Healthcare system reform: why incrementalism fails patients

The Paradox of High Spending and Low Access: A 2024 Snapshot

Yet 27.1 million Americans went the entire year without health insurance.

Those figures describe a contradiction, but not a simple one. High national spending does not automatically guarantee universal coverage, affordable treatment, or good health outcomes. Money can enter a system without reaching patients in the form of timely primary care, manageable bills, or reliable access to specialists.

What makes 2024 a useful snapshot is the direction of travel. National health expenditure grew 7.2% year over year. The Centers for Medicare & Medicaid Services projects that spending will continue to grow at an average annual rate of 5.4% through 2034, compared with projected average GDP growth of 4.1%. If those projections hold, health care will account for 20.6% of GDP within a decade.

The United States is therefore not confronting a single coverage problem. It is confronting a cost, delivery, and institutional design problem at the same time.

The Commonwealth Fund’s 2024 international comparison, which assessed ten high-income countries across 70 performance measures, ranked the United States last overall. The country also performed poorly on access, administrative efficiency, equity, and health outcomes. The comparison does not prove that any one reform would produce a better result, nor does it identify a single cause for the American system’s performance. It does establish a difficult starting point: the country spends more than its peers while receiving weaker results across several dimensions that patients experience directly.

The standard policy response has been incremental. A new prior-authorization rule here. A Medicaid eligibility adjustment there. An expansion of subsidies, a narrower formulary, a pilot program, a demonstration project. These interventions can produce genuine improvements. The harder question is whether they can overcome the incentives built into the broader delivery model.

That is the argument against treating incrementalism as the default strategy for healthcare system reform. It is not that every small reform is ineffective. It is that small reforms may be poorly matched to problems that are generated across the system rather than at a single point within it.

The Illusion of Coverage: Why Insurance Does Not Equal Affordability

Insurance is often treated as synonymous with access. The policy conversation defaults to coverage rates: what percentage of the population holds a card, is enrolled in a plan, or has a name in a payer’s system.

By that measure, 2024 looks relatively stable. About 92% of the population had health insurance for all or part of the year. But coverage and access describe different conditions.

Coverage is a contractual relationship between a person and a payer. Access is the ability to obtain timely, affordable, clinically appropriate care. The gap between the two is where many patients encounter the system as it actually exists: deductibles, copayments, coinsurance, narrow networks, excluded services, and bills that arrive after treatment has already taken place.

A 2025 KFF poll illustrates the gap. Thirty-seven percent of insured adults reported skipping or postponing needed health care because of cost during the preceding twelve months. Among uninsured adults, the reported share was 75%. These are survey responses, not a direct measure of every instance of forgone care, but they capture a central problem: possessing insurance does not mean that a person can comfortably use it.

Census Bureau data provides another view. Among adults aged 18 to 64, 38.6% of uninsured respondents reported delaying, skipping, or not receiving needed medical care or medication because of cost. The corresponding figures were 17.0% for people with private coverage and 18.8% for those with public coverage.

Insurance reduced the reported likelihood of cost-related barriers. That matters. It would be wrong to treat coverage as irrelevant simply because it does not solve every affordability problem. At the same time, the figures show why coverage rates alone are an incomplete measure of healthcare performance. Nearly one in five adults with public coverage, and a similar proportion of privately insured adults in this age group, still reported a cost-related obstacle to care.

Insurance is a financial instrument, not a delivery mechanism. A coverage card can lower the price of treatment without making treatment affordable.

A person with a high deductible and a substantial monthly premium may be insured in every statistical sense while postponing routine care in practical terms. The policy distinction is important. Expanding enrollment can reduce exposure to catastrophic costs, improve access to some services, and make care more feasible for many people. It does not necessarily change the underlying price of a visit, prescription, procedure, or hospital stay.

The debt data reinforces that distinction. KFF found that 41% of U.S. adults carry some form of medical or dental debt. Twenty-four percent reported bills that were past due or could not be paid, while 21% were paying providers over time. These figures describe different forms of financial pressure, and they should not be collapsed into one measure of household hardship. Taken together, however, they show how medical costs can remain a long-term obligation even for people who have coverage.

This is where the limits of coverage-centered reform become visible. Eligibility expansions, subsidy adjustments, and minimum-benefit requirements can improve the insurance layer. They do not necessarily alter the prices negotiated between payers and providers, the complexity of plan rules, or the concentration of care in high-cost settings.

The distinction also matters for comparisons between private and public healthcare efficiency. A public plan may reduce some administrative duplication or lower patients’ exposure to point-of-care costs. A private plan may offer different networks, utilization controls, or purchasing arrangements. Neither label, by itself, tells us whether a patient can obtain the right care at the right time. The relevant question is how the entire payment and delivery model distributes cost, risk, and administrative work.

Administrative Friction: How Prior Authorization and Fragmentation Delay Care

Affordability is only one barrier. Administrative complexity can delay care even when a patient is insured and a clinician has recommended treatment.

The American insurance landscape is fragmented across thousands of plans with different cost-sharing rules, coverage limits, formularies, network configurations, and documentation requirements. A patient may change plans without changing doctors, yet still discover that a familiar medication now requires a different approval. A provider may submit the same clinical information to several insurers in different formats. An employer may offer a plan that looks affordable at enrollment but exposes a household to significant out-of-pocket costs when care is actually needed.

This is not merely an inconvenience. The work of navigating the system consumes time for patients, clinicians, billing staff, employers, and insurers. That time becomes part of the cost of delivering care.

Prior authorization is the most visible expression of this friction. It was designed as a utilization-management tool: a way for insurers to review whether a service, medication, or procedure met coverage and clinical criteria before payment. In principle, such review can reduce inappropriate use and protect patients from unnecessary treatment. In practice, the process can also produce delays, repeated documentation, and disputes over which standard should govern a decision.

A 2025 Government Accountability Office review examined nine selected Medicare Advantage organizations and found that eight required prior authorization for at least some behavioral-health services. That finding shows the reach of utilization management in the selected organizations. It does not, by itself, establish that every behavioral-health denial was unjustified or that behavioral-health authorization practices are identical across insurers.

A separate 2022 examination by the Department of Health and Human Services Office of Inspector General reviewed Medicare Advantage prior-authorization decisions. In the specific sample examined, 13% of denied requests met Medicare coverage rules and would have been covered under traditional Medicare. The finding is significant, but its boundaries matter: it applies to the reviewed sample and the comparison used by the OIG. It is not a measurement of all prior-authorization decisions across the health system.

That distinction should not obscure the underlying concern. A denial that is later reversed can still impose a delay. The patient may have to contact the provider, the provider may need to submit additional records, and an insurer may require a new review or appeal. The eventual clinical consequences will vary by condition and by the length of the delay. In some cases, the delay may have little practical effect. In others, it may complicate treatment or shift care into a more expensive setting.

Service denials are common enough across the U.S. insurance landscape that appeals have become part of ordinary medical administration. The burden is not distributed evenly. Patients with time, health literacy, stable employment, and a persistent clinician’s office may be better positioned to pursue an appeal than those without those resources.

The familiar policy response is to streamline forms, shorten response deadlines, require clearer explanations, or exempt certain low-risk services from prior authorization. Those measures may be worthwhile. They can reduce avoidable work and make the process less opaque. But they do not settle the broader disagreement that produced the authorization system in the first place.

Fee-for-service payment rewards the delivery of billable services. Insurers respond to the possibility of overuse with utilization management. Providers then invest in staff and systems to obtain approvals and challenge denials. Insurers may tighten rules when spending rises, while providers develop new strategies to meet or contest them. This creates an adversarial relationship that no individual form redesign can fully resolve.

The evidence supports describing this as a persistent structural tension, not as proof that one side is always acting improperly. Insurers have a legitimate interest in reviewing expensive or uncertain interventions. Clinicians have a legitimate interest in making decisions for their patients without unnecessary administrative interference. Patients bear the consequences when the two processes collide.

The Limits of Incrementalism in a $5.3 Trillion Market

Incrementalism in health policy is not irrational. It is often the only politically viable approach in a system where coverage is divided among employer-sponsored insurance, Medicare, Medicaid, Affordable Care Act marketplace plans, and other arrangements. Any reform that changes those flows encounters institutional resistance from insurers, providers, pharmaceutical companies, employers, regulators, and the beneficiaries who fear losing what they currently have.

Small reforms have also produced real gains. The Affordable Care Act reduced the uninsured rate. Medicaid expansion improved access in participating states. The No Surprises Act addressed some forms of surprise billing. These outcomes should not be dismissed simply because they did not transform the entire system.

The question is narrower and more consequential: can incremental adjustments close the gaps that continue to appear in spending, affordability, access, and administrative performance?

The 2024 data does not answer that question by itself. It does show why the question remains open. Health spending is projected to grow faster than GDP. Millions remain uninsured. Survey respondents with insurance continue to report skipping needed care because of cost. Medical debt remains widespread. International comparisons place the United States behind peer countries on several major measures.

Those facts are consistent with an argument that incremental reforms have not yet matched the scale of the problem. They do not prove that incrementalism can never work, or that a single structural alternative would perform better under American political and economic conditions.

Healthcare behaves less like a linear machine than like a network of interacting incentives. Payers, providers, patients, employers, pharmaceutical manufacturers, and regulators respond to one another. A change in one part of the system can produce effects elsewhere that are difficult to predict.

Medicaid offers a clear example of the implementation problem. Expanding eligibility can increase coverage, but later redeterminations can remove people from the rolls. During the unwinding of the COVID-era continuous enrollment provision, administrative processes became a significant factor in whether people retained coverage or had to re-enroll. A person may remain eligible in principle yet lose practical access because of paperwork, missed notices, or a breakdown in communication.

That does not show that Medicaid expansion was ineffective. It shows that a coverage intervention can be weakened by administrative conditions outside the original policy change.

A similar pattern appears in cost-sharing. Raising subsidies may make a plan easier to purchase, while leaving deductibles and provider prices high enough to deter use. Tightening prior-authorization deadlines may speed some decisions, while leaving the incentives for extensive review intact. Expanding primary-care access may help patients, while a payment model continues to reward more profitable procedures and hospital-based services.

This is the strongest case for structural reform: not that every incremental measure fails, but that improvements at one layer can be absorbed or offset by pressures at another. The system may deliver a better enrollment rate without delivering affordable care, or faster approvals without changing the price of treatment.

Countries that achieve better outcomes at lower cost use different combinations of universal coverage mechanisms, primary-care-centered delivery, negotiated pricing, and budgetary controls. These arrangements are not plug-and-play solutions for the United States. They involve trade-offs over taxation, provider autonomy, waiting times, benefits, and the role of private insurers. But they demonstrate that healthcare delivery model innovation is not limited to adding another program to the existing structure.

Incremental reform can repair a point of failure. It cannot, by itself, decide whether the system is designed around access, volume, risk protection, or revenue.

Beyond Administrative Adjustments: Toward Structural Delivery Innovation

A serious healthcare system reform agenda would begin by changing the incentives that determine how care is financed and delivered. That does not require pretending that one model will solve every problem. It requires being explicit about which outcomes the system is meant to prioritize.

Payment model redesign

Fee-for-service reimbursement pays providers for individual visits, tests, procedures, and treatments. It can support access and reward clinical work, but it also makes volume a central route to revenue. When the system is already expensive, payers respond with utilization controls. Providers respond with documentation, coding, negotiation, and appeals.

Alternative payment models attempt to change that relationship. Capitation pays a defined amount for a patient or population. Bundled payments cover an episode of care. Accountable care organizations link some payment to coordination and outcomes. These approaches have produced mixed results across different settings, and limited demonstrations should not be treated as proof of universal success.

Their significance is that they change the question. Instead of asking only whether a service can be billed, they ask how a population’s needs can be managed within a defined financial and clinical framework. That shift can support prevention, coordination, and earlier intervention, but it also requires safeguards against under-treatment and risk selection.

Administrative simplification

A fragmented system creates repeated work. The same patient information may be entered into several portals, translated into different billing codes, or reviewed under different benefit rules. Standardizing forms and electronic transactions can reduce some of that burden. More ambitious reform could standardize benefit designs, limit the number of materially different coverage architectures, or simplify the relationship between patients and payers.

The objective is not administrative tidiness for its own sake. It is to reduce the amount of clinical time spent proving that care should be available.

The trade-off is that standardization can reduce flexibility. A uniform rule may be easier to understand but less responsive to unusual clinical circumstances. Any simplification effort would therefore need clear exceptions, transparent criteria, and a usable appeal process. Structural reform is not the elimination of judgment. It is the relocation of judgment from opaque administrative procedures to rules that patients and clinicians can understand.

A genuine shift toward prevention

The American system remains heavily oriented toward treating acute episodes: hospitalizations, procedures, medications, and specialist interventions. Prevention, chronic-disease management, behavioral-health integration, and social supports are harder to finance through a model built around discrete billable events.

This is one reason preventative care policy shifts matter even when their savings are difficult to calculate. A preventive intervention may improve health without producing an immediate reduction in total spending. The person who avoids a hospitalization is not always identifiable in a budget line, and benefits may arrive years later or accrue to a different payer.

Prevention also cannot be reduced to consumer behavior. Exercise, nutrition, housing, transportation, and working conditions shape health before a patient enters a clinic. The growing public interest in outdoor fitness, trail-based exercise, and backcountry activity — a market that now supports entire ecosystems of specialized gear and infrastructure — reflects one form of demand for health-promoting activity outside the clinical system. But individual choices cannot substitute for accessible primary care, safe neighborhoods, paid leave, or affordable medication.

Prevention is difficult to finance when success means that a billable event never occurs.

The system therefore needs payment arrangements that recognize prevention as work rather than as an optional add-on. That could include funding for community health workers, integrated behavioral-health teams, home-based services, and primary-care practices that are paid for continuity rather than only for visits.

Reconsidering the boundary between public and private provision

The private-versus-public debate is often framed as a contest between entire systems. In practice, the more useful comparison concerns specific functions: who finances care, who sets prices, who owns facilities, who employs clinicians, who manages risk, and who is accountable when access fails.

A system can use public financing with private providers. It can use private insurers under public rules. It can combine public programs with regulated commercial plans. Each arrangement produces different incentives and administrative burdens.

The central issue is not whether one sector is inherently efficient. It is whether the institutional design makes it possible to measure performance, control prices, protect patients from financial harm, and hold decision-makers accountable. A fragmented private market may offer choice while increasing administrative overhead. A centralized public program may simplify payment while creating its own constraints. The relevant trade-offs must be examined rather than hidden behind labels.

What structural change would demand

Structural reform would also require political choices that incremental policy can postpone:

• deciding whether basic access is an entitlement or primarily a function of employment and household purchasing power;
• determining how much variation in benefits and prices the system should permit;
• separating clinical judgment from payment disputes more clearly;
• investing in primary and preventive care even when savings are delayed;
• creating a common administrative language across payers and providers;
• measuring affordability through actual use of care, not enrollment alone.

None of these choices guarantees success. Structural changes can produce new forms of rationing, bureaucracy, or inequity if they are designed poorly. The point is not to replace one certainty with another. It is to make the trade-offs visible.

The Structural Imperative

The case for moving beyond incrementalism rests on a mismatch between the scale of the problems and the scale of the interventions. The United States spends $5.3 trillion on health care, or $15,474 per person, while 27.1 million people remain uninsured. Survey respondents continue to report cost-related delays even when they have coverage. Medical debt affects a large share of adults. International comparisons show weak performance relative to other high-income countries.

These facts do not establish one universal explanation. They do not prove that every incremental reform is futile, or that a particular national model can simply be imported. They do show that enrollment, compliance, and administrative adjustment are not sufficient measures of reform.

Incrementalism is useful when the problem is local, the incentive structure is compatible with improvement, and the effects can be contained. It becomes less convincing when each fix is introduced into a system that continues to reward volume, preserve fragmentation, and shift financial risk onto patients.

The most defensible conclusion is therefore an argument, not a verdict: the United States may need reforms that change the architecture of payment and delivery rather than only adding protections around it. That means treating affordability as more than an insurance question, treating prior authorization as more than a paperwork problem, and treating prevention as more than a matter of individual responsibility.

A healthcare system can be made more generous at the edges while remaining unaffordable at its core. It can cover more people while requiring them to delay care. It can process authorizations faster while preserving the conflict that makes so many authorizations necessary.

The next phase of healthcare system reform should be judged by whether it changes those underlying relationships. If it does not, the country may continue to improve individual components while leaving patients to navigate the same expensive, fragmented structure.