Short fix on long-term solutions to American health care financial crisis

I think every American physician agrees that our system of providing health care to all Americans is broken and in dire need of fixing. There are short-term fixes, like lowering overhead expenses, improving productivity or managed care plans. But certainly, increased reimbursements from insurance companies are unlikely.

This article will offer long-term examples that have the potential to really fix American health care.

Physicians must spend time with patients to encourage them to practice healthy lifestyle behaviors, including daily exercise; a diet focused on nutrient-dense foods, lean proteins, and fruits and vegetables; and avoiding highly processed food. As a long-term fix, the result of encouraging patients to lead healthy lifestyles will be fewer chronic diseases — i.e., heart disease, arthritis, diabetes, and cancer — which represent the largest expenditure in the bloated health care budget, which is now more than $4 trillion per year.

However, radically changing the American diet to shift away from highly processed, calorie-dense meals toward higher-fiber foods, with a focus on whole grains, greens, vegetables and fruits, will be a difficult task that requires compensating physicians who spend time discussing healthy nutrition and healthy behaviors with patients. Doctors will need to be more aggressive in treating obesity and discussing with patients the dangers of excess alcohol and substance abuse.

The Holy Grail on this topic may be to financially reward patients and physicians for improvements in patients who practice healthy lifestyles. Maybe these are outlandish ideas today, but we need to think creatively and start offering incentives to the population that will change behavior.

Rethinking how and where we spend

If we are honest, the amount of money we spend on our patients at the end of their lives is money not well spent. According to one estimate, end-of-life care accounts for about 10%-12% of all health care spending. One report estimates that the final month of hospice care, which is significantly less than in-hospital care, costs an average of $17,845.

To control spiraling health care costs, we must consider reducing expenditures on futile and low-value end-of-life care. We have achieved success in managing acute medical conditions, and with the use of technology, we have become accustomed to extending lifespan (quantity) without considering health span (quality).

American medicine needs to better support and create norms and expectations for palliative and hospice care to become the standard for those with terminal and chronically progressive illnesses. Funding for home care management for the frail elderly can prevent or replace emergency room and hospital care, be less expensive and be associated with higher patient satisfaction.

Health care costs also include attention to the cost of caring for patients who are disabled and chronically ill. Our current ambulatory clinics, urgent care centers and hospital emergency rooms are poorly designed for these patients. In addition to excess costs, there is patient inconvenience and inappropriate use of physician resources when we don’t consider these patients. By managing care through telemedicine and treating patients at home rather than in the hospital, we can reduce health care costs. These options will improve patient satisfaction and caregiver approval.

We are wasting large sums of money and contributing to the health care budget. It requires an army of administrative and technical staff from both medical staff offices and insurers. A smoke-and-mirrors system that reimburses insurance payers to compensate for inadequate reimbursement from government payers inevitably leads physicians to cherry-pick patients to achieve a better mix of payers.

Perhaps the time has arrived for physicians to consider universal coverage for all U.S. citizens, with a common payer and a common reimbursement schedule. The benefit would greatly reduce the administrative burden on both payers and physicians.

The time has arrived to remove reimbursement and compensation models that reward the fee-for-service system. This model incentivizes more care rather than better health outcomes. The current reliance on fee-for-service payment methodology needs to be replaced with monthly per-member capitation funds that utilize global health care budgets and targets. Physician compensation needs to be shifted away from volume-based incentives toward quality-based models.

Savings can be achieved through a coordinated care process. Examples of coordinated care have been at Kaiser, Mayo Clinic, Cleveland Clinic and others that are large enough to receive population-level payments and then can coordinate patient care and create compensation incentives that support outcomes and experience of their patients rather than how much is done to them.

The benefit of coordinated care is the prevention of test and imaging study duplication. The process also improves care efficiency, allowing patients to move seamlessly from one provider or specialty to another without significant delays.

The current health care system is overly reliant on acute care hospitals and medical centers. These institutions tend to be the most expensive to receive care. Promoting home care, ambulatory surgery centers and other outpatient venues reduces health care costs. This long-term solution creates alternative care venues that use team-based models, allowing physicians to work at the top of their license.

On average, physicians spend 15.5 hours on paperwork and administration each week, including nine hours on electronic health record documentation alone, according to a 2023 survey. Physicians are taking their work home and completing medical records after leaving their clinics. This uncompensated time that prevents physicians from interacting with family and friends is a major contributor to burnout.

Technology as a long-term fix

Artificial intelligence has the potential to reduce costs and decrease physician burnout. An example is the use of an ambient electronic medical record (EMR) with a voice-to-text recording of the doctor-patient encounter. This use of AI allows physicians to focus on the patient rather than the computer.

In February of 2025, Ambient Healthcare released an EMR that listens to patients during the doctor-patient encounter, takes notes and provides appropriate medical coding. The technology helps doctors focus on their patients and reduces the risk of billing errors and costly denials.

The benefits of voice-to-text documentation include the following:

• Reduces time spent on notes by 50%.
• Modern speech engines recognize medical vocabulary with 95%-plus accuracy.
• Helps maintain complete, timely and compliant documentation, improving audit readiness.
• Reduces dependency on transcription services or data-entry staff.

AI can be used for expensive administrative tasks, such as requesting prior authorization or determining insurance coverage before the patient comes to the office. There is potential for AI to help determine whether a patient needs inpatient treatment versus ongoing observation.

The bottom line

Health care in America has reached a critical fork in the road. It is in a precarious position and is in jeopardy. The expenses incurred by hospitals and medical practices to deliver medical care are growing much faster than reimbursements.

The take-home message is that this real-world scenario places our health care system on life support. The wake-up call is that we must make long-term changes to deliver the care our patients have come to expect.

Neil Baum, M.D., is a professor of clinical urology at Tulane University in New Orleans. Dr. Baum is the author of several books, including the bestselling book Marketing Your Medical Practice: Ethically, Effectively, and Economically, which has sold over 225,000 copies and has been translated into Spanish.