Our healthcare affordability crisis is structural; solutions must change incentives and buying power

# The argument in brief Americans are outraged about healthcare costs. The op-ed argues the debate focuses too much on who pays rather than why prices keep rising. It presents the core claim that the U.S. has built a market where raising prices is easier than improving care or cutting waste. The proposed remedy is structural: shift incentives and give real purchasing power to major buyers so they can drive better prices and value.

# Why costs keep rising The United States spends $5.6 trillion on healthcare annually. Family premiums for employer coverage reached nearly $27,000 last year and have risen faster than inflation for several years. The op-ed identifies the root cause as market structure and incentives: hospitals, insurers, drug makers and others respond rationally to incentives that reward higher prices rather than efficiency or quality.

# Three levers to bend the spending trajectory

• Employers and private insurers pay hospitals on average 254% of Medicare rates for the same services. Prices vary widely across markets with little relationship between price and quality.
• When employers use data and smarter contracting, they have cut healthcare costs by as much as 20% in some cases. A modest 3–5% reduction could save $29–48 billion a year and free up money for wages and benefits.

• States act as regulators, employers and Medicaid administrators and together oversee about $860 billion in annual healthcare spending.
• A 3–5% improvement in state-controlled spending could save $26–43 billion annually.
• State authority can address consolidation and anti-competitive behavior: monopoly hospitals charge about 12.5% more than hospitals facing real competition. Addressing consolidation could reduce private health spending by roughly 2%, or about $30 billion yearly.

• Independent reviews of high-value digital health solutions for hypertension, musculoskeletal conditions and depression/anxiety suggest combined savings of about $4 billion across Medicare and Medicaid.
• AI and administrative automation hold promise for reducing spending, though the op-ed notes that potential is largely unrealized and depends on deploying tools that produce measurable value.

# What actionable steps the piece highlights

• Employers should demand independent data, analyze claims, and negotiate contracts based on value rather than historical relationships. Smarter purchasing can deliver immediate, substantial savings for workers and employers.
• States should use regulatory authority to curb anti-competitive practices, adopt stronger market oversight, improve procurement for Medicaid, and push performance-based contracting. As large payers and purchasers, states can extract better prices and outcomes.
• Payers and government programs should pilot and scale evidence-based digital care models and administrative technologies that reduce costs for common chronic conditions and streamline back-office spending.

# The bottom line The op-ed frames healthcare affordability as a structural market problem. The proposed path is not simply shifting who pays or expanding subsidies indefinitely. Instead, it calls for returning real buying power to major purchasers—employers, states and public programs—and changing incentives so lower-cost, higher-value options become the rational choice for suppliers and payers.