THIS MONTH ON Health or Consequences, we shake things up a bit. Paul Hattis of the Lown Institute interviews his usual cohost, John McDonough of the Harvard School of Public Health, on his new book, “America’s Wrong Turn: US Health Care in the Neoliberal Era,” due out August 11 from Johns Hopkins University Press.

The conversation opened with McDonough laying out his central claim: America’s uniquely expensive, uniquely underperforming health system didn’t just result as an accident of history — but was the predictable result of a specific ideological turn taken in the early 1980s — the start of the neoliberalism era. With Milton Freedman as its key intellectual leader, the philosophy favored deregulation and a belief that market actors working to maximize profits and shareholder value through competition. And it prioritized efficient markets and maximizing consumer value — all the while minimizing government’s oversight role and avoiding inefficiencies from government getting in the way.

Hattis and McDonough discussed the mechanics of that shift — how an abstract economic philosophy actually becomes concrete health policy. McDonough traced it through a mix of legislative choices, agency deregulation, and a slower erosion of the assumption that health care should be treated differently from other markets. He argued the shift was less a single dramatic law than a decades-long accumulation of smaller decisions, each one making the next easier to justify.

McDonough noted that under this framework industry consolidation was justified — so long as it lead to lower prices for consumers. Starting in earnest in the 1990s, consolidation led to once-independent, mission-driven institutions being folded into larger systems chasing scale and negotiating leverage. Over the last 40 years,  McDonough argues, government has for the most part avoided use of antitrust laws to stop consolidations in health care — even though the evidence is only that prices and spending rise with no real impact or even slight worsening on measures of quality.

Private equity got its own extended segment, with McDonough calling it perhaps the purest and most aggressive expression of the financialization he chronicles — the point where health care delivery became explicitly treated as an asset class. He distinguished it from earlier waves of consolidation by its shorter time horizons and its focus on extracting returns rather than building durable institutions.

John McDonough’s book, “America’s Wrong Turn: US Health Care in the Neoliberal Era,” is published by Johns Hopkins University Press. It will be available August 11.

On this episode, McDonough and Hattis break down the fundamental argument of McDonough’s new book and his thinking behind it (4:44); discuss the rise of neoliberalism in the US and its role in the country’s health care affordability crisis (14:41); and consider  whether or not the US health care system has escaped neoliberal influence (27:26).