When the Market Doesn’t Reward Health

What if, in healthcare, profit follows complexity and dependency instead of performance?

Hospitals, physicians, and insurers are investing billions of dollars to improve population health and make care more affordable. Every major health system now has a value strategy. Every payer is building a population health infrastructure. Every boardroom is fluent in value, prevention, and affordability.

And yet, despite the rhetoric, the data remains stubborn: costs continue to rise faster than GDP, the gap between life expectancy and spending widens, and the health of our communities, particularly those most in need, shows little sustained improvement.

So perhaps it’s time to ask a more difficult, uncomfortable question: What if the market simply doesn’t reward better health and affordability?

The system is working exactly as designed

In most industries, the market rewards performance. Companies that deliver better products, lower costs, and higher satisfaction gain share and profitability. But healthcare operates under a different gravitational pull. The dominant incentives still reward activity rather than outcomes. Billable events, not avoided ones, occupancy, not wellness, and growth in volume, not a reduction in need, still drive economic success in health care.

For all the talk of “value,” the economic scaffolding of American healthcare still tilts toward utilization. The result is a system that is not failing; rather, it succeeds at what it was built to do to—monetize disease rather than to eliminate it. That truth doesn’t make health leaders complicit. It makes them human participants in a system that punishes the very outcomes they are asked to produce.

The questions beneath the strategy

When you peel back the layers of strategic plans and board presentations, several deeper questions emerge that few organizations are truly incentivized to answer:

• Value vs. volume: Have our value-based models truly displaced volume-based incentives, or are they merely layered on top of them, creating dual incentives that neutralize progress?
• Profit signals: In a market economy, outcomes improve when profit follows performance. What if, in healthcare, profit follows complexity and dependency instead?
• Mission versus margin: Are we operating in an environment where every actor in the ecosystem—payer, provider, employer, regulator—depends on the illusion of reform for legitimacy, but not its success for survival?
• Economic gravity: Is the cost of illness the engine of economic activity for health enterprises, making true prevention a deflationary force no one can afford to scale?

These are not philosophical questions. I believe they are the unspoken design flaws that explain why, despite decades of effort and billions of dollars invested, we still can’t reconcile cost, quality, and access.

When prevention becomes a threat

Consider this: If every major prevention and chronic disease management program suddenly worked perfectly, the system would face an economic crisis. Hospital margins would collapse. Physician networks built around procedural throughput would falter. Payers would lose premium justification. The stock prices of device and pharmaceutical firms would crater.

That’s the paradox. The health system’s fiscal survival depends, in part, on the persistence of disease. Prevention, which we claim as a moral north star, is economically destabilizing to a system designed around the treatment of failure. Until we realign incentives so that better health is a profitable outcome, our best-intentioned strategies will continue to collide with economic realities.

What leaders must confront

The leadership challenge, then, is not merely operational. It is existential. Are we willing to confront the underlying truths of what we reward?

If we are serious about improving population health and affordability, we must be equally serious about confronting the incentives that make inefficiency profitable and prevention unsustainable. That means asking:

• Who captures the savings when health improves?
• Who bears the loss when utilization drops?
• Are we ready to redesign financial relationships so that shared savings become shared prosperity, rather than temporary subsidies?

These questions are uncomfortable because they challenge institutional survival instincts. Yet the organizations that will lead the next decade of healthcare will be those willing to disrupt their own revenue logic before the market does it for them.

The call to redesign the reward

It’s time for leaders to move from rhetoric to redesign to stop optimizing within a misaligned system and start rebuilding one that rewards the outcomes we claim to value.

We can’t keep promising affordability while our balance sheets depend on scarcity pricing. We can’t keep preaching prevention while our economic engines require throughput.

The uncomfortable truth is that the market for health will not emerge naturally. It must be constructed deliberately through new reward structures, shared-risk models, and a willingness to abandon legacy definitions of “success.”

Until profit follows health, reform will remain a moral aspiration constrained by economic design. The question isn’t whether we can improve population health. It’s whether we are finally willing to create a market that pays us to do it.