Six trends driving U.S. healthcare’s ‘doom loop’

The United States spent $4.9 trillion on health care in 2023 — nearly a fifth of the entire economy — yet Americans die younger and live more years in poor health than people in virtually every other wealthy nation.

Now, a new analysis by Trilliant Health, a leading health care analytics firm, warns that the system has reached an inflection point. Without dramatic change, either from within the industry or imposed by government, the economic and human costs will become unbearable.

“The reputation of the U.S. health care system precedes itself — it is expensive, complex and inefficient,” said Dr. Allison Oakes, the firm’s chief research officer in a statement. “The ‘system’ is really a collection of profit-seeking businesses treating illness, rather than a thoughtful and comprehensive approach to promoting health.”

The firm’s annual report, released this month, identifies six interrelated crises that have created what researchers describe as a “doom loop” — a self-reinforcing cycle where rising costs, declining access and worsening outcomes feed off one another.

Trend #1: Medical prices outpace inflation by wide margin

Perhaps nowhere is the dysfunction more apparent than in health care pricing. Medical costs have risen 54 percent since 2009, far outpacing overall inflation. But the real problem is not just that prices are high — it’s that they are wildly inconsistent and seemingly arbitrary.

The same procedure can cost 8.5 times more at one hospital than another, with no correlation to the quality of care. At some facilities, the price varies sevenfold depending solely on which insurance company is footing the bill.

In Philadelphia, Aetna peays twice as much as UnitedHealthcare for major bowel procedures at Thomas Jefferson University Hospital. In Washington, UnitedHealthcare pays seven times more than Aetna for a colonoscopy at MedStar Washington Hospital Center.

The consequences ripple through the economy. Family insurance premiums have jumped 86 percent since 2010, with workers now shouldering three-quarters of the cost. Medical debt affects one in seven American households. The share of adults who say they can afford and access the care they need has fallen to 51 percent, down from 56 percent just three years ago.

Prescription drugs tell a similar story. Brand-name medications cost more than four times as much in the United States as in other developed countries. Americans represent less than a quarter of global prescription volume but account for nearly two-thirds of worldwide drug sales.

Trend #2: Aging Baby Boomers shake up hospital revenue streams

Employer-sponsored insurance underwrites 30 percent of national health spending and generates most hospital revenue. At least, that’s been the case for decades. As Baby Boomers age into Medicare — which pays hospitals substantially less than private insurers — hospitals will have to adjust their financial models. 

Some hospitals are already closing obstetrics units, citing declining birth rates. At least 17 health systems announced closures in the first half of this year alone. In rural areas, where fewer than 42 percent of hospitals still offer labor and delivery services, expectant mothers sometimes drive hours for care.

Trend #3: Decline in primary care leads to increase in costly speciality care

The United States has one of the smallest primary care workforces in the developed world, with only 12 percent of physicians practicing primary care compared with 25 to 50 percent in peer nations.

Americans also use primary care less frequently than people in other countries — about 3.6 fewer consultations per person annually than the international average.

The gap widens as U.S. medical students gravitate toward specialties paying twice as much. Internal medicine residencies saw 15% of positions go unfilled in 2025, while lucrative subspecialty fellowships filled at rates above 90%.

The consequences show up in population health. Nearly half of cancer diagnoses occur at late stages, even for screenable cancers. Chronic diseases proliferate across all age groups. Deaths among adults 18-44 have been rising, driven by liver disease, diabetes, and stroke—all largely preventable conditions.

Trend #4: Pervasive inefficiency and exploitation embedded in every transaction

The report documents systematic inefficiency throughout the system. Emergency department visits coded at the highest complexity levels jumped from 37% to 48% between 2018 and 2024, suggesting widespread upcoding that inflates bills.

Hospitals spend more on administration than direct patient care, with overhead growing faster than clinical services. One academic medical center reported spending $5.5 million annually just tracking quality metrics—while the share of hospitals reporting basic mortality data declined.

Vertical integration creates new conflicts. UnitedHealthcare’s Optum division receives higher reimbursement rates from its parent company than competing providers get for identical services. The three largest pharmacy benefit managers—all insurer-owned—control 80% of prescription claims while adding opaque layers between patients and medications.

Electronic health records, intended to improve efficiency, have become expensive burdens. Most physicians disagree that EHRs improve their workflow, and 70% report they don’t enhance job satisfaction.

Trend #5: Care leaving hospitals

Ambulatory surgery centers now perform just over half of eligible surgeries, up from 42% in 2018. The shift could reduce costs—ASC rates run substantially lower than hospital outpatient departments for identical procedures.

But hospitals retain pricing leverage even as volume declines. Commercial rates at hospital facilities average 55% higher than ASCs for the same surgeries, with no quality difference.

Pharmaceutical innovation threatens procedure-based medicine entirely. GLP-1 medications for weight loss and diabetes have grown 745% since 2018 while bariatric surgery volumes stagnated. Similar patterns appear in cardiology, where SGLT2 inhibitors may reduce demand for cardiac interventions.

Meanwhile, 109 rural hospitals have closed since 2015, and another 40 shifted to emergency-only care since 2023. Some 314 rural facilities face immediate closure risk.

Trend #6: Policymakers attempt price controls

Voluntary reform efforts have failed. The Medicare Shared Savings Program—a flagship value-based care initiative—has saved less than 1% of total Medicare spending. Alternative payment models launched since 2012 have generated $5.4 billion in net losses.

That failure is pushing policymakers toward price controls. Multiple states advanced legislation in 2025 to cap commercial hospital rates as a percentage of Medicare. Indiana enacted a law requiring a study that will inform future price caps. Vermont implemented hospital price limits directly.

If such caps were implemented nationally at 200% of Medicare rates, hospital spending would decline by $43 billion. At 150% of Medicare, savings would reach $119 billion—3.3% of total national health spending.

The Congressional Budget Office projects price transparency alone would reduce spending by less than 1%. Increased competition might achieve similar modest gains. Only government-imposed rate caps show potential for meaningful savings.

Looking ahead

With healthcare on track to consume more than 20% of GDP by 2033 and the national debt exceeding $35 trillion, the financial mathematics grow impossible. Medicare, Medicaid, and interest payments each now exceed $1 trillion annually.

“The choice for all health economy stakeholders is whether to implement radical and transformational change from the inside or whether to be subjected to such change by external forces,” Oakes said.

History suggests the government has one effective tool: price controls. The introduction of diagnosis-related groups in 1983 and the Balanced Budget Act of 1997 both slowed spending growth substantially, though each time the industry eventually found workarounds.

This time may be different. Price transparency requirements, mandatory bundled payment models, and growing state-level action suggest the political will for aggressive intervention has arrived.