If modern healthcare is radically more expensive and complex than it was decades ago, why is it still tied to a labor system that barely exists anymore?
This contradiction sits at the heart of American economic anxiety. It explains why illness feels financially catastrophic. Why job loss is terrifying even for healthy people. Why people stay trapped in jobs they hate, not for pay, but for insurance.
Healthcare outgrew the system designed to support it.
Healthcare costs did not rise gradually. They exploded.
The scale of change matters, because it exposes how outdated the system truly is.
Total U.S. healthcare spending has more than tripled since 2000, rising from roughly $1.4 trillion to nearly $4.9 trillion by 2023. Healthcare now consumes about 17.6 percent of U.S. GDP, a share far higher than in other advanced economies.
On a per person basis, the shift is even more striking. In 1970, healthcare spending averaged roughly $353 per person. By 2023, that figure exceeded $14,500 per person, adjusted for inflation.
Medical prices also rose faster than overall inflation. Since 2000, medical care costs have increased by more than 120 percent, compared to roughly 86 percent for consumer prices overall. In 2023 alone, healthcare spending grew about 7.5 percent, with hospital costs rising by over 10 percent.
Healthcare is no longer a background expense. It is a dominant financial risk.
Mid century medicine was cheaper by design
Healthcare in the mid 20th century was fundamentally different.
Treatments were limited. Chronic conditions often went unmanaged. Lifespans were shorter. Administrative complexity was minimal. Insurance existed to cover rare, acute events, not decades of ongoing care.
The original system was not efficient by modern standards. It was simply built for a cheaper form of medicine.
That context matters, because today’s system still rests on assumptions from that era.
Employer insurance was built for a labor market that vanished
Employer provided healthcare expanded during and after World War II. It assumed a specific household and work structure.
- One primary breadwinner.
- One long term employer.
- Decades of continuous employment.
Portability was irrelevant because people didn’t move between jobs frequently. Coverage gaps were rare because employment was stable.
Healthcare access was anchored to predictability.
Work became unstable. Coverage did not adapt.
Modern employment looks nothing like the model healthcare was designed around.
Job hopping is common. Layoffs are routine. Contract and gig work expanded. Even traditional employment became less secure.
But… insurance still assumes continuity.
Lose a job, and coverage often ends immediately. COBRA exists, but is priced out of reach for many. Marketplace plans come with higher deductibles and narrower networks. Public programs rely on income thresholds that shift with fluctuating hours.
The system treats instability as an exception when instability is now the baseline.
Insurance stopped guaranteeing financial protection
Premiums rose. Deductibles rose. Copays rose. Out of pocket maximums rose.
Even insured households face serious financial exposure. Medical debt remains one of the leading causes of bankruptcy in the United States. People delay or avoid care not because they are irresponsible, but because they cannot predict the cost.
Insurance increasingly functions as partial access with continued risk.
Healthcare became a participation cost
Healthcare is not optional.
- You need it to work full time.
- You need it to raise children.
- You need it to manage chronic conditions.
- You need it to age without fear.
Like housing, healthcare determines whether someone can participate in modern life. It is infrastructure, not a luxury.
Yet… it is priced and administered as if people can simply opt out.
Nostalgia blocks policy evolution
Employer provided insurance is still framed as a benefit, even as it increasingly traps workers.
The mid century system is treated as normal. Alternatives are treated as radical. Universal or decoupled healthcare models are dismissed on sentiment, not practicality.
Attachment to the past limits policy imagination.
Complexity became its own cost
Multiple insurers. Fragmented billing. Employer plan administration. Opaque pricing.
This complexity adds massive overhead without improving outcomes. Employers manage healthcare instead of focusing on their actual work. Patients navigate a maze without clear prices or guarantees.
The system is expensive partly because it is unnecessarily complicated.
Healthcare policy did not fail because medicine advanced. That is a lie.
It failed because it remained tied to a labor model that no longer exists, a household structure that faded decades ago, and expectations frozen in a different era.
When costs evolve and policy does not, suffering is not accidental.
It is built in.
