American Healthcare … innovative, costly, sick … broken.

The American healthcare system is undeniably at the forefront of discussions these past few weeks.? Americans are angry and the pitchforks have been raised at the insurance carriers.? But the carriers aren’t the only ones that hold some of the blame.? ??

As someone who works in the industry and is passionate about serving organizations and their healthcare needs, I’m frequently asked, “How do we fix healthcare?” My response back is often, “How much time do you have for my answer?”

I’m by no means an expert on the system, but years of experience have allowed me to piece together a bigger picture. A picture that includes a very sick population, providers with no knowledge or control over making a population healthy again, carriers and PBMs with misaligned incentives, and 1/4th of the American GDP at stake.

Here’s a few of my thoughts on what is broken and the potential to move the needle.

Let’s dive in…

First, the obvious: the American population is profoundly unhealthy.

In fact, we’re the sickest first-world nation. Ironically, despite our poor health, we also have access to the most innovative and advanced healthcare system in the world. So, how does this make sense?

Our lifestyles are a big part of the problem. America has been conditioned to live fast-paced lives. As such, we prioritize convenience over health—commuting by car, relying on fast food, experiencing high levels of stress, and getting little sleep. Our busy lives are supported by an abundance of shelf-stable foods with additives and preservatives, along with a growing reliance on medications to treat the resulting comorbidities—stress, anxiety, blood pressure, cholesterol, diabetes, and more.

Stats reveal a larger problem: 75% of Americans are overweight, and 42% are obese. With this reality in mind, it’s no surprise insurance carriers and employers are limiting access to GLP-1 drugs, which can cost $12,000-$15,000 per person annually. If we conservatively estimate that 30% of the overweight population were to use these drugs, the total cost would amount to a staggering $1.247 trillion—an expense that could be addressed with proper lifestyle changes.

Other costs of obesity lead to billions in realized expenditure each year as obesity significantly increases the risks of chronic conditions such as cancer, diabetes, heart failure, and Alzheimer’s disease. To put the cost into perspective:

• Diabetes costs the U.S. $306.6 billion in direct medical expenses each year.
• Heart failure is expected to cost over $70 billion by 2030.
• Cancer costs the nation $190 billion annually.
• Alzheimer’s costs around $100 billion annually.

In America, it’s expensive to be sick.

But if the population is so unhealthy, why aren’t doctors fixing it?

Let me be clear: I don’t believe doctors are intentionally trying to harm the American people. However, there are several factors driving us toward even worse health.

A key factor is the fee-for-service model, where healthcare providers earn more money by seeing more patients and offering more services. This system incentivizes quantity over quality, resulting in shorter appointments, less personalized care, and fewer opportunities for comprehensive discussions. In many cases, this leads to missed diagnoses and a lack of focus on preventative care.

Think about it: When a patient visits a doctor, the interaction is often quick. The doctor may diagnose a condition and prescribe a pill. They may prescribe a pill because the patient is resistant to a lifestyle conversation.? Maybe there are kickbacks from the pharmaceutical company.? Maybe they want this patient to come back regularly, or maybe it’s because it is just the quickest form of treatment.? Either way, it seems more doctors are prescribing pills for chronic comorbidities than addressing the cause in the first place.? And while pills manage symptoms, they rarely cure chronic conditions. In most cases, the patient’s health continues to slowly deteriorate over years or even decades.

A recent podcast with Peter Attia, a former oncologist turned wellness advocate, highlighted another issue. He revealed that during his medical education, he only had one nutrition class. This means doctors treating cancer and other chronic diseases may have minimal knowledge about the role that nutrition and exercise play in both preventing and curing these conditions. Lack of knowledge makes them even more reliant on western medicine.

And thus, we stay sick as a population.? We just manage our symptoms.

Coincidentally, the sicker we are, the more dollars we spend, which leads to more profit for carriers.? Let’s discuss misaligned incentives.

It’s no secret that insurance carriers are driven by profit. This is America.? Any organization that is for profit answers to shareholders that are looking for that profit. It feels off when you tie profit and healthcare together, but it does drive our healthcare system forward.? We have better hospitals, better doctors, better drugs, better therapies, better research … all because we profit.? That is capitalism, capitalizing at its finest.?

Here lies the issue …

Under the Affordable Care Act (ACA), insurance companies were required to adhere to medical loss ratio (MLR). MLR limits carriers from charging more than 20% of each premium dollar spent for administrative costs. For example, if $.80 of a premium dollar goes toward claims, the carrier is allowed to charge up to $.20 for administrative costs.

So if I’m an insurance company that needs to make profit, I can either try to reduce my admin spend significantly or allow more claims dollars to be spent. This scenario creates a misaligned incentive to avoid efforts that would make the population healthier, such as value-based care systems in lieu of fee for service systems.

Furthermore, many insurance companies have acquired pharmaceutical benefit managers (PBMs), which have no such MLR limits, diversifying their income and allowing for other avenues of profit.?

Now tie these factors together.? A sick population, providers who either don’t know how to treat it or don’t treat it, and a healthcare system that seemingly profits from it.? It is the perfect storm.? Where do we go from here?

A few weeks ago someone posted a question on Linkedin asking which do people dread more, the DMV or healthcare.? The resounding answer was the DMV.? Now imagine a government that runs both.?

I am personally not in favor of the government running our healthcare system. For two reasons:

First, I don’t like the idea of someone telling me I cannot go to the doctor.? Not just that they won’t pay for it, but that it’s not an option.? Most Americans will agree, we don’t like the government meddling in our business, in our money or in our health.?

Secondly, the government hasn’t done a great job with Medicare.? It’s complex, confusing and it’s NOT FREE.? In fact, when you add up your individual premiums for Part B, a supplemental plan and a part D prescription benefit, you’re likely paying anywhere from $600-$900 per month per enrollee.? That’s assuming you don’t fall into the high-income earning bracket and your Part B premiums go up. This also doesn't include your payroll taxes that go towards Part A.

I don’t think allowing the government to run our healthcare system is the right answer.? Additionally, the innovation of the American Healthcare System serves the entire globe. This certainly would not remain the case with a government run healthcare system.? We might be paying for it, but we have the best in the world … and that means something when you need it.

So what can we do?

I believe it takes a radical approach to move the needle where all sides of the equation are involved.? If I were the President of the United States and knew my healthcare system was on the brink of imploding, here is what I would do.

• Require the carriers to divest of the PBMs.? It’s monopolistic, it controls the market, and it creates a massive conflict of interest.

• Turn the food system upside down (starting with the FDA). Additives, preservatives and sugar would be highly regulated, and our food chain would start to look more like Europe and less like a gas station snack isle.?

• Allow carriers to upcharge employers with a predominantly obese workforce. This would be based on metrics like BMI and body fat percentage.

• Allow employers to introduce upcharges for employees with high BMI and BFP, similar to how we treat tobacco users on insurance plans.
• Make CGMs (continuous glucose monitors) more widely available to the general population and not just diabetics.

• I’d push states to implement healthy eating programs in schools and eliminate sugary foods from elementary and middle school cafeterias. ***For context, I had no idea my Kindergartener was purchasing chips and ice cream every day the first month of school.? Why does a five-year-old get to make that decision in the lunch line?

• Urge medical schools and professional programs to overhaul their curricula to include nutrition and physical fitness as essential components of medical education. This should be integrated into every discipline, not just for wellness advocates.

While there’s no guarantee these reforms would fix the system, I believe they would be a start. Collaboration across all sectors is needed to figure out how we move the needle and sustain the cost of healthcare.

It would probably take decades of reform, policy and platform to truly fix everything that is broken, but the real question is: are we ready for it?