Yesterday, we released the 2026 Trends Shaping the Health Economy Report, the sixth annual installment of Trilliant Health’s data-driven analysis of the U.S. health economy. The framework of the 2026 Trends Report is Garrett Hardin’s “The Tragedy of the Commons,” one of the most cited papers in the social sciences since its publication in 1968. The introduction to the 2026 Trends Report explains:
“In Politics, Aristotle diagnosed a failure of shared resources, writing that common property ‘has the least care bestowed upon it’ since people think ‘chiefly of his own, hardly at all of the common interest.’ Centuries later, Garrett Hardin named that failure the tragedy of the commons. Picture a pasture open to every herder. Each herder, acting rationally in their own interest, adds one more animal to graze until the pasture is depleted. No one intended the outcome, but everyone contributed to it. The U.S. health economy, which consumes $1 out of every $21 of global GDP, is a tragedy of the commons, every stakeholder grazing the metaphorical pasture toward collective ruin.”
This reality should be self-evident to any knowledgeable health economy stakeholder. For those who understand the fiduciary duties to which every stakeholder – for-profit, not-for-profit, nonprofit – is bound, the inevitability of healthcare’s tragedy of the commons should also be self-evident.
What is self-evident, however, is not exempt from the basic economic principles of demand, supply and yield. As the economist Herb Stein noted, “if something cannot go on forever, it will stop.”
What is apparently nonobvious to almost every health economy stakeholder is the fact that a historic reallocation of financial risk from the Federal government to stakeholders is underway. CMS’s Transforming Episode Accountability Model (TEAM) and Comprehensive Care for Joint Replacement Expanded (CJR-X) are the most obvious examples, expanding the framework of prospective payment by orders of magnitude from 1-5 day inpatient stays to 30-90 days post-discharge. Any rational observer would expect that Medicaid and commercial payers will follow suit. To anyone who fails to understand that the impact will extend to every other sector – post-acute, medical device and pharmaceutical – I can only say, “Bless your heart.”
What is also apparently nonobvious to almost every health economy stakeholder is the political impact of healthcare’s tragedy of the commons. The emergence of the Democratic Socialists of America (DSA) recalls Macbeth: a political party platform, proclaimed by overcredentialed yet undereducated college graduates, full of sound and fury, signifying nothing other than a counterintuitive blend of idealism and destruction – pass a Federal jobs guarantee, phase out fossil fuels, cancel student debt, demilitarize police departments, defund the Department of War, abolish the Electoral College, replace the President and Supreme Court, etc.1
In that sound and fury, however, is a portent for – and indictment of – health economy stakeholders in the DSA’s demand for healthcare for all:
“Guarantee universal healthcare at no cost to individuals, including complete access to reproductive and gender-affirming care. Expand healthcare access and quality by investing in new public hospitals and clinics. Make all medical education and training public and free.”2
New public hospitals? Seriously?
The Founding Fathers, many of whom were among the most prolific writers in American history, never wrote a word about anything like that, even if one of them founded America’s first hospital. If you have read many of The Federalist Papers, you know that Hamilton and Madison anticipated the shortcomings of elected officials.
From The Federalist Papers No. 10:
“The latent causes of faction are thus sown in the nature of man; and we see them everywhere brought into different degrees of activity, according to the different circumstances of civil society. A zeal for different opinions concerning religion, concerning government, and many other points, as well of speculation as of practice; an attachment to different leaders ambitiously contending for pre-eminence and power; or to persons of other descriptions whose fortunes have been interesting to the human passions, have, in turn, divided mankind into parties, inflamed them with mutual animosity, and rendered them much more disposed to vex and oppress each other than to co-operate for their common good. So strong is this propensity of mankind to fall into mutual animosities, that where no substantial occasion presents itself, the most frivolous and fanciful distinctions have been sufficient to kindle their unfriendly passions and excite their most violent conflicts…
It is in vain to say that enlightened statesmen will be able to adjust these clashing interests, and render them all subservient to the public good. Enlightened statesmen will not always be at the helm. Nor, in many cases, can such an adjustment be made at all without taking into view indirect and remote considerations, which will rarely prevail over the immediate interest which one party may find in disregarding the rights of another or the good of the whole.”3
Similarly, in his farewell address, George Washington noted this:
“It is important, likewise, that the habits of thinking in a free country should inspire caution in those entrusted with its administration, to confine themselves within their respective constitutional spheres, avoiding in the exercise of the powers of one department to encroach upon another. The spirit of encroachment tends to consolidate the powers of all the departments in one and thus to create, whatever the form of government, a real despotism. A just estimate of that love of power and proneness to abuse it which predominates in the human heart is sufficient to satisfy us of the truth of this position.”4
However, I submit that the Founding Fathers would be stunned by the lack of self-determination among American citizenship, for whom “sticks and stones may break my bones, but words can never hurt me” became “words are violence” in a generation. The Founding Fathers regularly wrote and spoke about the importance of personal and moral virtue for the good of the republic.
George Washington: “And the consideration that human happiness and moral duty are inseparably connected, will always continue to prompt me to promote the progress of the former, by inculcating the practice of the latter.”5
And: “To point out the importance of circumspection in your conduct, it may be proper to observe that a good moral character is the first essential in a man, and that the habits contracted at your age are generally indelible, and your conduct here may stamp your character through life. It is therefore highly important that you should endeavor not only to be learned but virtuous.”6
Thomas Jefferson: “Never trouble another for what you can do yourself.”7
Benjamin Franklin: “Resolve to perform what you ought. Perform without fail what you resolve.”8
John Adams: “Public Virtue cannot exist in a Nation without private, and public Virtue is the only Foundation of Republics. There must be a possitive [sic] Passion for the public good, the public Interest, Honour [sic], Power, and Glory, established in the Minds of the People, or there can be no Republican Government, nor any real Liberty. And this public Passion must be Superiour [sic] to all private Passions. Men must be ready, they must pride themselves, and be happy to sacrifice their private Pleasures, Passions, and Interests, nay their private Friendships and dearest Connections, when they Stand in Competition with the Rights of society.”9
Today, America is plagued by a “blame” culture that is especially prominent in the lack of accountability in government, the perennial Beltway passivity of “mistakes were made” instead of the accountability of a Federal official apologizing for, say, the myriad idiotic COVID-19 policy decisions – school closures longer than two weeks, quarantines, bans on social gatherings, border closures and mask mandates – that D.A. Henderson and colleagues warned against in 2006. The consequence of the absence of such accountability is stark:
At a more basic level, health economy stakeholders are strangely oblivious to the fact that people don’t “want” healthcare, even when they need it, except for the expectant mother who cannot wait to be admitted to the hospital. When your customers don’t trust you to deliver something they don’t even want, well…
Similarly, the “it wasn’t me” lack of personal accountability manifests in the American public’s profound unwellness, most of which results from poor individual decisions – diet, lack of exercise, smoking, alcohol abuse, drug abuse, etc.
For health economy stakeholders, the persistent deflection of accountability looks like this:
How did we get here? Because we forgot first principles, which is often the first step in losing the plot.
There is nothing in the original Hippocratic Oath about delivering health, although there are numerous declarations and prohibitions that postmodern society has abandoned. The closest the original Hippocratic Oath comes to health is this:
“I will follow that system of regimen which, according to my ability and judgment, I consider for the benefit of my patients, and abstain from whatever is deleterious and mischievous.”10
Neither does the modern Hippocratic Oath make the physician responsible for health. Instead, the physician merely affirms that “the health and well-being of my patient will be my first consideration.”11
Notably, in neither version of the Hippocratic Oath does a physician pledge to heal or cure a patient, only to “teach” and “practice” the art of medicine. Hospitals, of course, are merely buildings to enable physicians to practice medicine.
Cue Pogo: “We have met the enemy and he is us.”
Every health economy stakeholder – especially the hospital sector – has failed to ask the obvious question: In what world is someone else responsible for your health?
In the world of reality, I am responsible for my health, and you are responsible for yours, regardless of the ticket we received in the genetic lottery. Health is, in almost every case, downstream of an individual’s personal health behaviors.
That is why, contrary to the sarcasm of the pundits, America has a sick care system, not a healthcare system. A sick care system is inevitable in a nation of people who avoid personal accountability, and its inevitability is matched by the futility of what health economy stakeholders market to the American public.
No health economy stakeholder can “cure” anyone. While America spends an extraordinary amount on treatments with no survival benefit, death remains undefeated, and even Keith Richards believes that “time waits for no one.”
At its best, any health system, whether private or public or nationalized, can only hope to treat illness in a manner that improves the quality of or prolongs a life, not “save” it. Faith-based stakeholders focused on being “the hands and feet of Christ” are literally doing God’s work, but even God doesn’t promise healing in this world.
Even so, more than 1,100 U.S. hospitals expressly cite promoting community or population health and well-being on their websites. Similarly, Elevance’s “purpose is bold: to improve the health of humanity,” and “UnitedHealth Group is a healthcare and well-being company with a mission to help people live healthier lives and help make the health system work better for everyone,” and Sanofi’s purpose is to “chase the miracles of science to improve people’s lives.” 12,13,14 All of that sounds wonderful, but the most effective way for those stakeholders to execute their purpose would be to sponsor concrete barriers at the entrance of McDonald‘s, Taco Bell and Chick-fil-A.
Why health economy stakeholders have painted themselves into a corner by promising the impossible is a great mystery, and a large part of America’s healthcare crisis. The American public has been sold for years on the “miracles of modern medicine” without being told the cost of the so-called miracles, like Rasonque™, a drug that extends the life of pancreatic cancer patients by an average of six months at a list price of $39,800 per month. Disappointment, frustration and anger are the typical emotional responses to broken promises, and the industrial medicine complex has made too many promises that it cannot keep.
The combination of a population that doesn’t trust the system but refuses to accept personal responsibility for their actions and inactions is a dangerous mix, which is why America is on the verge of a healthcare election.
“If something cannot go on forever, it will stop.” How long until the status quo comes to an end?
Every American is a health economy stakeholder, and it is hard to think of a more bipartisan issue for which there should be unanimous support than policies promoting and incentivizing health and healthy behaviors. The first principles of reducing healthcare costs require using less of it, which first requires Americans to be healthier – an ounce of prevention is worth a pound of cure. Of course, a healthier America would need fewer hospitals and physicians…and drugs.
In a world of declining demand, economic principles would suggest that the industry stakeholders who delivered the most value for money would be the winners, or at least survivors.
First principles would lead each stakeholder to make meaningful change to deliver more value for money. Hospitals would operate “focused factories” offering a limited number of high-quality service lines instead of numerous “centers of excellence” that aren’t. Hospital medical staffs would have the courage to revoke privileges for the physicians that everybody knows render unsafe or unnecessary care. Physicians would refuse to order low-value screening tests. Medicare Advantage plans and providers would forego upcoding schemes to increase RAF scores and, in turn, reimbursement. Pharmaceutical companies would stop seeking patent extensions for “innovations” that are patently obvious. Medical device companies would make pricing transparent so that physicians could make value-based decisions about which device to implant in which patients. Employers would refuse to utilize any insurer paying commissions to third-party brokers.
Regrettably, asking the American public to make personal sacrifices, if only for their personal benefit, is no longer in vogue in the White House or Congress, and industry stakeholders have shown no willingness to constrain themselves. As a result, Federal and state governments have already begun to implement price caps to fence the healthcare commons, as the Congressional Budget Office clearly signaled in September 2022:
To paraphrase Sir Winston Churchill, the U.S. healthcare system is the worst system ever designed, except for all the others that have been tried, which is the reason that every socialized/nationalized system is a two-tier system, where those who can gladly do pay out of pocket for the kind of coverage that every American wants and expects. The irony of the “healthcare for all” aficionados is that their focus on equity in the healthcare system will permanently enshrine a two-tier system like the U.K.’s National Health Service, a reminder of many of H.L. Mencken’s observations about democracy, especially this one: “Democracy is the theory that the common people know what they want, and deserve to get it good and hard.”
At this late hour, I fear that “healthcare for all” is the most likely outcome of the health economy’s tragedy of the commons. I also have no doubt that “healthcare for all” will keep all the things that Americans hate about the current system and eliminate most of the few things they like. The health economy stakeholders who prosper in a world of “healthcare for all” will be those most skilled at regulatory capture, an attribute that historically has been antithetical to delivering value for money and where "Big Pharma" reigns supreme.
Every health economy stakeholder should hope, as I do, that I am desperately wrong about all of this, but like Nick Saban, I am probably right.