Zeev Neuwirth: How to unravel our nation’s wicked healthcare problem

Our nation’s healthcare system is grossly underserving the American public and is on an unsustainable course. Over the past two decades, the healthcare system’s value proposition has continued to decline around critical metrics such as access to care, affordability, chronic disease burden and healthy lifespan.

While these facts are well known, what is less well known yet well documented is the devastating and escalating financial burden that healthcare has imposed on Americans.^a

The dire situation has also now been corroborated by HFMA’s Vitalic Health tracking tool (described in the cover story of the December 2025-January 2026 issue of hfm), which indicates that the U.S. healthcare system is currently in “serious” condition.

Despite countless attempts, improvements in the nation’s healthcare and health have remained elusive. We need new and different ways to understand and solve the core systemic problems.

Healthcare’s wicked problem Defined and addressed

U.S. healthcare’s dilemma has long proven intractable. The social sciences have referred to such challenges as wicked problems, defined as being multidimensional, ambiguous, interdependent, continuously morphing and self-propagating. Such challenges cannot be addressed through what is called a first-order approach, which seeks to solve problems using traditional linear, technical fixes. Instead, solving them requires a second-order approach, which is collaborative, multistakeholder, adaptive and iterative.^b

Our healthcare system’s poor record on access, affordability and health outcomes can be attributed to the nation’s medical industrial complex (MIC), defined by the interwoven triad of three major traditional stakeholder groups:

• Providers (e.g. hospitals, health systems, physician groups)
• Industry (e.g., insurance companies, pharmaceutical manufacturers, pharmacy benefit managers, venture capital and private equity)
• Government

At the heart of this wicked problem is a reality that we must explicitly recognize and address: the powerful interdependent entrenchment of the MIC stakeholders. Only by addressing this roadblock head on with second-order thinking can we begin to find solutions to reverse U.S. healthcare’s substantial deficiencies.

While fixes such as policy reforms, operational efficiencies, clinical discoveries, data analytics and digital tech advances are all necessary, they are not sufficient. What is required is a radically different approach. To unwind this opaque, collective industry entrenchment we must organize an approach that:

• Engages MIC stakeholders in collaboration with other industry leaders
• Aligns financial incentives and business models with value-laden outcomes
• Rebalances short-term gain with sustainable longer-term success

How will we get there?

HFMA’s Vitalic Health tracking tool defines the critical metrics of a high-functioning healthcare system and provides a quantitative assessment of current reality. It’s a good starting point. But while tools like the Vitals Tracker highlight the problem, they can have little actionable impact unless MIC stakeholders are willing to come together with agreement upon guiding principles and collective action.

Guiding principles: reframing the core problem and how to solve it

This collaborative effort should be founded on three reframing principles.

1 The American healthcare dilemma was created within the MIC, so the MIC must play a pivotal role in solving it. It is naive to expect that we could create optimal solutions without the engagement and contribution of the MIC stakeholders. Previous attempts at imposing transformative change without the active engagement of MIC stakeholders have failed.

2 Instead of blaming self-interest and the profit motive, we should pursue an approach that aligns U.S. healthcare’s market drivers with more value-laden outcomes. The industry is dominated by titanic stakeholders with huge self-interests and profit motives. The enormity of the financial incentives is almost incomprehensible, with an annual spend of over $5 trillion. Consider that if the U.S. healthcare system were a national economy, it would be the third largest in the world, just behind the United States and China.^c We must introduce market mechanisms that redirect these huge forces rather than deny them. These mechanisms include changing the perverse and conflicting incentives that cause MIC stakeholders to lose sight of the need to create optimal value for customers (i.e. employers, municipalities and patients).

3 We need to identify positive deviance in our healthcare system and collaborate with organizations that are demonstrating transformational approaches. Numerous proven business models in the healthcare market are delivering superior value and outcomes. Positive deviance is an approach recognized in the social sciences for identifying these outliers and adapting and scaling them to solve widespread problems. There also are numerous organizations and coalitions that have been working to drive value-enhancing approaches, incentives and outcomes. These coalitions, largely representing employers and quality forums, could serve as exemplars and partners in driving change from within the MIC.

Convening a long-term consortium

In addition to adopting guiding principles, we need to convene a long-term consortium to engage in a collaborative approach that is embraced by multiple stakeholders and with minimal distraction from polarizing partisanship or finger-pointing.

Because all stakeholders played a part in creating this wicked problem, all must participate in the effort to solve it. They must be willing to collectively apply second-order thinking and engage in high-integrity dialogue, strategic planning sessions, phased-in deployments and iterative course corrections.

One way to think about this consortium is as a negotiated deal — perhaps the most historic and complex negotiation the industry has ever seen — that will require years to work out in multiple phases. Clearly, this Gordian knot was created over time and will require time to unwind.

And while the traditional MIC stakeholders will be pivotal in this consortium, essential expertise would also come from representatives from other types of organizations, such as those focused on the following areas:

• The social and behavioral sciences
• Social determinants of health
• Healthcare consumer concerns and value-enhancing, outcomes-based approaches

Critical success factors

To help ensure the success of this effort, stakeholders should consider the following.

1 Create and codify tenets that guide decision-making, goal setting, contractual agreements and communication. These tenets will describe the beliefs, principles and behaviors necessary for success. They must be based on an explicit recognition of the entrenchment dilemma and other realities, apply second-order problem-solving, and have a primary goal of improved healthcare delivery and health outcomes.

2 Create a highly adaptive and iterative strategic plan. This long-term campaign will be riddled with ambiguities, unknowns and emergent challenges. Unlike previously attempted technical fixes, this strategy will require agile and iterative phased-in battle plans.

3 Commit their expertise and resources to this long-term effort. These resources include financial, operational, strategic, technologic, data and analytic, clinical, legal and government relations.

4 Commit to generating new ways of thinking and operating that are transparent, interoperable and fiduciary. Attention will focus on reframing the process as much as on identifying solutions. The transition to greater transparency, interoperability and fiduciary responsibility will require detailed focus and expertise on revising contracts and data-sharing agreements.

5 Commit to creating more value-enhancing and meaningful metrics. Existing metrics and dashboards such as the Vitalic assessment tool will play a key role in guiding initiatives and measuring progress. Also essential will be advanced population health assessment tools and predictive analytics that enable a shift to more preventive, personalized care. Future tools will need to be developed that better reflect meaningful metrics that matter to customers and patients.

6 Commit to expanding payment and care models that support preventive care. Desperately needed and way overdue is a rebalancing of payment to preventive care — including a significant increase in resourcing for primary care. The fact that only about 4% of all U.S. healthcare expenditures go to primary care is a major contributor to our underperforming healthcare system.^d

Courageous leadership needed

The root causes of U.S. healthcare’s wicked problem can be solved only through a more collaborative, long-game mindset. We will get nowhere by railing against capitalism, the profit motive and self-interests. Instead, we should redirect these forces to promote a humanistic transformation. We know, for example, that — despite the perverse incentives associated with fee-for-service (FFS) — business models such as bundled payments and the redirection of care to high-value providers prove that FFS can serve as a critical component of value-based care.

Nonetheless, threading the eye of this needle — leveraging capitalism, the profit motive and self-interests, and aligning FFS with value-based outcomes — will require us to generate and scale creative business models, payment mechanisms and care delivery approaches. And it will require rebalancing between short-term thinking and long-term success. These changes represent a challenge given the market’s intense pressure on CEOs and boards of directors to continually produce short-term profits and growth.

 Some may find the ideas represented here naive and absurdly unrealistic. I would counter that its absurdity pales in comparison to the absurdly poor performance of our healthcare system.

Something else to keep in mind: Radical new approaches and movements are often catalyzed by constraint-imposing events.

The recent passing of the One Big Beautiful Bill Act may have served that purpose. Over $1 trillion is expected to be extracted from the MIC over the next decade via unprecedented cuts in Medicaid spending. Other critical revenue streams are being threatened, including 340B medication discounts, provider state taxes and Affordable Care Act subsidies. And existing laws such as the No Surprises Act and the final 2026 rule for the Medicare Physician Fee Schedule will also catalyze change. These events will impose a tsunami of financial pressures on the healthcare industry and devastating increases in healthcare costs for states and municipalities; small, mid-sized and large businesses; and the American public.

We are at a crisis crossroads. The status quo is no longer an option. Attempting the same old solutions in the same old ways will not work.

We need courageous, high-integrity, fiduciary leadership among industry C-suites and boards across the MIC, as well as among employers, legislators, policymakers, lobbyists, benefits brokers, advisers and other industry stakeholders.

It only takes a few visionary voices to break with past narratives and brave seemingly intractable forces in pursuit of a more humane and sustainable future. Our willingness to accept this challenge will determine the health and welfare for hundreds of millions of Americans for decades to come. 

Footnotes

a. See, for example, Case, A., and Deaton, A., Deaths of despair and the future of capitalism, Princeton University Press, 2020; and Einav, L., and Finkelstein, A., We’ve got you covered: Rebooting American health care, Penguin Random House, 2023.
b. See, for example, Center for Public Interest Communications, “‘Wicked problems’: Challenges that defy easy solutions,” University of Florida, May 20, 2025; see also the sidebar, “Terms for understanding the nature of America’s healthcare dilemma and how to solve it,” below.
c. Keehan, S.P., et al., “National health expenditure projections, 2024–33: Despite insurance coverage declines, health to grow as share of GDP,” Health Affairs, June 25, 2025; and Worldometer, “GDP by country,”  data from 2024.
d. Chang, J., et al., “4% of health spending goes to primary care,” Health Care Cost Institute, Sept. 17, 2025.