American healthcare has spent decades asking how much healthcare costs. We have devoted far less attention to an equally important question: What clinical value are we buying with those dollars?
In a recent Washington Examiner commentary, I asked a straightforward economic question: If patients and employers are paying more for healthcare, physicians are receiving less inflation-adjusted reimbursement, administrative burdens are increasing, and major healthcare corporations have grown dramatically, who captured the value?
The numbers underlying that question are striking. According to KFF, average employer-sponsored family health insurance premiums rose from $13,770 in 2010 to $26,993 in 2025 — nearly doubling. Yet, adjusted for inflation in practice costs, Medicare physician payment declined 33% from 2001 through 2026, according to the AMA. Furthermore, a 2024 AMA survey reported physicians completing an average of 43 prior authorizations each week, consuming roughly 12 hours of physician and staff time.
Meanwhile, some of the largest corporations operating within healthcare have experienced extraordinary growth. UnitedHealth Group, for example, reported $94.2 billion in revenue in 2010 and $447.6 billion in 2025 — nearly a fivefold increase.
None of these figures proves wrongdoing. Corporate growth is not inherently evidence of healthcare failure. Successful organizations can create value, employ people, invest in technology, and improve care. But the divergence raises another question — one particularly relevant to healthcare leaders:
Are we measuring the right thing?
Traditional health economics appropriately examines expenditures, utilization, insurance design, resource allocation, and cost-effectiveness. But healthcare is not merely an economic marketplace. Decisions made far upstream from the examination room — coverage policies, reimbursement schedules, prior-authorization requirements, consolidation strategies, regulatory decisions and capital allocation — eventually change what happens between a clinician and a patient.
That suggests the need for another lens: clinical macro-economics.
Clinical macro-economics is the study of how large-scale financial, regulatory, reimbursement, and organizational structures influence clinical decision-making, patient access, physician capacity, medical innovation and ultimately patient outcomes. Its central premise is simple:
The economic architecture of healthcare is itself a clinical intervention.
Consider what happens when reimbursement changes. A payment decision can determine whether a physician continues providing a service or whether a hospital can sustain it. A prior-authorization requirement can delay treatment, while a coverage determination can decide whether an innovation ever reaches patients. Consolidation can alter referral patterns, competition, physician autonomy and sites of service, while administrative requirements can consume clinical capacity that otherwise would have been available for patient care.
These consequences may be beneficial, harmful or neutral. The point is that they are clinical consequences of economic decisions, and we should measure them accordingly.
Prior authorization illustrates the problem. Twelve hours of physician and staff time each week is not merely an administrative expense. It represents clinical capacity redirected from another purpose. The relevant economic question therefore cannot simply be: How much money did prior authorization save? We should also ask what it cost in professional time, whether it delayed medically necessary treatment, whether it improved outcomes, what administrative infrastructure was required to operate it, and ultimately whether the clinical value produced exceeded the clinical value displaced.
The same accounting should extend throughout healthcare. When a dollar is spent directly treating a patient, its purpose is relatively apparent. When a dollar is spent on administration, utilization management, corporate infrastructure, analytics, regulatory compliance, or another intermediary function, that expenditure may also create genuine value. But the system should be able to demonstrate it.
This suggests a first principle of clinical macro-economics:
Every healthcare dollar diverted from direct patient care should demonstrate measurable clinical value equal to or greater than the care it displaces.
That does not mean every healthcare dollar belongs at the bedside. Modern medicine could not function without hospitals, insurers, administrators, technology, pharmaceuticals, medical devices, regulators, data systems and countless other participants. It means that the ultimate denominator should remain the patient.
The principle is equally important for medical innovation. America can develop a better operation, device, diagnostic test, pharmaceutical, or treatment, but discovery alone produces no clinical benefit. Innovation must traverse regulatory approval, coverage, coding, reimbursement, adoption and delivery before it reaches a patient. Economic friction at any of those transitions can determine whether an effective innovation becomes standard care — or effectively disappears.
Healthcare executives therefore need more than financial dashboards. We need a clinical-economic accounting that follows dollars and outcomes simultaneously. For every major healthcare expenditure, we should be able to ask four questions: Where did the money go? What clinical value did it create? What clinical capacity did it consume? And did patients ultimately benefit?
Those questions should apply equally to insurers, hospitals and health systems, physicians, pharmacy benefit managers, pharmaceutical and device manufacturers, government agencies, and healthcare technology companies. The objective is not to identify a villain. It is to identify incentives — and measure their clinical consequences.
America already measures healthcare spending with extraordinary precision. The next challenge is determining whether the financial architecture surrounding that spending produces the clinical value it exists to support.
Healthcare does not ultimately exist to finance healthcare.
It exists to care for patients.
Dr. Lorio is past president of the International Society for the Advancement of Spine Surgery, former chair of its Coding & Reimbursement Task Force, and a member of the Advisory Board of the American Academy of Interventional Spine and Neuromodulation.
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