AMERIKA
Employers should ask hospitals a question. · Fortune · Getty Images
Eugene Litvak
Sat, August 15, 2026
Fortune.com
American employers are approaching an uncomfortable choice: absorb another large increase in healthcare costs or pass more of it on to workers. Mercer projects that employer health-benefit costs will rise 6.7% in 2026, the steepest increase in 15 years, pushing the average cost above $18,500 per employee. Nearly half of large employers expect medical plan changes in 2027 that will increase employees' out-of-pocket costs.
Before employers ask workers to pay more, however, they should ask healthcare providers a question they routinely ask every other major supplier: Are we using what we're already paying for efficiently? Companies would not respond to an inefficient manufacturing operation simply by purchasing more machinery. A CFO considering a major capital investment would first ask whether the shortage was real or resulted from how existing resources were managed. Yet employers spend enormous sums purchasing healthcare without consistently demanding the same operational discipline.
Consider hospital capacity. Emergency demand is inherently variable: hospitals cannot schedule heart attacks, automobile accidents or appendicitis. Elective procedures, however, are scheduled. Many hospitals concentrate scheduled surgeries and admissions on particular weekdays, creating artificial peaks in demand for beds, nurses, operating rooms and diagnostic services. Emergency patients may wait for inpatient beds, nurses become overloaded and surgeries are delayed. What appears to be an absolute shortage may partly be a scheduling problem. Hospitals that have addressed this artificial variability provide an important lesson.
At Cincinnati Children's Hospital Medical Center, changes in patient flow management improved access to critical care capacity while allowing surgical activity to grow. The financial benefit ultimately reached $137 million annually, and the hospital avoided a planned expansion costing more than $100 million after determining that the additional capacity was unnecessary. At The Ottawa Hospital, operational improvements were associated with approximately 40 fewer deaths and $9 million in annual savings. These examples do not mean every hospital can achieve identical results or that America never needs additional healthcare investment. They demonstrate something more basic: before purchasing additional capacity, determine whether existing capacity can be used better.
That should matter enormously to American business. Healthcare is now a major operating expense. Mercer recently found that roughly three-quarters of CFOs rank healthcare among their five biggest operating cost concerns. Average family health insurance premiums reached $26,993 last year, according to KFF, with workers contributing $6,850 before deductibles and other cost sharing. When costs rise, employers can absorb them, leaving less money for wages, hiring and investment, or shift more of the burden to employees. But large self-insured employers have another lever: purchasing power. They can demand greater operational accountability from the organizations providing care. When negotiating with health systems, insurers and provider networks, employers should ask not only what services cost, but why. Before accepting higher prices or paying for additional capacity intended to relieve overcrowding, they should ask whether avoidable peaks in scheduled admissions contribute to the problem and what operational improvements have been attempted first. This is not an argument for employers to micromanage medicine. Diagnosis and treatment belong to clinicians. But scheduling predictable demand, deploying capacity and managing patient flow are operational questions. Every sophisticated business manages comparable questions in its own industry. Healthcare should not be exempt.
The principle extends beyond hospitals. At St. Thomas Community Health Center, a Federally Qualified Health Center in New Orleans serving many uninsured and Medicaid patients, redesigned appointment operations enabled 80% to 90% of requests for same- or next-day care to be met while patient satisfaction with access reached 97%. Better access began not with constructing another clinic or hiring an entirely new workforce, but with examining how existing capacity was used.
None of this eliminates the forces driving healthcare inflation. New drugs and technologies are expensive. An aging population requires more care. Labor shortages are real. Some facilities genuinely need expansion. Operational improvement is not a substitute for necessary investment; it should come before unnecessary investment. That distinction matters especially now. Families feel healthcare costs through premiums, deductibles and prescriptions; employers see them in compensation budgets; government sees them in Medicare and Medicaid spending. A recent Gallup poll found healthcare affordability at its lowest level in five years. Healthcare cost is a leading economic concern among Americans across party lines as the midterm elections approach.
The conventional debate asks who should pay more: government, employers or patients. There should be a question before that one: What are we paying for that we could be using better? Employers have considerable leverage to force that question into the healthcare conversation. They don't need to decide how hospitals should operate, but they should demand evidence that operational efficiency has been examined before higher prices and additional capacity are accepted as unavoidable.
America will inevitably spend more on some forms of healthcare. Medical progress itself guarantees that. But the answer to every shortage cannot be another check. Before employers pass the next increase to their workers, they should make sure they are getting everything they can from what they already buy.
McKinsey senior partners: America’s growth strategy demands a health reset
American employers are approaching an uncomfortable choice: absorb another large increase in healthcare costs or pass more of it on to workers. Mercer projects that employer health-benefit costs will rise 6.7% in 2026, the steepest increase in 15 years, pushing the average cost above $18,500 per employee. Nearly half of large employers expect medical plan changes in 2027 that will increase employees' out-of-pocket costs.
Before employers ask workers to pay more, however, they should ask healthcare providers a question they routinely ask every other major supplier: Are we using what we're already paying for efficiently? Companies would not respond to an inefficient manufacturing operation simply by purchasing more machinery. A CFO considering a major capital investment would first ask whether the shortage was real or resulted from how existing resources were managed. Yet employers spend enormous sums purchasing healthcare without consistently demanding the same operational discipline.
Consider hospital capacity. Emergency demand is inherently variable: hospitals cannot schedule heart attacks, automobile accidents or appendicitis. Elective procedures, however, are scheduled. Many hospitals concentrate scheduled surgeries and admissions on particular weekdays, creating artificial peaks in demand for beds, nurses, operating rooms and diagnostic services. Emergency patients may wait for inpatient beds, nurses become overloaded and surgeries are delayed. What appears to be an absolute shortage may partly be a scheduling problem. Hospitals that have addressed this artificial variability provide an important lesson.
At Cincinnati Children's Hospital Medical Center, changes in patient flow management improved access to critical care capacity while allowing surgical activity to grow. The financial benefit ultimately reached $137 million annually, and the hospital avoided a planned expansion costing more than $100 million after determining that the additional capacity was unnecessary. At The Ottawa Hospital, operational improvements were associated with approximately 40 fewer deaths and $9 million in annual savings. These examples do not mean every hospital can achieve identical results or that America never needs additional healthcare investment. They demonstrate something more basic: before purchasing additional capacity, determine whether existing capacity can be used better.
That should matter enormously to American business. Healthcare is now a major operating expense. Mercer recently found that roughly three-quarters of CFOs rank healthcare among their five biggest operating cost concerns. Average family health insurance premiums reached $26,993 last year, according to KFF, with workers contributing $6,850 before deductibles and other cost sharing. When costs rise, employers can absorb them, leaving less money for wages, hiring and investment, or shift more of the burden to employees. But large self-insured employers have another lever: purchasing power. They can demand greater operational accountability from the organizations providing care. When negotiating with health systems, insurers and provider networks, employers should ask not only what services cost, but why. Before accepting higher prices or paying for additional capacity intended to relieve overcrowding, they should ask whether avoidable peaks in scheduled admissions contribute to the problem and what operational improvements have been attempted first. This is not an argument for employers to micromanage medicine. Diagnosis and treatment belong to clinicians. But scheduling predictable demand, deploying capacity and managing patient flow are operational questions. Every sophisticated business manages comparable questions in its own industry. Healthcare should not be exempt.
The principle extends beyond hospitals. At St. Thomas Community Health Center, a Federally Qualified Health Center in New Orleans serving many uninsured and Medicaid patients, redesigned appointment operations enabled 80% to 90% of requests for same- or next-day care to be met while patient satisfaction with access reached 97%. Better access began not with constructing another clinic or hiring an entirely new workforce, but with examining how existing capacity was used.
None of this eliminates the forces driving healthcare inflation. New drugs and technologies are expensive. An aging population requires more care. Labor shortages are real. Some facilities genuinely need expansion. Operational improvement is not a substitute for necessary investment; it should come before unnecessary investment. That distinction matters especially now. Families feel healthcare costs through premiums, deductibles and prescriptions; employers see them in compensation budgets; government sees them in Medicare and Medicaid spending. A recent Gallup poll found healthcare affordability at its lowest level in five years. Healthcare cost is a leading economic concern among Americans across party lines as the midterm elections approach.
The conventional debate asks who should pay more: government, employers or patients. There should be a question before that one: What are we paying for that we could be using better? Employers have considerable leverage to force that question into the healthcare conversation. They don't need to decide how hospitals should operate, but they should demand evidence that operational efficiency has been examined before higher prices and additional capacity are accepted as unavoidable.
America will inevitably spend more on some forms of healthcare. Medical progress itself guarantees that. But the answer to every shortage cannot be another check. Before employers pass the next increase to their workers, they should make sure they are getting everything they can from what they already buy.
McKinsey senior partners: America’s growth strategy demands a health reset
Workers redo the lawn where the Salute to America 250 stage was as smoke from massive wildfires in Canada and Minnesota engulf the Washington, D.C. skyline, reducing visibility and casting a colored haze over the Washington Monument on July 17, 2026 in Washington, D.C. Authorities are continuing to monitor for unsafe conditions as air quality alerts are in effect across a vast portion of the United States. · Fortune · Finn Gomez/Getty Images
Pooja Kumar, Eric Kutcher
Sat, August 15, 2026
Fortune.com
Despite spending more on healthcare than any other country, Americans are on track to spend more years in poor health in 2050 than they did in 2000 if current trends hold.
That gap – between what we spend and how healthy we are – should concern anyone who cares about the country's future. Longer lives are a gift. But longer lives marked by chronic illness strain families, weaken the workforce, and raise public costs.
There is another path, and the US already has the tools in hand. New analysis from the McKinsey Health Institute finds that scaling proven, cost-effective interventions – not speculative breakthroughs – could add 19 million years of healthy life by 2050 and roughly $3.2 trillion to the U.S. economy.
These figures are not a "healthcare savings" story. They reflect a fundamental expansion of productive capacity: more Americans participating fully in the workforce, fewer workers constrained by illness, and fewer careers cut short by caregiving obligations.
Hospitals, specialists, and cutting-edge therapies in the US are among the world's best. However, expertise in treating disease has not translated into sustained gains in healthy life expectancy. The US system is less consistent at preventing illness, detecting it early, or slowing its progression. The result is a system that excels once patients are sick, but too often intervenes late — after costs have mounted and options have narrowed.
When disease sidelines working-age adults, labor-force participation softens and output per worker falls. Chronic, untreated, or poorly managed conditions suppress productivity through both absenteeism and presenteeism. And as care demands pull more Americans – often in midcareer – out of paid work to support aging parents or ailing partners, the labor pool shrinks at precisely the moment it needs to grow.
Rising levels of poor health also foreshadow higher long-term public spending on health, which can crowd out investments in infrastructure, education, and technology; all are critical to sustained growth.
This burden is not inevitable. Also according to the analysis, nearly two-thirds of avoidable disease burden in the United States could be addressed with preventive and early interventions that are already proven to work. In addition to generating roughly four dollars in economic value for every dollar invested, these investments could yield about seven additional healthy years over a typical life.
What stands between today's outcomes and tomorrow's potential is not a lack of knowledge; it is the incentives to create pathways for healthier lives. This is not solely a question for hospitals or physicians but requires a fundamental reassessment of healthy life from birth to death. Health outcomes are shaped long before a patient enters a clinic – by safe and healthy foods, the environments where we live and work, education systems, community design, and the incentives that shape daily choices.
A primary care physician recently told us: "I spend most of my day managing complications we could have prevented five years ago." Diseases become worse, leading to higher costs and less possibility of reversal. We have seen what works. Tobacco control offers a clear example. Smoking remains a significant health risk in the United States, but the scale of reduction shows what sustained policy action can achieve. A combination of higher tobacco taxes, smoke-free laws, public education campaigns, and restrictions on advertising helped drive smoking rates down from roughly 40 percent of adults in the 1960s-70s to around 11 percent today. The results have been fewer heart attacks, fewer smoking-related cancer deaths, and longer lives. These gains did not require a medical miracle. They came from consistent, evidence-based policies applied at scale. Healthier people improve economies through lower medical costs, higher productivity, and fewer premature deaths during peak working years.
Other high-impact interventions are similarly well established: controlling blood pressure to prevent heart disease and stroke, improving maternal and early childhood nutrition, expanding early cancer detection, and reducing obesity and diabetes through community-level changes. The evidence is strong. What has been missing is our collective ability to consistently incentivize and scale these things.
That requires a shift in how the nation thinks about health. We should move beyond the familiar "spend more" versus "spend less" argument. Instead, the focus should be measurable gains in healthy years and holding accountability for delivering them.
This agenda would align financial incentives so that prevention and early intervention are rewarded as consistently as treatment after illness occurs. It would prioritize scaling known interventions with demonstrated health and economic impact. It would require asking questions like, "What would it take to screen every adult American for hypertension and depression annually, and ensure access to effective treatment?"
As a society, we love to dream about innovation changing our lives through the lens of moonshots. What if doing what we know works already is our moonshot?
We should not be bound to a future in which longer lives come with more years of illness. A health reset — grounded in measurable outcomes and disciplined capital allocation – has the potential to strengthen labor supply, reinforce fiscal stability, and underpin long-term competitiveness. If the United States is serious about sustaining growth in the decades ahead, it will need to treat health not as a line item, but as part of its economic foundation.
The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.
Sat, August 15, 2026
Fortune.com
Despite spending more on healthcare than any other country, Americans are on track to spend more years in poor health in 2050 than they did in 2000 if current trends hold.
That gap – between what we spend and how healthy we are – should concern anyone who cares about the country's future. Longer lives are a gift. But longer lives marked by chronic illness strain families, weaken the workforce, and raise public costs.
There is another path, and the US already has the tools in hand. New analysis from the McKinsey Health Institute finds that scaling proven, cost-effective interventions – not speculative breakthroughs – could add 19 million years of healthy life by 2050 and roughly $3.2 trillion to the U.S. economy.
These figures are not a "healthcare savings" story. They reflect a fundamental expansion of productive capacity: more Americans participating fully in the workforce, fewer workers constrained by illness, and fewer careers cut short by caregiving obligations.
Hospitals, specialists, and cutting-edge therapies in the US are among the world's best. However, expertise in treating disease has not translated into sustained gains in healthy life expectancy. The US system is less consistent at preventing illness, detecting it early, or slowing its progression. The result is a system that excels once patients are sick, but too often intervenes late — after costs have mounted and options have narrowed.
When disease sidelines working-age adults, labor-force participation softens and output per worker falls. Chronic, untreated, or poorly managed conditions suppress productivity through both absenteeism and presenteeism. And as care demands pull more Americans – often in midcareer – out of paid work to support aging parents or ailing partners, the labor pool shrinks at precisely the moment it needs to grow.
Rising levels of poor health also foreshadow higher long-term public spending on health, which can crowd out investments in infrastructure, education, and technology; all are critical to sustained growth.
This burden is not inevitable. Also according to the analysis, nearly two-thirds of avoidable disease burden in the United States could be addressed with preventive and early interventions that are already proven to work. In addition to generating roughly four dollars in economic value for every dollar invested, these investments could yield about seven additional healthy years over a typical life.
What stands between today's outcomes and tomorrow's potential is not a lack of knowledge; it is the incentives to create pathways for healthier lives. This is not solely a question for hospitals or physicians but requires a fundamental reassessment of healthy life from birth to death. Health outcomes are shaped long before a patient enters a clinic – by safe and healthy foods, the environments where we live and work, education systems, community design, and the incentives that shape daily choices.
A primary care physician recently told us: "I spend most of my day managing complications we could have prevented five years ago." Diseases become worse, leading to higher costs and less possibility of reversal. We have seen what works. Tobacco control offers a clear example. Smoking remains a significant health risk in the United States, but the scale of reduction shows what sustained policy action can achieve. A combination of higher tobacco taxes, smoke-free laws, public education campaigns, and restrictions on advertising helped drive smoking rates down from roughly 40 percent of adults in the 1960s-70s to around 11 percent today. The results have been fewer heart attacks, fewer smoking-related cancer deaths, and longer lives. These gains did not require a medical miracle. They came from consistent, evidence-based policies applied at scale. Healthier people improve economies through lower medical costs, higher productivity, and fewer premature deaths during peak working years.
Other high-impact interventions are similarly well established: controlling blood pressure to prevent heart disease and stroke, improving maternal and early childhood nutrition, expanding early cancer detection, and reducing obesity and diabetes through community-level changes. The evidence is strong. What has been missing is our collective ability to consistently incentivize and scale these things.
That requires a shift in how the nation thinks about health. We should move beyond the familiar "spend more" versus "spend less" argument. Instead, the focus should be measurable gains in healthy years and holding accountability for delivering them.
This agenda would align financial incentives so that prevention and early intervention are rewarded as consistently as treatment after illness occurs. It would prioritize scaling known interventions with demonstrated health and economic impact. It would require asking questions like, "What would it take to screen every adult American for hypertension and depression annually, and ensure access to effective treatment?"
As a society, we love to dream about innovation changing our lives through the lens of moonshots. What if doing what we know works already is our moonshot?
We should not be bound to a future in which longer lives come with more years of illness. A health reset — grounded in measurable outcomes and disciplined capital allocation – has the potential to strengthen labor supply, reinforce fiscal stability, and underpin long-term competitiveness. If the United States is serious about sustaining growth in the decades ahead, it will need to treat health not as a line item, but as part of its economic foundation.
The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.
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