How to compete and better connect data will solve the billion-dollar problem of healthcare

Each year, nearly 530,000 Americans go bankrupt due to medical debt. This is about the population of Atlanta City. Worse, we spend more on health care than any other country, but the end result is still poor. The United States has always lagged behind other developed countries with key health indicators.

These are just a few signs of dysfunction in our healthcare system. Before we talk about fixing it, we need to be more honest with what we are facing. Obsession with problems is usually the first step in solving problems.

Throughout the system, data splits and lack of competition collided, making it nearly impossible for consumers to effectively understand or use their health insurance. At the employer level, most benefits still feel impersonal and disconnected even with increasing waves of AI-driven solutions. Costs keep rising and employees are left to navigate an expensive, confusing maze that doesn’t understand them and is not good for them.

The interest industry has broken down.

Long time ago, things were simple: you had a pension and a health plan, which was arranged through your employer, often taking personal walks with someone on a truck in the parking lot. Then there is a surge in a series of professional companies that provide more professional business scope. Over time, they began to rotate their business units and narrowed their focus to core services.

Fast forward to today and we’ve flooded thousands of (actually 13,000+) solutions. Medical, Dentistry, Vision, Accidents, Critical Illness, Disability, Pet Insurance, Identity Theft Coverage: They have all become pseudo-point solutions. It is a maze of disconnected services, rarely talking to each other and makes little sense to those who need them.

Imagine an assembly line where each machine runs on another operating system and no one talks to the person next to them. That’s our welfare system. Employers do not fully understand their workforce. The broker does not fully understand the employer. Everyone is putting products in isolation without a clear awareness of their help or how they merge together.

The result is hundreds of billions of dollars in waste. Most employees don’t know what their actual revenue costs. Some people don’t even know what services they can use. In many cases, they end up paying more than they do without insurance, as hospitals can charge up to 254% of employer health plans for the same service. And, because people don’t trust or understand the benefits they provide, they don’t have the motivation to share personal data that actually makes their benefits more useful.

Waste continues to become more complex. As premiums rise year after year, employers think their team should be lucky enough to be covered. But from an employee’s perspective, it’s usually felt like they were giving more and less. “Buyside” runs in the darkness.

Meanwhile, some players profited from the chaos. Opacity in care and prescription pricing helps large incumbents protect their profits while benefiting from transparency. Even if regulations try to force transparency, punishment is a disguise. One thousand dollars a day makes no sense to a billion dollar company. So they keep covering the ball and the system will be damaged.

We need to strip the system back to something simpler. People should be able to actually use the benefits paid. Companies that provide these benefits, whether they are insurance companies, providers, employers, or brokers, should really understand the people they serve. This clarity is not optional. It is the basis of trust, and it is now obvious that as a society we do not have it.

Not everyone wins. That’s the point.

There are two changes that can change the entire system.

First, we need to have real competition in certain areas. Second, we need to connect the most important data to one place. If we can do these two things, the entire market will improve. Not everyone will win, but good products, good distributors and good platforms will rise to the top.

• Direct competition: In most areas, employers and individuals have only a few health plans to choose from. Three, maybe four. The lack of meaningful competition limits quality and innovation and allows for a minimum of health planning. Looking ahead, we don’t need companies that offer “different” solutions for the sake of different things. We need more companies to do the same thing for the same population. True competition creates motivations to develop high-value services, stronger networks and more innovative payment models.

• Connected data: Healthcare should work like a phone or your favorite app and be tailored in one place. This happens only if people trust enough platforms to share their information. In return, they need to gain real value. Consider personalized suggestions, automatic insurance checks, and a smarter schedule. Once the trust loop begins, it builds. People share more, they get more rewards, and ultimately the system understands them without asking.

Getting there will require more than just articles. Health systems need to make interoperability a priority, not accompanying items. Insurers must provide real transparency, not just checking the compliance box. Employers should stop stacking on point solutions and start asking for an integrated platform. From day one, tech companies must earn trust by realizing transparent value.

This is better

The rewards for these changes will be significant. Simplified management will reduce overhead costs for the health system. Health plans can deploy more accurate pricing models and reduce claims volatility. With higher utilization, employers can see a higher return on investment in welfare services. Most importantly, employees and individuals save costs, improve navigation and better results. This will be a real capitalist market.

Arriving in the future will look and feel a lot like our 401K management method: by backstage experts, requiring minimal attention. Our benefits service will be operated through an AI-powered assistant that works behind the scenes to book a dental cleaning and confirm pre-insurance coverage.

We are not that far. But to get there, we need to stop building more noise and start rebuilding trust. Everyone deserves a system that benefits them, not against them.

Photo: Crazy, Getty Images

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