America’s Most Expensive Broken System

We all know it — American health care costs more than any other nation. Nobody working inside the system needs another headline to prove that point. We see it in the denials, the administrative bloat, the endless billing gymnastics we perform just to keep the lights on. But it’s worth asking: why does it cost so much? 

We talk about “burnout” and “moral injury” like they’re emotional states, but really, they’re symptoms of an economic machine that’s devouring itself. The price of care isn’t just bankrupting patients — it’s breaking providers, too.

 Moral injury is the psychological distress health care workers experience when they feel unable to act according to their ethical or moral values, often because of systemic constraints. The concept of moral injury originated in military psychology, and Dr. Wendy Dean, a Working Healthcare podcast guest, helped bring the term into the health care context and public conversation. 

Every one of us has felt the fragmentation firsthand: care coordination that exists in theory but not in practice, referrals that vanish into EHR limbo and discharge summaries that never make it to primary care. We spend more time moving information than we do moving the needle on patient outcomes.

 And fragmentation costs money — a staggering amount of it. A 2023 Annals of Internal Medicine study estimated that administrative waste accounts for up to 25 percent of total U.S. health spending, roughly $1.2 trillion a year. One in every four dollars goes to forms, billing codes, compliance and IT systems that don’t talk to each other. For those of us inside the machine, it’s not an abstraction — it’s daily life.

 Then there is the invisible middle layer that quietly became the most powerful force in American health care: pharmacy benefit managers (PBMs). These giants are the middlemen between insurers, physicians and pharmacies.

 These gatekeepers were initially created to help health plans and employers manage prescription drug benefits more efficiently and control costs. In reality, they wedge themselves between physicians and pharmacies, deciding which medications are covered, cutting secret rebate deals with drug manufacturers and controlling how much pharmacies get paid. Clinicians see the fallout every day when a patient can’t get the medication they’re prescribed because the PBM dictates an alternative — not based on efficacy, but on margin.

According to the Drug Channels Institute, the “gross-to-net bubble” — the gap between brand-name drug sales at list prices and what manufacturers actually receive after rebates and discounts — reached an estimated $356 billion in 2024. That pool of rebates and price concessions is divided among PBMs, insurers, government programs and other payers, but opaque contracts make it impossible to know exactly how much PBMs keep, even as each of the Big Three operates inside a business unit with well over $100 billion in annual revenue.

 Three PBMs — CVS Caremark, OptumRx and Express Scripts — now control about 80 percent of all U.S. prescriptions and sit inside insurance giants. CVS Health owns CVS Caremark, along with Aetna on the insurance side and a vast retail and mail-order pharmacy network. The Cigna Group owns Express Scripts under the Evernorth banner, while Cigna runs the health plans.

 UnitedHealth Group alone is the third-highest revenue company in America, bringing in roughly $400 billion in 2024, with more than 2,600 subsidiaries worldwide. They’re not just an insurance company anymore — they now control multiple stages of the health care system, including health plans, a PBM, pharmacies, one of the largest physician and clinic networks in the country, surgery and imaging centers, home health services, a major claims clearinghouse and extensive data and analytics businesses.

 The referee, the coach and the scorekeeper now all work for the same team — and the scoreboard tilts their way. This level of concentration would even make Big Tech blush.

 U.S. law allows PBMs to be owned by, to own or merge with health insurers because vertical integration is permitted and antitrust laws focus on competition, not fairness. As a result, one company can legally control multiple stages of the health care supply chain.

 The cost pressures flow downhill, and the people closest to the patient feel them the most. Clinicians did not go into health care to feed spreadsheets, but that’s where we’ve landed — spending more time documenting, coding and chasing prior authorizations than delivering care.

 Research shows physicians now spend two hours on EHR and administrative work for every hour of direct patient care. Nurses are tracking quality metrics that have little to do with the bedside. Clinical leaders are evaluated by “efficiency,” not by outcomes or compassion. Meanwhile, reimbursement lags behind inflation and “productivity” demands grow.

 Pharmaceutical pricing is an easy villain, but it lets the real culprits off the hook. Drugmakers collect about 14 percent of total U.S. health spending, and nearly half of every dollar spent on prescription drugs never reaches the manufacturer at all; it gets siphoned off by PBMs, insurers, rebates and distribution markups that add no clinical value while pushing patients’ out-of-pocket costs higher.

A 2025 analysis of the Bayh-Dole Act estimates that nearly half of the world’s new drug pipeline originates in the United States, which means U.S. patients are helping fund real innovation — but the financial pain they feel at the counter is driven largely by how PBMs and other middlemen structure formularies, spreads and fees. Even if drug prices were slashed in half, the fundamental spending trajectory would barely budge.

 The Peterson-KFF Health System Tracker, an independent U.S. research initiative that compares health systems across high-income countries, has documented massive overspending on health care in the United States. In 2024 the United States spent more than $14,000 per person on health care, nearly twice the average in other high-income countries and roughly 17 percent of GDP. Yet this price tag does not buy better health: U.S. life expectancy is about 78 years, more than two years below the average.

 Preventable and maternal mortality remain high, far exceeding rates in most other high-income countries. Americans are paying more than ever but getting worse or below-average outcomes, which suggests much of this spending is absorbed by bureaucracy and inefficiency, not better care.

 Some defenders say the United States looks worse only because it counts deaths differently, but international statistics are harmonized, and those technical differences are small. The gap is real; Americans die younger and more often from preventable causes than people in other high-income countries.

 Hospital and physician group consolidation, often marketed as “efficiency,” has been another inflation engine. Studies consistently show that mergers lead to price hikes of 10 percent to 20 percent, without meaningful quality gains. When a single health system dominates a region, it controls both the rates and the referral network. The so-called efficiencies rarely reach the front lines: the patient.

 For those of us inside the system, this isn’t just frustrating — it’s demoralizing. We’re asked to do more with less, to optimize workflows, to hit benchmarks that make for great boardroom presentations but little difference in patient lives.

 We know the difference between clinical and financial necessity, but physicians are forced to practice somewhere in between. Each denial, appeal or “not medically necessary” clawback erodes a little more of the trust that drew us to this profession.

 The moral injury isn’t just about long hours or lack of support; it’s about watching a system built for healing evolve into one built for Wall Street — and realizing that we’re the ones keeping it running.

 There are no easy fixes, but we can name the levers. The first is transparency. We can’t fix what we can’t see. We need real data — what insurers actually pay hospitals, what PBMs keep and what portion of our labor supports care versus profit.

The second is competition. Health care isn’t a market where three or four corporations should dominate entire sectors. We need to break up vertical integration and restore antitrust enforcement that actually has teeth.

 And third, we have to realign incentives around outcomes, not volume. Value-based care has become a buzzword, but true value means freeing clinicians from administrative paralysis and giving them time to deliver preventive health care, not just reactionary health care.

Here’s the hard truth: no one is coming to save the system. Policymakers move slowly. Executives answer to shareholders. The leverage sits with those of us inside — the clinicians, administrators, care managers and operations leaders who see the dysfunction up close.

 We can start to fix the system by refusing to normalize it. We can push for transparency with our health care business partners, question decisions made for profit over patients and advocate for models that honor the profession we chose.

 Health care doesn’t have to be this expensive or this exhausting. It’ll change when we start redesigning it from within — when those closest to the care start saying the quiet parts out loud.

 So here’s the question worth asking in every meeting, policy discussion and budget cycle: if you could move one lever first — PBMs, pricing, consolidation, benefit design or something else — which would you choose?

 Because until we start pulling those levers ourselves, we’ll keep paying more for less, and the cost — financial, professional and moral — will keep rising.