The financial crisis has led many to attack free-market competition. In health care, government certainly has a vital role to play in expanding coverage as well as improving quality, but so does a free, fair and functioning market. Just as we do in every other sector of the economy, we need to put the market to work in health care. A market-based system will transform our ailing health-care system to deliver more choices of greater quality care at lower costs.

We all know the current state of health care. Every year consumers pay more, with millions of Americans going without any coverage at all. Businesses both large and small are hemorrhaging under the weight of rising costs. The quality of care seldom seems to improve, and the waste and inefficiency in our system is breathtaking. This can be changed.

Consider the purchase of health insurance. Consumers are restricted to those insurance products licensed in each individual state, which are often dominated by one insurer. This means it is illegal for a resident of one state to buy insurance in another state.

These government barriers to free trade stifle competition, with disastrous results. The absence of robust competition artificially inflates the cost of insurance, preventing millions of Americans from purchasing affordable coverage. This shifts the cost burden to those who pay for insurance and to government programs.

To reverse this, competition must flourish. More competition among insurers in a nationwide market will encourage creative products, better services and lower prices — just as it always does wherever competition thrives.

There is a precedent for breaking down state-based markets. Until the 1970s, cross-state banking was illegal. A wave of regulatory reform in every state, and in Congress, dropped banking restrictions and led to the creation of a nationwide — better yet, global — ATM system where consumers could access their money anywhere, anytime. We will see similar success in expanding insurance coverage if market forces are allowed to work. Regulatory barriers on technology cause unnecessary struggles for providers.

Telemedicine is a way for doctors and hospitals to use technology to deliver better care and expand access to specialists, regardless of location. Videoconferencing with experts, transmitting images and records for second opinions, remotely monitoring patients, virtual emergency rooms and telepharmacy services can transcend state borders. For the most part, however, licensing barriers restrict technology to within state borders, meaning that both ends of a connection must be in the same state. State governments should seek agreements on how to reform these barriers to unlock the better care that patients can receive through this kind of technology.

According to a 2006 survey by America's Health Insurance Plans, 93 percent of Americans say they have the right to know more about the quality of care they receive. The best data available to prove this point is hidden in the Medicare system. Medicare's national claims history holds detailed information on nearly every doctor and hospital in the country, which can be analyzed to identify the most efficient hospitals, best doctors and most effective treatments. This information will save lives and save money now, but it is locked away by the federal government. Taxpayers must continue to demand the release of this data.

Alabama is moving in this direction. With final passage in the Alabama Legislature of Sen. Bobby Denton's Senate Bill 89, the "Mike Denton Infection Reporting Act," Alabama will require hospitals and other health facilities to report to the state Dept. of Public Health when patients acquire infections while being treated inside the facilities. (Denton lost his son, Mike, to a hospital-acquired infection.)

Florida takes this a step further, providing cost and quality data, posting drug costs and requiring reporting from hospitals. Dozens of other states are working on similar measures. We should expand these kinds of initiatives — and replicate them throughout the country.

Health care is the largest and most important sector of our economy. It is not irrevocably broken. It can be fixed if we eliminate mindless regulation and give the market an opportunity to work.

Michael Ciamarra is vice president of the Alabama Policy Institute and Fellow with the Center for Health Transformation. E-mail: michaelc@alabamapolicy.org. David Merritt is director of National Health Policy at the Center for Health Transformation.