By Dante Panella, Co-founder of PriceMDs

Everyone likes to talk about how the United States healthcare is broken. I hear it constantly, from employers, brokers, and executives who feel trapped in a system that gets more expensive every year without delivering anything better in return.

But I see it differently.

The word “broken” suggests malfunction. It suggests that a system failed to operate as intended when, in reality, we have something entirely different. U.S. healthcare is operating exactly as it was built to, rewarding higher prices, protecting entrenched interests, and steadily transferring cost downstream to employers and patients.

Once you understand the larger picture, the way the system operates makes more sense.

The $20 Beer That Explains Everything

There is a simple analogy I often come back to when discussing how U.S. healthcare operates.

If you buy a Budweiser at a football stadium, it costs about $20.

Walk a block outside the gates, and you can buy that exact beer at a convenience store for a few dollars. Same can. Same beer. Same supply chain.

No one thinks the stadium beer is better. No one assumes it costs more to produce. The price exists because you are captive. You have limited choice, no leverage, and no alternative in that moment.

That dynamic mirrors how healthcare pricing works in the U.S. Prices aren’t tied to quality, complexity, or effectiveness. Instead, they are shaped by negotiated power, access restrictions, and who controls the environment where the transaction happens.

And don’t be mistaken, it was intentionally built this way.

The Free Market We Like to Talk About

Healthcare is often described as a free market. In reality, it behaves nothing like one.

In functioning free market systems, price competition pushes costs down over time. Buyers compare options, and sellers differentiate on value. Poor pricing is punished.

Healthcare pricing is largely pre-negotiated behind closed doors. Patients rarely see the real numbers until after care is delivered. The choices presented are typically confined to in-network or out-of-network, with financial penalties discouraging deviation.

When pricing is fixed in advance and access is constrained, the market stops behaving like a market and becomes a controlled environment where inflation is not only tolerated but expected and leveraged.

How Drug Pricing Became a Closed Loop

Nowhere is this more evident than in pharmacy.

In the U.S., a small number of pharmacy benefit managers control the vast majority of drug pricing. They determine which drugs are preferred, how they are positioned, and how costs flow through the system.

Originally, this structure solved a real problem. Drug manufacturers needed scale and distribution, and PBMs were able to provide it. Over time, however, the incentives shifted so revenue became tied to price inflation rather than price reduction.

When intermediaries earn more as prices rise, upward pressure is no longer a side effect. It becomes the intention.

That is why specialty drug costs continue to climb year after year, largely detached from production costs or scientific advancement.

Why Transparency Alone Falls Short

Transparency has become the rallying cry of healthcare reform, and it is directionally helpful. But it is not a cure.

Showing someone an inflated price doesn’t change the justification behind it. If everyone still benefits financially from higher numbers, publishing those numbers simply documents the problem.

Meaningful change requires altering who benefits from high prices versus low prices. Until that shift occurs, transparency becomes an exercise in disclosure rather than a driver of structural change.

The Part No One Likes to Say Out Loud

Here is the uncomfortable reality.

Most powerful players in healthcare have little incentive to fundamentally change the system. Not because of malicious intent, but because the current model delivers consistency, scale, and profit.

Healthcare represents a massive share of the U.S. economy, and systems of that size do not, and actually cannot, evolve gently. They resist disruption, absorb criticism, and protect themselves through regulation, complexity, and lobbying.

When a new approach threatens that equilibrium, it is rarely evaluated on merit alone. It is challenged because it disrupts the economics that many have learned to depend on.

Why I Still Believe Change Is Possible

Despite all of this, I am not pessimistic.

Over the last decade, I have watched employers and brokers become far more sophisticated when it comes to analyzing and enhancing their plans. They are no longer accepting annual increases as unavoidable and are now consistently questioning assumptions that once went unchallenged.

The real opportunity is not to patch the existing system. It is to rebuild incentives so that lower costs are rewarded rather than punished, and efficiency is valued rather than resisted.

If that ever happens fully, companies like PriceMDs would no longer need to exist. And believe it or not, I would consider that a step forward for the whole system.

Until then, the most important step is honesty. We have to stop pretending this system failed by accident because it didn’t.

It is doing exactly what it was designed to do.