Article originally published through the Texas Association of Accountable Care Organizations (TXAACOs) September 2026 Member Newsletter.
By 2034, U.S. healthcare spending is projected to approach $9 trillion and consume 20.6% of the entire national economy. That is up from $5.3 trillion and 18.0% of GDP in 2024. That should stop every board member, CEO, physician leader, payor executive, employer, investor, and policymaker in their tracks.
The spending trajectory is being driven by a convergence of forces: continued elevated use of medical services and goods, legislative changes affecting coverage and spending, and demographic shifts that will move more Americans into public programs, particularly Medicare. At the same time, the insured share of the population is projected to decline from 91.8% in 2024 to 90.5% in 2034.
Put plainly, healthcare is getting larger, more expensive, more publicly financed, and more difficult for patients, employers, providers, and government to absorb.
Those numbers are not just actuarial abstractions. They represent the lived reality of patients delaying care because they cannot afford it, employers struggling to absorb premium increases, hospitals operating on thin margins, physicians and care teams drowning in administrative burden, states managing Medicaid pressure, and federal policymakers confronting Medicare sustainability concerns.
For decades, healthcare leaders have talked about transformation. We have used the language of disruption, innovation, value, consumerism, interoperability, population health, and now artificial intelligence. Yet the industry has largely continued to operate on the same economic chassis: fragmented delivery, fee-for-service incentives, inconsistent accountability, administrative complexity, and too little alignment across the care continuum.
The question now is whether the latest spending projections represent just another warning sign, or whether healthcare has finally become a true burning platform.
The answer, in my view, is yes.
Not because healthcare suddenly has a cost problem. Healthcare has had a cost problem for a long time. What has changed is that the system is running out of places to hide the consequences.
The platform is burning because the math no longer supports incrementalism.
The Cost Problem Is Really an Alignment Problem
It is tempting to reduce the healthcare affordability debate to a simple statement: healthcare costs too much. That is true, but incomplete.
The deeper problem is that healthcare is expensive because the system remains poorly aligned, inconsistently accountable, and operationally fragmented across the care continuum. We often pay for activity rather than outcomes. We reward volume more reliably than value. We finance encounters but underinvest in coordination. We celebrate innovation but tolerate broken workflows. We chase point solutions while failing to redesign the operating model around the patient.
The fee-for-service chassis is a major part of the problem. It was built to reimburse transactions, not manage longitudinal health. It pays for the visit, the procedure, the test, the admission, and the discharge, but it does not naturally reward the connective tissue that actually determines value: prevention, access, care navigation, medication adherence, site-of-care optimization, post-acute management, behavioral health integration, specialist engagement, and closure of care gaps.
That is why the industry can spend more every year and still struggle to produce commensurate gains in outcomes, experience, access, and trust.
Healthcare does not just need lower costs. It needs a different alignment model.
The Burning Platform Has Four Fires
- The first fire is affordability. Patients are feeling it through premiums, deductibles, out-of-pocket costs, delayed care, and medical debt. Employers are feeling it through benefit costs that pressure wages and competitiveness. Government is feeling it through Medicare and Medicaid. The public is increasingly asking a fair question: if we spend more than everyone else, why are the results not better?
- The second fire is access. Coverage and access are not the same thing. A patient can have an insurance card and still face long waits, narrow networks, unaffordable cost sharing, limited behavioral health access, rural service gaps, specialist shortages, or post-acute bottlenecks. Access is not solved by financing alone. It requires capacity, workforce, logistics, technology, and redesigned care models.
- The third fire is workforce sustainability. Healthcare is still fundamentally human. Technology can support care teams, reduce administrative burden, surface insights, and automate low-value tasks. But it cannot replace trust, judgment, empathy, leadership, or the clinical relationships that drive behavior change. Physicians, APPs, nurses, administrators, and care teams are being asked to do more with less while navigating increasing complexity. That model is not sustainable without serious redesign.
- The fourth fire is accountability. The industry is moving, unevenly but unmistakably, toward greater accountability for cost, quality, outcomes, and total cost of care. ACOs, Medicare Advantage, commercial value-based care arrangements, specialty bundles, kidney care models, mandatory models, primary care models, and emerging CMMI initiatives are all signals of the same directional shift. The market may debate the pace and design of value-based care, but the destination is becoming harder to ignore.
The organizations that treat this as a temporary policy cycle will be exposed. The organizations that treat it as an operating model shift will be positioned to lead.
The Next Era Will Be Won at the Operating Model Level
Healthcare’s next chapter will be won by execution, execution, execution.
That means moving beyond broad commitments to value-based care and building the infrastructure required to perform under value-based expectations. It means understanding variation by service line, physician, site of care, payor, patient segment, and post-acute pathway. It means aligning incentives with the behaviors the organization actually needs. It means giving physicians credible data, not just dashboards. It means building governance structures that can make decisions, manage tradeoffs, and sustain accountability.
Most importantly, it means recognizing that specialists cannot remain peripheral to value-based care. Specialists manage or influence a significant portion of healthcare expenditures, yet many value-based strategies still over-index on primary care alone. Primary care is essential, but it cannot carry the transformation agenda by itself. Specialists, especially those treating chronic and high-cost conditions, including cardiology, endocrinology, nephrology, orthopedics, oncology, gastroenterology, and other specialties, all shape cost, quality, utilization, and patient outcomes.
This is where alignment models matter. Gainsharing, co-management, clinically integrated networks, ACO partnerships, value-based enterprises, bundled payment structures, and service-line performance models are not just contracting tools. Used correctly, they are strategic operating mechanisms. They create the forum, incentives, governance, and accountability needed to move from fragmented activity to coordinated performance.
The future belongs to organizations that can align hospitals, physicians (PCP’s and Specialists), post-acute providers, payors, home-based care, digital health, and community resources around measurable outcomes.
AI Is an Accelerator, Not the Answer
Artificial intelligence will absolutely shape the next era of healthcare. It can reduce administrative waste, improve documentation, support risk stratification, enhance revenue cycle performance, identify care gaps, streamline prior authorization, improve patient engagement, and help leaders see patterns buried in fragmented data.
But AI is not a strategy by itself.
If AI is dropped onto a misaligned operating model, it may only help the system do the wrong things faster. The real opportunity is not simply automating tasks. It is redesigning work. AI should be deployed to make care teams more effective, restore capacity, improve decision-making, and reduce friction across the patient journey.
The human element remains central. People drive change, not technology. AI may create leverage, but leadership creates adoption. Data may identify variation, but trust drives behavior change. Automation may reduce burden, but governance determines whether the tool actually improves care.
Healthcare leaders should be asking better AI questions: What workflow are we redesigning? What burden are we removing? What decision are we improving? What risk are we managing? What outcome are we advancing? How will we measure whether this actually creates value?
From Burning Platform to Strategic Imperative
A burning platform does not guarantee transformation. It only guarantees that the status quo has become more dangerous than change.
That is where healthcare is now.
The industry does not need more awareness that costs are rising. It needs disciplined execution around the levers that can actually change the trajectory.
- First, align incentives across the care continuum. Hospitals, physicians, payors, and post-acute partners must have shared accountability for outcomes, experience, and total cost of care.
- Second, build enterprise-level performance infrastructure. Data must move from retrospective reporting to actionable intelligence tied to operations, physician engagement, and service-line strategy.
- Third, redesign care around patients, not billing units. The right care, in the right setting, at the right time, with the right team, must become an operational discipline rather than a marketing phrase.
- Fourth, use value-based care as a strategic bridge, not a side project. Organizations still have to survive in fee-for-service today, but they must build the capabilities required for accountable care tomorrow.
- Fifth, deploy technology and AI with operational intent. The goal is not more tools. It is better capacity, better coordination, better decisions, and better outcomes.
- Finally, lead with people. Healthcare transformation will not happen because a model changes, a contract changes, or a technology platform goes live. It will happen when leaders create clarity, physicians trust the data, teams understand the mission, and organizations build the discipline to execute.
Conclusion: The Fire Is Real, But So Is the Opportunity
Healthcare has finally become a burning platform because the economic, operational, clinical, and human pressures are converging at the same time. The spending trajectory is unsustainable. The workforce is strained. The public is frustrated. The policy environment is shifting. The old model is showing its limits.
But burning platforms can do one of two things. They can destroy organizations that cling to the past, or they can force the clarity needed to build something better.
The opportunity in front of healthcare leaders is not merely to cut costs. It is to redesign the system around the patient. That means alignment, accountability, execution, and value. It is to move beyond fragmented transactions and toward integrated performance. It is to build care models that are financially sustainable, clinically credible, operationally practical, and human-centered.
The question is no longer whether healthcare needs to change.
The question is whether leaders will move with enough urgency, discipline, and courage to make the change real and lasting!
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