The $4.87 Trillion Healthcare Ponzi Scheme: How Splitting One System into Two Could Save America Trillions.

I have ONLY two messages for you to grasp in this article:

• Understand the “Greed and Growth” Mindset to understand the Healthcare Ponzi Scheme,
• My proposal to split healthcare into two. Through de-regulation and a policy shift.

Let me explain:

When UPS and FedEx compete, shipping gets better and cheaper. When Walmart and Amazon compete, consumers win. Yet somehow, we’ve accepted an American healthcare system that operates like a monopoly, where prices are hidden and competition is stifled. See this latest visualization by Commonwealth Fund that compared health systems in developed countries:

Having led various teams and built clinical programs in the US and Canada, I’ve noticed a key pattern in healthcare’s failures. It’s not just about insurance firms, hospitals, doctors, or the pharmaceutical industry. It’s not even solely the fault of politicians or policymakers. It’s all of them — working within a fragmented system that incentivizes inefficiency.

Think about this: When Amazon grows, prices tend to fall. But when our healthcare system grows, costs explode. Why is that? The answer lies in the fact that hospital systems, insurance companies, and physician groups are playing a game of financial “hot potato”, each trying to grab as much of the pie as they can without considering the overall impact on you — the patient. This isn’t a case of innovation, it’s financial engineering at the expense of American families. I call this the “Greed & Growth” mindset.

Here’s the problem: In normal markets, “Greed & Growth” (the drive for profit) can increase efficiency through healthy competition. But in healthcare, the opposite happens. Our fragmented system allows the “Greed & Growth” mindset to drive inefficiency through consolidation and cost-shifting. Each player works to maximize its profits, but the total cost of healthcare skyrockets as a result.

Imagine this: You’re managing a building with five different property managers. Each one marks up their services without talking to the others. The result? The building doesn’t get better maintained. It just becomes more expensive to operate.

This is what happens in healthcare. It’s not that capitalism is failing; it’s that capitalism is being applied without the right incentives and market structures. And to fix it, we need to rebuild those incentives from the ground up — by splitting healthcare into two major systems.

Let’s paint a picture: Sarah, a 45-year-old teacher, just received a $4,500 bill for a simple diagnostic test for her daughter. The test could have cost $950 at an independent imaging center. This is not Sarah’s isolated issue — it’s the reality for millions of Americans trapped in a system that’s projected to eat up $7.7 trillion by 2032, according to CMS projections.

$7.7 trillion. That’s more than the GDP of Japan and Germany combined. But here’s the kicker: Americans are not getting healthier. Why? Because the system profits from sickness, not wellness. This is the core of the healthcare Ponzi scheme, which has been perpetuated by policymakers for decades.

Here’s the stark financial reality: A massive 61% of the $4.87 trillion healthcare budget is consumed by just two components — hospital systems (37%) and physician/clinical services (24%). Imagine spending $61,000 on emergency repairs and premium maintenance for a car that could be efficiently maintained for $20,000 a year with preventive care. This is not just inefficient — it’s financially devastating.

Over two decades of working in healthcare, I’ve learned that hospitals, originally meant for emergencies and complex procedures, have gradually become the default setting for care that could be managed much more affordably elsewhere. It’s like using a sledgehammer to hang a picture frame. Again, this isn’t purposeful; it’s driven by the uncoordinated actions of various organizations that all seek profits without thinking about the larger system.

But the solution isn’t radical. It’s logical. The way forward is to Fragment the current $4.7 trillion healthcare beast into two. To create two distinct healthcare markets: one for daily health maintenance (think of it like Netflix for healthcare) and another for major medical events. This separation would generate competition and drive down costs, while improving care.

However, this won’t happen naturally in the current setup. We need de-regulation and a policy shift to allow fair competition. When “Greed & Growth” is unrestrained, it leads to inefficiency. But if we separate the two types of care — preventive and acute — capitalism can work as it should.

By creating separate risk pools and competition between preventive and acute care systems, we unlock an outcome-based model that works for both the providers and the patients. Primary care providers, supported by a team of specialists, will be incentivized to keep patients healthy, which reduces costs, while hospitals can focus on efficiency and quality for necessary procedures. With the right funding models, this new structure will reduce waste and inefficiency, benefiting everyone in the process.

So the next time you hear about rising healthcare costs, remember this: the system is broken because of the “Greed & Growth” mindset. But by splitting the system into two — one focused on prevention and the other on treating medical crises — we can lower costs, improve care, and ultimately fix the healthcare Ponzi scheme. It’s a step towards a more efficient, competitive, and affordable healthcare future for all.