In healthcare economics, it is notoriously difficult to improve one factor without negatively impacting the others. The US system struggles to balance these three competing demands.
The US spends ~18% of GDP on healthcare (highest in the world). High costs are driven by administrative complexity, drug prices, and high utilization of expensive technology.
Medicare (Elderly) & Medicaid (Low Income).
Employer-sponsored insurance plans.
Out-of-pocket costs, deductibles, premiums.
Funding sources dictate buying behavior. Government = Compliance Focus. Private = Cost Control Focus.
Hill-Burton Act: Government funded hospital construction everywhere.
Focus: Access & Infrastructure. "Build it and they will come."
Model: Fee-For-Service (FFS). More volume = More profit.
HMOs & DRGs: Payers tried to control spiraling costs by limiting networks and capitating payments.
Focus: Cost Containment.
Result: Provider consolidation began to negotiate better rates.
ACA & Digital Health: Focus on outcomes, preventative care, and digital access.
Focus: Quality & Value.
Current State: Massive consolidation (IDNs), Consumerism, and AI adoption.