We need to implement solutions now to avert a healthcare crisis

Dr. Pearl’s recent post predicting a “massive healthcare crisis” is right on point. He offers compelling evidence of the crisis’s likelihood and wisely acknowledges that no one knows how our society will ultimately respond. He outlines three plausible scenarios:

• Private equity–driven cost cutting

• Generative AI transformation

• Crisis-induced disruption

These are all credible possibilities. I would add two important considerations:

• The longer we delay implementing meaningful solutions, the more drastic and painful those solutions will become. We need urgent, realistic action. Slashing Medicaid coverage does not address the root problem. Instead, we must reform how we pay providers.

• Our current coding-based payment model undermines the value of cognitive services—primary care, mental health, palliative care, and gerontology. This system not only weakens these essential services but also wastes money. We should be allocating 15–20% of healthcare dollars to these core areas, not less than 5%.

Viable solutions exist - we just need the courage to implement them. For more information on these ideas, visit www.the journeys-end.org.

The Root Cause of America’s Healthcare Crisis

A response to Anna Eisenberg’s “Deep Dive” Eisenberg’s six-part Deep Dive into the U.S. healthcare system is a well-researched and timely summary of the urgent challenges we face. Many of her points are well-known but bear repeating:

• The U.S. spends nearly twice as much on healthcare as other advanced nations, yet our outcomes are worse. Meanwhile, 10–15% of Americans remain uninsured. Experts have long warned that the Fee-For-Service (FFS) payment model drives up costs and fragments care. As the article notes, “FFS is the primary driver of both high costs and fragmented care.”

• The leading alternative, Value-Based Care (VBC), has seen limited uptake and hasn’t fundamentally changed the system.

• Administrative burden is crippling healthcare. It costs over $1 trillion per year—roughly 25% of total U.S. healthcare spending—and is a key source of provider burnout. The main culprit is our convoluted medical coding system.

• Chronic illness, driven largely by lifestyle choices (e.g., a 42% obesity rate—double that of other advanced nations), continues to rise, particularly among the elderly.

• Medicare faces insolvency by 2033, compounded by the aging population—the so-called “Silver Tsunami.”

• U.S. policy has prioritized specialization and innovation over essential care. As Eisenberg writes, “The U.S. excels in high-tech services… but fundamental services like Primary Care… are underfunded and understaffed.”

• Medicare Advantage, the private-sector alternative to Medicare, is under federal investigation for care denials and costs 22% more per enrollee than Traditional Medicare—again due to manipulation of the coding system used to set premium payments.

Eisenberg also touches on possible reforms:

• “The future of America’s healthcare will be decided on a political battlefield… Powerful lobbying forces defend a profitable status quo.”

• “The financial trajectory is unsustainable.”

There is growing consensus around a new social contract for healthcare. Encouragingly, public support for serious reform is rising. But one central issue receives too little attention: coding.

Look closely at the reasons for our primary care shortage, fragmented system, rising costs, physician burnout, Medicare Advantage overpayments, and insurers’ ability to deny care—all roads lead to coding. This system was designed to measure and pay for care, but it has instead become an engine for inefficiency, fraud, and burnout. It rewards volume over value and creates a bureaucratic nightmare for providers and patients alike.

We must move toward simpler, outcomes-focused payment models—ones that reward actually caring for patients, not maximizing code entries. Likewise, we need new methods for adjusting insurance premiums that don’t depend on coded data games.

Viable alternatives exist. To learn more about healthcare reform that prioritizes people over paperwork, visit www.thejourneys-end.org.

Is corporatization the real problem in healthcare?

The recent New England Journal of Medicine article, “Defining Health Care Corporatization,” provides a valuable historical overview of the increasing corporatization of American healthcare. The authors argue that this trend has had growing negative effects on patients, caregivers, and overall costs. It’s hard to disagree: U.S. healthcare is at a low point for nearly all stakeholders, including taxpayers—just look at the contentious budget debates over Medicaid.

But is corporatization the root cause of these problems? I would argue it is not. Rather, corporatization is a response to the economic incentives embedded in our healthcare payment models. These models—characterized by complexity, fragmentation, and perverse incentives—encourage overtreatment, profit maximization, and even fraud.

While the article calls for process-based, bureaucratic reforms, it largely misses the central issue: the payment system itself. Fee-For-Service (FFS) payments drive overutilization. Layered on top of FFS is a baroque coding system used not only to determine reimbursement but also to set insurance premiums and capitation rates. The abuses of this system are clear in the case of Medicare Advantage plans and the private equity takeover of hospice care—both of which exploit coding to increase revenue rather than improve care.

What has all this complexity produced? A billing system that costs nearly $1 trillion annually, consuming 20% of all healthcare spending. Worse, it contributes almost nothing to patient outcomes and is a major source of caregiver burnout. It burdens clinicians with excessive documentation and discourages essential, non-billable activities like coordination of care and meaningful patient conversations.

The solution is not more regulation or more codes. It’s a fundamental redesign of how we pay caregivers. We need a simpler, value-aligned payment system. Insurers should move toward salary-based compensation, just like most sectors of the economy. Paying physicians fairly and predictably would reduce incentives for overtreatment, streamline administration, and support better care coordination.

Real reform begins with fixing the incentives. For a detailed proposal on how to implement this change, visit www.thejourneys-end.org.