When I started writing this book in early 2018, we were living in a completely different world. In late 2019 and early 2020, the coronavirus (SARS- CoV-2, or COVID-19) stunned the world, including America, hurtling everyone into unprecedented times. Within just a few months, several things had radically changed. From having one of its lowest unemployment rates—at 3.5 percent in February 2020—the United States had one of its highest, at 14.7 percent, by the end of April 2020. As of July 2021, the number of US coronavirus cases had reached 33 million. The number of deaths due to coronavirus had reached a staggering 607,000 and was still growing. Looking at these numbers and the country’s dysfunctional pandemic response, one might argue that the COVID-19 event is an exception. However, the United States was unprepared to handle the pandemic, not only because the state and national leaders, starting with President Trump and his administration, ignored it, but also because the country doesn’t have an efficient healthcare system in place. Over the years, our system has been like quicksand for millions of Americans, swallowing many within its needlessly complex organization and bizarre business models that are prone to fraud, waste, and abuse, or because they are underinsured or not insured at all. Even if COVID-19 hadn’t happened, the basis of my book on US healthcare would remain the same; but the pandemic has pointed out how very broken the system is. My goal is to help readers, both those working in the field and consumers, better understand the complexities of the American healthcare system, whether navigating it professionally or personally. I clarify myriad system-level challenges and pain points to inspire healthcare entrepreneurs and innovators to upend the present business models and achieve a more efficient system. I offer advice for consumers on navigating the current system. My fifteen years of experience as a healthcare industry advisor, strategist, and technologist has given me a front-row seat to what is working and what is not.

The United States has the highest per capita healthcare expenditure of all of the countries tracked by the Organisation for Economic Co-operation and Development. We’re projected to spend $6.2 trillion, or 19.7 percent of our GDP, by 2028. Yet the United States is near the bottom or below average when it comes to outcomes. Moreover, as of 2018, more than 29 million Americans were uninsured. Many more are underinsured. In 2018, the country had more than 46,802 opioid overdose-related deaths. More than 300 physicians commit suicide every year, and medical students graduate with an average of $232,300 in student loans. Meanwhile, the US healthcare industry is one of the top two sectors, the other being the combined finance/insurance/real estate sector, involved in lobbying and campaign contributions. The industry and its lobbyists spend an absurd amount of money to help industry constituents reap more profits, not aid consumers or fix underlying problems.

Medications can cost consumers more than $1 million over the course of their regimens, with Myalept as the priciest manufactured drug at a monthly cost of $71,306. As of 2017, the United States had 131 blockbuster drugs, which are medications that generate a minimum of $1 billion in revenue every year for the manufacturer; more than 30 percent of our healthcare dollars spent was considered waste; more than 530,000 households endured significant financial hardships because of medical bills; and more than 2.5 million Americans acquired other health conditions during their hospital stays each year.

Meanwhile, medication errors kill 7,000 to 9,000 Americans every year; more than 3.6 million youth use e-cigarettes; and the US has more than 72 million obese adults. Yet America spends no more than 4.2 percent of its overall national healthcare expenditures on prevention and other public health activities. And as advanced as this country is, it doesn’t have a national comprehensive medical record-keeping system. By 2050, there will be more than 85 million Americans older than 65 years of age, but there will not be enough caregivers, nurses, and physicians to care for them.

America has serious foundational cracks in its healthcare system, which daily impact millions of Americans. This book examines the finer details of the exist- ing system. Of course, there are both upstanding and duplicitous companies and professionals, not just in healthcare, but also in every industry. For every example of a dishonest provider that I mention who cheats the system, thousands of honest others dedicate their lives to offering quality care. For every outrageously priced drug that I describe, thousands of medications are affordable and save millions of lives. I detail several business practices from across the healthcare industry, including insurance companies—also known as payers in this book—brokers, consulting companies, IT organizations, pharmacy benefit managers, and others. Most carry out legal business practices. In questioning certain aspects, I am neither hypercritical nor cynical, and I don’t overlook the industry’s general benevolent intent of the millions of professionals who work in it. There are thousands of companies collaborating both upstream and downstream that benefit consumers. I am proud to be a part of this industry, and I work to make it better every day. However, we must continue to address these healthcare system issues collectively, so the purpose of this book is to point out real problems and possible improvements.

This book targets three kinds of audiences. One audience is healthcare professionals who serve the US healthcare industry, whether they work inside or outside the United States. These include, for example, executives and administrators; lawyers and lawmakers; doctors, nurses, pharmacists, healthcare workers,

and medical students; consultants; caregivers; care managers, population health managers, customer service representatives, coders, and health insurance professionals; and researchers. It also includes investors and industry disruptors who understand critical blockages to upend the status quo; and the healthcare IT professionals who play a vital role in automating workflows (but who don’t always take their end-users’ needs into account). The industry is so vast, and parts of it so purposefully hidden, that even we who work in it do not fully understand how it functions from one end to another. This book covers many features, symptoms, and structural issues that healthcare professionals should know about and understand.

Another audience for this book is average consumers, especially those who want a better understanding of the US healthcare system’s many quirky aspects. Anyone who has used healthcare—from having a broken bone set in a walk-in clinic to fighting a chronic disease with multiple specialists to negotiating a medical bill—will know more about how the system works, how it does not, and how to ask the right questions.

The final audience is anyone, here or overseas, who studies the American healthcare system. That could include researchers, policymakers, for-profit or not-for-profit organizations, and so on. This book offers a high-level overview of the system’s many dimensions, aspects, and problems.

I’ve been working in the healthcare industry for the past fifteen years and have been fortunate to collaborate with smart and caring professionals worldwide. In the United States, I have worked with healthcare systems, health insurance companies, health plan operators, healthcare IT companies, and consulting companies to solve complex and intriguing challenges. In the course of my MBA program at Cam- bridge University, I worked with the World Health Organization and the National Health Service in the United Kingdom. In my international professional journey, I’ve collaborated with organizations and ministries of health in different countries, including Singapore, Australia, Malaysia, Thailand, and India. I have tried to leverage all these experiences in analyzing the American healthcare industry.

I have divided the book into the following six sections.

Section 1: Healthcare Systems and Insurance

Section 1 focuses on the fundamental organization of the US healthcare and insurance systems. In Chapter 1, I discuss how healthcare and insurance companies function like other corporate entities. However, by doing so, they create two opposing sets of goals—generating profits for their shareholders and reducing total costs of care for consumers. In Chapter 2, I describe how various populations are insured differently. With a potpourri of insurance options, the United States may exhibit free market characteristics, but the result is a system that is too complex and leaves too

many people out of it. Chapter 3 tackles the dismal status of increasing premiums in the employer-sponsored health insurance market, the largest insurance segment with 178 million workers. I explain the business models of brokers, insurance carriers, and third-party administrator companies. Chapter 4 describes provider networks; it also discusses how health maintenance organization plans are purposefully narrower and more restrictive than preferred provider organization plans, although the latter are misleading when providing discounts. I also describe how the big in- insurance companies thrive by building and leveraging their networks, especially in the commercial (or employer-sponsored) health plan sector. Although America offers a diverse range of health insurance options, millions of Americans struggle to access care in a timely fashion. I review this topic in Chapter 5.

Section 2: The US Pharmaceutical Industry

Section 2 covers the pharmaceutical industry. In Chapter 6, I introduce readers to all parts of the US drug supply chain, and in Chapter 7, I describe the business model of pharmacy benefit managers (PBMs). Although it enables significant drug cost savings in the current industry setup, the PBM business model can appear less than scrupulous. Chapter 8 explains why clinical trials take such a long time to come to fruition, although the push for a successful COVID-19 vaccine considerably speeded up the time this normally takes. I also talk about mishaps in clinical trials. Thus far, the United States has been lucky, but it cannot forgo safeguards and integrity when conducting trials. In Chapter 9, I analyze the opioid epidemic, and I discuss how the overprescribing of opiates and the use of synthetic opioids such as fentanyl are causing drug overdose deaths. The United States is one of only two countries globally (the other is New Zealand) that allows direct-to-consumer advertising by pharma companies, which I address in Chapter 10. I primarily focus on how pharmaceutical companies lead in such marketing efforts, but I also explain how healthcare providers, hospital systems, and provider groups have followed suit. Pharmaceutical companies are notorious for outrageous drug gouging, which is the topic of Chapter 11.

Section 3: Waste in the Healthcare Industry

Section 3 reveals how the US healthcare industry wastes money. Chapter 12 focuses on unnecessary administrative costs, which total $1 trillion every year. I focus on hospital-acquired conditions in Chapter 13. These don’t just include infections, like pneumonia; in-hospital patients suffer from many avoidable incidents, such as falls and medication errors. These incidents and accidents can dramatically increase hospital bills. Thousands of healthcare providers perform numerous screenings and expensive procedures that don’t necessarily have high value for patients, meaning consumers do not get enough benefit for the cost. I take on these costly and excessive screenings and procedures in Chapter 14. I show how expensive medical devices also contribute to overall healthcare expenses and how significant types of medical fraud (from illegal kickbacks to self-referrals) and abuse (from phantom billing to pill mills) do the same in Chapters 15 and 16, respectively. Chapter 17 high- lights a particular type of fraud related to risk adjustment, which is used in managed care organizations to pay risk-proportionate payments to health insurance companies and, in some cases, to providers. There are scores of health insurance companies and healthcare providers involved in upcoding, a process of making members appear sicker than they are, to receive higher payments. I address medication errors, safety concerns, and drug waste topics in Chapter 18. In the last chapter in this section, Chapter 19, I discuss the spending differences between prevention and treatment. I analyze smoking, vaping, obesity, and other social determinants of health.

Section 4: Poor Patient and Provider Experiences

Section 4 covers the most important people in the healthcare industry: patients and providers. In Chapter 20, I detail how the healthcare industry treats consumers compared to other industries. Millennials are paving the way for better healthcare consumerism, but so much more needs to be done to improve the patient experience. Meanwhile, the United States is estimated to have a shortage of 49,000 primary care providers by 2030, driven primarily by medical student debt and infrastructural issues. And it’s even worse in the field of nursing. To meet workforce needs, the US will need to hire more than 203,700 nurses every year until 2026 to replace those who are retiring. We have a similar vacuum occurring with caregivers. I focus on these provider shortages in Chapter 21. Making matters worse, as highlighted in Chapter 22, working physicians and nurses are exhausted, and the extraordinary liabilities and complexities of the system are driving some of them to leave the field. Under enormous stress, many attempt suicide (and die), become alcoholics or addicted to opioids, and make poor medical decisions, sometimes resulting in patients losing their lives. Together, these employment and lifestyle hazards put an additional burden of billions of dollars on the US healthcare system.

Section 5: Structural Issues

Section 5 undertakes structural issues related to the overall functioning of the US healthcare industry. Chapter 23 examines the price opacity and price variance of healthcare services and how hospital price lists—called chargemasters—are protected. These lists exist against the backdrop of millions of Americans’ receiving outsized and unexpected bills every year, which I discuss in Chapter 24. In Chapter 25, I look at some of the nation’s most important healthcare laws, from President Lincoln’s False Claims Act to President Obama’s Patient Protection and Affordable Care Act. Unfortunately, the American healthcare industry must keep up with ever-changing regulations that hinder innovation. In this chapter, I also discuss some eye-opening statistics on lobbying and campaign contributions by the healthcare industry. Chapter 26 explains the different types of hospitals in the Unit- ed States and how some not-for-profit hospitals receive special tax treatment, even though they generate billions in nonoperating income every year. In Chapter 27, I illustrate the legal actions that occur across the US healthcare industry. Because of medical malpractice, healthcare providers practice defensive medicine, leading to unnecessary and aggressive diagnostic testing that contributes to wasted dollars. Chapter 28 tackles the fee-for-service payment method used in almost every part of the healthcare industry over the last several decades. Although value-based contracts between health insurance payers and providers are increasing, the whole industry needs to move toward value-based care much more rapidly.

Section 6: Healthcare IT Laggards

Section 6 shows how the healthcare industry is far behind other industries in using modern technology. Chapter 29 explains how healthcare providers use tethered electronic medical record systems, and health insurance payers use “closed” and archaic systems in their operations. Outdated systems and workflows prevent providers (and payers) from communicating with each other across the care continuum. Only those within a dedicated group can share files electronically. With these antiquated systems comes exposure to data breaches, which I also examine in this chapter.

Throughout this book, I discuss what I call the cracks in the healthcare foundation. These cracks cause the needless deaths of Americans and spiraling healthcare costs, the most imminent threats to our society. At the heart of the problem is the organization of the industry itself: the US designed the industry to contribute to the country’s gross domestic product (GDP), not to act as a service. Increasing the GDP year after year makes healthcare more expensive, which means there are no incentives to curb the growth of costs. In 2016, for example, the healthcare industry employed nearly twenty-two million people and was projected to grow at a rapid pace. The industry even has several public companies listed on the stock market.

These companies have fiduciary responsibilities to generate shareholder returns, which makes reducing the costs of care even more challenging.

This book highlights these issues to promote discussion and education about the healthcare system. I offer only possible solutions because any proposals I could make would invariably run into obstacles; require heated debate among differing parties, including policymakers; and need adaptations for real-world implementation. I deliberately leave readers with questions such as whether Medicare-for-all (or a single-payer system) is good for the nation; whether employer-sponsored health insurance, a highly touted and desired employee benefit, should be decoupled from employers; and whether we need to have price controls in the healthcare industry.

This book aims to educate you, the readers—whether you work in the industry, are a consumer of healthcare, or are otherwise engaged in the field—to be better equipped to analyze and maneuver within the industry meaningfully.

I challenge everyone working in every part of the industry to address its many structural pitfalls through creative thinking, technology, transparency, and, most importantly, a full commitment to overall long-term societal benefits. I ask pioneers and outsiders to disrupt the existing business models and develop more purposeful and useful approaches that will help providers do their real work of healing patients. And I prompt consumers to be smarter and wiser in their healthcare choices.

As professionals or consumers, nearly all Americans have already or will run into one or more of the foundational cracks I discuss. Do we, as a nation, have what it takes to address and fix these problems? Clearly understanding the system’s structural issues is the first step on that journey. This book is designed to provide the necessary knowledge. It warns Americans, especially healthcare industry players, of the dangers of maintaining the status quo.

In other words, the US healthcare industry is currently in crisis and would be even if we were not dealing with the COVID-19 pandemic. Without significant improvements, our inefficient and overly complex system will only make it worse. Moreover, our system is not equipped to handle another pandemic, and the next one will likely hit this country within the next decade or two. Such a tragedy will pose an existential threat to the healthcare industry and its constituents; another crisis will also initiate a domino effect that brings down the economy and seriously hurts or kills more people. Now is the time to get our healthcare industry in order.