Winning at the Wrong Game

As an industry, hospitals and doctors are winning at the wrong game.

The system largely performs as it is incented to perform. It pays far more reliably for downstream intervention than upstream prevention and produces world-class medical care after people are sick.

What it does not reliably produce is health.

Despite spending roughly twice as much per person as our peers, we continue to see high rates of preventable chronic disease, mental health crises, substance use, and premature death. Even when national life expectancy averages improve, they conceal extreme variation by income, race, and geography, and the U.S. continues to lag peers on preventable loss.

That data reveals a deeper truth: too many Americans are living longer years in poorer health, and too many never reach old age at all.

The issue is not effort. It is alignment. We have built an industrial-scale engine for acute rescue care and then expect it to behave like a health system. It can’t. And it won’t.

Meanwhile, affordability has hit a wall. Employers and consumers are tapped out. Public subsidies are politically fragile. Every year, more people are technically “covered” but practically priced out of care when they need it most.

Hospitals can rescue and stabilize. But they cannot produce health at scale without the right community partners, behavioral health capacity, and primary-care-led longitudinal models.

Rising rates of chronic disease, depression, addiction, violence, and despair are not medical access and quality execution failures. They are design gaps and resource challenges in the effort to address upstream conditions, provide longitudinal support, and build behavioral health capacity.

Here is the uncomfortable reality: we are trying to finance health through a system that only gets paid when people are sick. But if we continue to rely on downstream medical fixes to compensate for upstream dysfunction, costs will keep rising, outcomes will remain uneven, and trust in the system will continue to erode.

This is not a question of incremental improvement.

It is a question of whether we are willing to redesign a system built for treatment into one capable of producing health. Critically, can we engineer that redesign before the economics, the workforce, and the public lose patience entirely and deconstruct the science-based platform that most people still believe to be sound?

The warning signs are already flashing red.

We must plan for a world where public financing is more conditional through tighter eligibility, reimbursement pressure, and periodic subsidy cliffs because the fiscal and political tolerance for open-ended growth is shrinking. The direction of these changes will require that health systems live within macro financial constraints.

Prevention and value-based care have not scaled to population-level impact because the business model, time horizons, and unit economics keep pulling the system back downstream, often starving well-intended programs of critical resources. As a result:

• Medical spend trends have not meaningfully bent
• Chronic disease prevalence remains high
• “Wellspan” (years lived in good physical and mental function) hasn’t improved in a way that matches the rhetoric.

Where value-based care works, it works because it changes the operating system, the care model, incentives, data, and accountability. Where it fails, it’s treated like an overlay on a high-powered medical-industrial machine that continues to make money when people are sick and downstream.

This is what frustrates the advocates for value-based care. We are trying to run a wellness strategy inside an illness business model. The warning signs say it is not working.

In terms of flashing warning lights, it is clear that when life is stressed, time is scarce, and healthy options are inconvenient, consumers rationally choose fast, financed (insured) solutions. Consider the demand signals that drive purchase behaviors:

• “I’m overwhelmed; give me something that works fast.”
• “I don’t have time; make it convenient.”
• “I want results; I’ll take the drug, procedure, or device.”

We don’t have a willpower problem. We have a default-design problem that makes the more expensive solution often the easiest solution for an overwhelmed customer base, and the reliable source of revenue and margin in a fee-for-service based economic model.

Pharmaceutical and procedural solutions are not inherently bad. Some are high-value and lifesaving. But we should be honest that we have drifted toward a model that treats the downstream consequences of upstream dysfunction at scale and at premium prices.

That is not a sustainable national strategy. That drift is not accidental. It is the predictable outcome of how we finance, design, and deliver care.

When health is difficult to access, inconsistently supported, and poorly reimbursed, and while downstream medical intervention is convenient, billable, and reliably financed, the system teaches consumers exactly how to behave. Over time, we normalize complexity, delay, and frustration on the front end, while making rescue care the most navigable path through the system.

We even hang a bright red light over the front door that reads “Emergency Department”.

The result is a quiet but powerful form of rationing. It is not consumer preference. It is what happens when the system makes the ED the only guaranteed front door.

We increasingly ration care not by clinical need, but by friction and price. Access is fragmented. Primary care is scarce and rushed. Mental health remains difficult to obtain. Prevention is inconsistent. And, predictably, the path of least resistance through the system is often the most expensive downstream path through the ED.

When outcomes fall short, the industry’s reflex is to explore the impact of “noncompliant consumers.” But this confuses symptoms with causes. The system is not failing because people lack motivation; it is failing because it is designed to intervene late rather than support health early.

Layered on top of this dysfunction is the accelerant of price. In many markets, unit prices and administrative overhead overwhelm incremental utilization gains. We cannot care-manage our way out of a price problem

The Decision Point: From Insight to Action

Calling this a “decision point” sounds cliché, but the reality is harsher: we are well past the point of diminishing returns on the model as currently incented and designed.

The economics are tightening, the workforce is strained, and consumers are clearly signaling that friction and complexity are no longer tolerable.

If we want different results, we cannot lecture consumers into healthier lives. We must redesign the economics and experience of care so that the healthy choice becomes the easy choice, the supported choice, and the obvious choice. Not the one that requires the most time, navigation, and sacrifice.

That conclusion demands executive-level decisions, not programmatic tweaks. Leaders must ask and answer high-impact questions that convert strategy into operating reality:

1. What are we optimizing for—volume of services or production of health?

What outcomes will we hold leadership accountable for (avoidable admissions, chronic disease control, behavioral health access, wellspan proxies), and what will we stop doing to resource those efforts.

2. Where are we currently rationing high-value care through friction and how fast will we remove that friction?

In primary care, behavioral health, and chronic disease management what are our current wait times, handoffs, prior auth burdens, visit capacity, and out-of-pocket barriers? What is our plan to make access predictable?

3. Are we making the right care the default front door—or forcing the ED to be the default?

What must be true for a consumer to reliably get same-day guidance and next-day access? If a patient calls today, where do they go (really)?

4. What low-value utilization are we still subsidizing by design, and how will we stop?

Which services, sites of care, and patterns of use persist because they are convenient for the system—not valuable for the patient—and what incentives, benefit design, and clinical pathways will we change?

5. Will we treat behavioral health and addiction as core infrastructure or a carve-out we manage around?

What is our minimum viable infrastructure (collaborative care, MAT access, crisis response alternatives, integration into primary care), and what “must-do/can’t-fail” commitments are we willing to make?

The trajectory is clear. If we do not build a system that produces health by making it convenient and affordable for consumers to choose high-value care early, we will continue paying a premium to treat downstream sickness late. The question in front of every leader is whether we will keep financing the status quo or aggressively redesign it?

J. Michael Eaton — SVP, Healthcare Strategy, Nexcurve

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