold a laptop.

In health care, the supply side is comprised of doctors, hospitals, physical therapists—those who deliver the service of caring for patients. For 60 years Great Britain’s supply side has not had to compete. Rewards accrued regardless of how medical services were delivered. Without competition, innovation was regarded with a yawn and a nod of the head.

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