Health care costs are out of control. National health care spending has grown from 9% to almost 20% of the US economy since 1980, consistently growing significantly faster than gross domestic product (GDP). Poor quality and suboptimal care regularly account for at least 35% of care and up to 50% of total medical spend. This problem isn’t new, but it’s getting worse as insurance continues to get more expensive. It’s bankrupting our nation’s individuals, families, businesses, and government.
As The Wall Street Journal reported, 2023 was the most expensive year to date for individuals paying for health insurance coverage, and 2024 is likely to be worse. See Figure 1 in the report for more detail, and take note that the average annual contributions for family coverage total almost $24,000, an increase of 7% over the prior year.
As costs climb ever faster, leaders and individuals alike shake their heads in dismay, seemingly saying, “We can’t do anything about this because it’s just too complicated.” But in this paper, we demonstrate why that’s not the case. The thing is, we can do something about it.
This report provides a roadmap for innovators and governments seeking to create a healthier and more solvent future for the nation. It spells out how they can leverage Optimal Care business models to unseat incumbent health insurers, transform the industry, and solve the systemic health care cost inflation problem.
Update: A New Analysis
Life for Health: How a two-insurance system might be the paradigm shift health care needs
This white paper examines “Life for Health,” a health insurance innovation developed by Jeremy Shane, through the lens of the above research on industry transformation and cost containment.
Life for Health addresses a core structural problem in US health care: chronic diseases drive the majority of spending, yet traditional health insurance is designed for short-term, episodic care. The model proposes a two-insurance system that separates these functions. Health insurance continues to cover routine, emergency, and elective care, while life insurance is used to manage chronic and complex disease over time.
This innovative model doesn’t claim to eliminate chronic disease. Instead, it offers a testable pathway for addressing the economic drivers of rising health care costs by rewarding prevention, reversal, and sustained health over time. In doing so, it has the potential to improve health outcomes and long-term affordability.
Using established criteria for health insurance transformation, this analysis assesses whether Life for Health could help move the health care system toward zero-inflation health care.
