AIP discussion paper

Healthcare for Profit

Detailed proposal and questions for review · Updated November 1, 2026

When the Customer's Death Is More Profitable Than Their Life

The Core Thesis

The concern is whether payment arrangements reward access, prevention and useful care or create incentives for avoidable billing, denial and market power. Profit is not itself incompatible with care: the proposal retains private providers and seeks to align their incentives with patient outcomes. Communities would direct spending under state oversight, with Stability Accounts as the long-term funding foundation.

The Numbers: What We Pay vs. What We Get

Figures retained in this discussion are earlier draft estimates or scenarios unless a dated source is cited here. They are not current measurements, adopted budgets or validated AIP outcomes. Use the linked policy chapter for the current mechanism and corrected arithmetic.

What We Spend

Total US healthcare spending (2023): $4.5 trillion
Per capita: $13,493/person (highest in world)
Percentage of GDP: 17.3% (highest in world)
Comparison - Germany: $7,383/person, universal coverage
Comparison - UK: $5,138/person, universal coverage
Comparison - Canada: $5,741/person, universal coverage
We spend 2-3x more per person than comparable countries

What We Get

Life expectancy: 76.4 years (46th globally, lowest among wealthy nations)
Infant mortality: 5.4/1,000 (highest among wealthy nations)
Maternal mortality: 23.8/100,000 (highest among wealthy nations, rising)
Preventable deaths: Highest rate among peer countries
Uninsured: 28 million (8.5%)
Underinsured: 40+ million more
Medical debt: $220 billion, #1 cause of bankruptcy

We pay the most and get the worst outcomes among wealthy nations. This isn't failure—it's the predictable result of a profit-optimized system.

The Perverse Incentives

Insurance Companies: Profit From Denial

Health insurance companies make money by collecting premiums and denying claims. Their incentive structure:

Revenue: Premiums collected (more is better)
Costs: Claims paid (less is better)
Profit = Premiums - Claims - Overhead
Therefore: Every denied claim is profit. Every approved claim is loss.

The business model:

Deny claims initially (many people give up)
Require prior authorization (delays care, some die waiting)
Create networks that exclude expensive specialists
Hire doctors specifically to deny claims ("medical directors")
Make appeals processes Byzantine and exhausting
Drop unprofitable (sick) customers when possible
Raise premiums faster than wages, forever

Administrative overhead: Private insurance: 15-30%. Medicare: 2-3%. The difference is the cost of denying care—claims reviewers, appeals processors, prior auth staff, lawyers, executives, shareholders.

Hospitals: Profit From Volume and Acuity

Hospitals make money from procedures, not outcomes. Incentives:

More procedures = more revenue. Unnecessary tests, surgeries, and interventions are profitable.
Sicker patients = higher reimbursement. Prevention reduces revenue.
Emergency care = maximum billing. Primary care that prevents emergencies is less profitable.
Readmissions = more revenue. Actually fixing the problem means one-time payment.
Consolidation = pricing power. Buy competitors, raise prices, no alternatives.

"Non-profit" hospitals: Same incentives, just called "surplus" instead of "profit." Executives still make millions. They still sue patients for medical debt. They still close unprofitable (poor neighborhood) facilities.

Pharmaceutical Companies: Profit From Sickness

Pharma makes money from chronic disease, not cures. Incentives:

Maintenance drugs > cures. Insulin for life beats cure for diabetes. Monthly prescriptions beat one-time treatments.
Patent games: "Evergreening" extends monopolies. Pay generic makers to delay. Reformulate to restart clock.
Price whatever market bears: Insulin costs $3-8 to make, sells for $300-400. Epinephrine (EpiPen) went from $100 to $600+.
Marketing > R&D: Pharma spends 2x on marketing/admin as on research. Create demand, don't solve problems.
Opioid crisis: Pharma made billions pushing addictive drugs. 500,000+ dead. Companies paid fines, kept profits.
Orphan drugs: Price rare disease treatments at $100K-2M/year. Patients pay or die.

Doctors: Profit From Fee-for-Service

Most doctors genuinely want to help patients. But the system pays them for doing things, not for outcomes:

15-minute appointments maximize billing
Ordering tests generates revenue
Referrals to specialists (in your group) increase revenue
Procedures pay 3-10x more than cognitive work (talking, thinking)
Spending time on prevention doesn't pay
Documentation for billing consumes hours that could go to patients

Good doctors fight these incentives constantly. The system is designed to make good medicine harder and less profitable than bad medicine.

Where the Money Goes

The Overhead Tax

Administrative costs: $1+ trillion/year (25-30% of total spending)
Billing and insurance-related costs: $500+ billion/year
Comparison: Canada spends 17% on admin, we spend 34%
The difference: ~$500 billion/year wasted on bureaucracy that exists only because of our fragmented system

Executive Compensation

Health insurance CEO pay (2023):
UnitedHealth: $23.5 million
CVS/Aetna: $21.3 million
Cigna: $21.1 million
Elevance (Anthem): $20.9 million
Humana: $16.7 million
Paid to deny your claims.
Hospital CEO pay:
Average large hospital CEO: $1-5 million
Top "non-profit" hospital CEOs: $10-25 million
Same hospitals suing patients for medical debt

Shareholder Returns

Health insurance profits (2023): $40+ billion combined
Pharma profits: $100+ billion
Hospital system profits: $50+ billion
Stock buybacks and dividends: Tens of billions annually
Every dollar to shareholders is a dollar not spent on care.

The Human Cost

Deaths

Deaths from lack of insurance: 26,000-45,000/year (various studies)
Deaths from underinsurance: Unknown but substantial (people skip care due to cost)
Deaths from delayed care: Prior authorization kills (documented cases of patients dying while waiting for approval)
Deaths from medical errors: 250,000+/year (third leading cause of death)
Opioid deaths: 500,000+ cumulative (pharma-driven epidemic)

Financial Devastation

Medical bankruptcy: 530,000 families/year (66% of all bankruptcies)
Medical debt: $220 billion total, 100 million Americans affected
GoFundMe: 1/3 of campaigns are for medical bills. This is our system.
Rationing: 40% of Americans skipped care due to cost in past year
Insulin rationing: 1 in 4 diabetics ration insulin. Some die.
Medical debt on credit reports: Ruins credit, affects housing, employment, everything

The Fear Tax

Beyond the deaths and bankruptcies is the constant fear. Fear of getting sick. Fear of losing job (and insurance). Fear of the bill. Fear that a diagnosis means financial ruin. Fear of calling an ambulance. Americans live with a background terror that citizens of other wealthy nations don't experience. This is a form of violence.

Why It Persists

Political Capture

Healthcare industry lobbying: $700+ million/year (largest of any industry)
Campaign contributions: $200+ million/cycle to both parties
Lobbyists: 5+ for every member of Congress
Revolving door: FDA, HHS officials become industry executives
Result: Medicare can't negotiate drug prices (until minimal 2022 law). Public option killed. Single-payer "off the table."

Ideological Capture

"Socialism" scare: Universal healthcare labeled socialist, despite working in every other wealthy nation
"Choice" rhetoric: Americans have "choice" of unaffordable plans that don't cover care
"Innovation" argument: US profits supposedly fund global R&D (mostly false—NIH funds basic research)
"Long waits" scare: Meanwhile Americans wait weeks for appointments, ration insulin, die waiting for prior auth

Employer Trap

Employer-sponsored insurance (an accident of WWII wage controls) creates job lock. People stay in bad jobs for insurance. Entrepreneurs don't start businesses. Workers don't demand better conditions. Employers have leverage. The system is a control mechanism as much as a healthcare system.

The AIP Solution

Remove Profit From the Equation

AIP provides universal healthcare funded through Stability Accounts. Healthcare becomes infrastructure—like roads, fire departments, police. You don't profit from firefighting. You shouldn't profit from healing.

The Structure

Universal coverage: Everyone covered, birth to death, no exceptions
Funded through accounts: Healthcare costs deducted from Stability Account growth, capped to prevent catastrophic drain
Private delivery: Doctors and hospitals remain private—compete on quality, not on denying care
Administration: community-governed payment arrangements with state oversight. Administrative savings require comparable cost definitions and measurement.
Prevention focus: System paid to keep you healthy (saves money), not to treat sickness (generates money)
No medical debt: Costs covered, bankruptcy eliminated
No insurance companies: The middlemen extracting $40B+ in profit while denying care—eliminated

The Incentive Realignment

Old incentive: Profit from sickness
New incentive: System funded by healthy, productive workers paying into accounts. Healthy population = larger tax base = more funding. Prevention pays.
Providers compete on outcomes: You choose your doctor. Doctors/hospitals with better outcomes attract patients. Quality, not extraction, wins.

The Results

Universal coverage (28 million currently uninsured)
Lower total spending (admin savings alone: $500B+)
Better outcomes (prevention focus, no rationing)
No medical bankruptcy
No job lock (insurance not tied to employer)
Employers save $15K/employee
No fear tax

Discussion Questions for Validators

Is the 'profit is the problem' thesis too simplistic? What role does profit play positively?
How do we maintain innovation incentives without profit-driven pharma?
What happens to the 2.7 million insurance industry employees?
Is private delivery with public funding the right hybrid?
How does this interact with Stability Account mechanics?
What's the political path given industry capture of both parties?

Scope: This document presents a strongly critical view of American healthcare. The data on spending, outcomes, and incentives is well-documented. Validators are invited to challenge the framing and suggest where profit does serve useful functions in healthcare delivery.

Implementation and evaluation

Communities decide service priorities and payment arrangements; states oversee access and remedies. Measure waiting times, outcomes, out-of-pocket exposure and total administrative costs. The patient’s account obligation must be capped by an explicit funded rule.