There’s a line in the Tao Te Ching, attributed to Lao Tzu, that causes me to pause every time I encounter it: “Water is the softest thing on earth, yet it can penetrate mountains and earth.”
I often think about this passage, specifically in relation to the U.S. healthcare industry. Not because it’s a mountain, though at times it feels like one, but because the wrong kind of force applied to a complex, living system produces rigidity, not flow.
I was a healthcare administrator from the mid 80’s through the early 90’s (and then from 2006-09) before later walking away from corporate life to become an independent consultant, speaker, and writer. During this period, I worked at four very different kinds of healthcare organizations: a university teaching hospital, a small rural hospital, an urban inner-city hospital, and a private community health center.
While these four experiences failed to provide me with substantive answers as to what ails American healthcare, they did give me something more valuable: an inquiring mind.
In this spirit, the late Michael E. Porter and his co-author Elizabeth Teisberg, in the opening pages of their book Redefining Health Care, ask: What if the problem is not that there is too little government involvement, but that competition is happening at the wrong level?
Here’s what I gleaned from this:
“The problem is not that markets have failed in healthcare. Instead, it’s an issue of never truly allowing the right kind of market to operate.”
What would it look like to make the case for a market-based healthcare system? Not the caricature that opponents imagine, where profits run free and the poor are left to suffer. But a genuine value-based system, rooted in the three pillars I have carried with me since my first day in a healthcare administrative wing: affordability, quality of care, and access.
I want to make this case through the lens of Eastern philosophical wisdom, and through the hard-won observations of a career spent inside institutions ranging from world-class academic medicine to a hospital in a diverse middle-class neighborhood in Chicago. And I want to make it with the optimism of someone who has seen what has and hasn’t worked, and believes that what works can be the rule rather than the exception.
What Porter Taught and the Tao Confirms
Michael Porter wasn’t a philosopher in the Eastern philosophical tradition. He was a Harvard Business School professor whose framework for competitive strategy has reshaped industries across the global economy. But when I read Redefining Health Care, I kept encountering ideas that resonated with frameworks I had been carrying from the Tao Te Ching and the Confucian tradition for years. This, in my view, is not a coincidence but evidence that certain truths about complex systems are universal.
Porter's central argument is this: American healthcare is trapped in a zero-sum competition—one in which health plans compete for premium revenue, hospitals compete for patients and procedures, and physicians compete for referrals.
In each case, the competition is happening at the wrong level, as it’s about accumulating bargaining power and shifting costs, not competition to deliver superior outcomes. The result is a healthcare industry that spends enormous resources on administration, negotiation, and cost-shifting, while actual patient outcomes, particularly for complex or chronic conditions, remain far below what the system's inputs should produce.
The prescription Porter and his colleague Teisberg offered is a shift to what he calls value-based competition: competition on results, at the level of specific medical conditions, over the full cycle of care. Instead of hospitals competing on the basis of which can negotiate the highest reimbursement rates, the duo argue that competing should be on the basis of which can deliver the best care outcomes for patients.
It’s here, they argue, where transparency-of-outcomes data, organized by condition and provider, becomes the engine of improvement. At that point, patients armed with accurate information can make choices that reward excellence and penalize mediocrity.
The Three Pillars: Affordability, Quality, Access
In my years as an administrator, I reduced the healthcare problem to three questions that I believe any serious reform proposal must answer:
Can people afford the care they need?
Is the care they receive of the highest quality?
Can they actually get to the care when they need it?
In other words, affordability, quality of care, and access do not represent separate problems with separate solutions. They are facets of a single crystalline challenge, for a reform that addresses one while sacrificing the others is not reform at all.
The book’s framework speaks directly to all three.
On affordability: When providers compete on outcomes rather than volume, the authors noted, waste is driven out of the system. The procedural inflation that has made American healthcare so expensive—ordering tests and procedures that generate revenue rather than health—is directly addressed by a payment model that rewards outcomes rather than activity.
On quality: Transparent outcomes data, organized by condition and provider, creates accountability that administrative regulation has never been able to produce. When patients and referring physicians can see which centers of excellence consistently outperform their peers in treating specific conditions, quality improvement becomes a competitive imperative rather than a compliance exercise.
On access: This is where the libertarian and humanist dimensions of the argument converge. A market organized around value creation for patients, rather than bargaining power for institutions, naturally generates innovation in care delivery. Telemedicine, community health workers, retail clinics, nurse practitioners operating at the full scope of their training—these are not threats to quality. They are expressions of the creative energy that a well-functioning market releases when it is pointed in the right direction. Access expands not through mandate but through innovation.
The Single-Payer Impulse and Its Limits
I want to address the single-payer argument with the respect it deserves, because the people who make it are, in most cases, motivated by genuine compassion for those currently underserved by the existing system.
They see the uninsured, the underinsured, the person who delays a cancer screening because the copay is too high, and the time off work is impossible. They see the administrative labyrinth that consumes roughly thirty cents of every healthcare dollar in America. And they conclude that the solution is to simplify: one payer, universal coverage, remove the insurance industry from the equation.
I understand this logic. In a purely administrative sense, single-payer systems do reduce certain kinds of overhead. The Canadian system, frequently invoked as a model, does provide universal coverage at lower administrative cost than the American system. These are real achievements that deserve acknowledgment.
But the single-payer model has its own failures, and they are not trivial. The compression of price signals that single-payer systems produce, setting uniform reimbursement rates across the system, reduces the incentive for innovation. Wait times in single-payer systems are not a media invention. They are the predictable result of suppressing the price mechanism that, in a well-functioning market, allocates scarce resources toward their highest-value uses.
The physician shortage that single-payer advocates often cite as evidence of market failure is, in many cases, evidence of regulatory capture and licensing barriers that have nothing to do with market principles and everything to do with the protection of incumbents.
More fundamentally, the single-payer model treats the healthcare problem as primarily one of financing. Porter and Teisberg argue persuasively that it is primarily a problem of organization and incentives. Moving to a single payer while leaving the underlying incentive structure intact, still rewarding volume over value, still organizing care around discrete transactions rather than patient outcomes, would produce a system that is administratively simpler and substantively unchanged in what matters most. Universal access to a system that is not organized to deliver value is not the victory its advocates imagine.
What Peaceful Self-Organization Looks Like in Practice
This is where I want to move from critique to imagination. The argument for a value-based, market-oriented healthcare system is not, at its core, a negative argument. It is not primarily a case against single payer or against government involvement. It is a case for something. And that something is already emerging, in fragments and experiments and quiet revolutions, across the American healthcare landscape. Let me share with you some of those stories.
Direct Primary Care: The Relationship Restored
In Wichita, Kansas, a physician named Ryan Neuhofel opened a direct primary care practice in 2011. No insurance billing. No coding and documentation overhead designed for the insurance system rather than for the patient. A monthly membership fee ranging from twenty to sixty dollars, depending on age, covering unlimited office visits, basic labs, and basic procedures. His panel of patients is larger than a typical insurance-based primary care physician. His overhead is dramatically lower. His patients have his cell phone number and can reach him by text. Wait times are measured in hours, not weeks.
This is not a wealthy-patients-only boutique model. Neuhofel's practice is in a working-class neighborhood. The membership fee is calibrated to be affordable for families without employer-sponsored insurance. It is a market-based solution to the access and affordability problem that the critics of market-based medicine insist the market cannot solve. And it is not an isolated experiment. There are now thousands of direct primary care practices (including that of my good friend Dr. Lindsay Cassidy here in Colorado) operating across the country, and the model is growing.
What makes direct primary care work is exactly what Porter and Teisberg prescribe, which is an alignment between the provider's incentives and the patient's outcomes over time. A direct primary care physician is paid to keep patients healthy, not to see as many patients as possible or to order as many tests as possible. The incentive structure produces the behavior that the incentive structure for fee-for-service medicine has never been able to produce: genuine preventive engagement, sustained relationships, and care organized around the patient's full health rather than discrete billable encounters.
Surgery Center of Oklahoma: Radical Transparency
In Oklahoma City, the Surgery Center of Oklahoma posts its prices on the internet. Not estimates, not ranges, not subject-to-insurance-adjustment figures. Actual prices, for actual procedures, available to anyone with a browser. An ACL repair costs a specified amount. A hip replacement costs a specified amount. These prices are dramatically lower than what the same procedures cost at traditional hospitals with their opaque chargemaster rates and insurance-negotiation overhead.
The Surgery Center of Oklahoma does not participate with insurance companies. It does not have a billing department of forty people navigating prior authorizations and denial appeals. It has surgeons and nurses and operating rooms. Its outcomes are excellent.
It attracts patients from across the country and from other countries, people who have looked at the transparent price, compared it to their insurance deductible plus out-of-pocket maximum, and concluded that self-pay at a transparent price is a better deal than using their insurance. Even if they have to travel for it.
This is, in Porter and Teisberg’s terms, competition happening at the right level. The Surgery Center of Oklahoma competes on the basis of price and outcomes, made transparent and comparable. It creates genuine value for patients. It demonstrates that the administrative complexity and cost opacity that characterize American hospital pricing are not necessary features of high-quality surgical care. They are legacy artifacts of a system built around insurance reimbursement rather than patient value.
Health-Sharing Communities: Mutual Aid at Scale
Across the country, health-sharing ministries and secular health-sharing organizations have grown dramatically as an alternative to traditional insurance. These are not insurance products in the legal sense. They are communities of members who voluntarily share each other's medical costs, organized around a set of shared values and commitments. The largest have hundreds of thousands of members. They process billions of dollars in medical bills annually.
What is interesting about health-sharing communities is not primarily their cost structure, though they are often significantly cheaper than comparable insurance for healthy individuals. It’s the relational architecture they embody. Members are invested in each other's health outcomes in a way that insurance policyholders are not. The mutual accountability that characterizes these communities creates a social context for health decision-making that the individualistic insurance model never generates.
This is, in the deepest sense, the Eastern philosophical tradition's insight about the interdependence of individual and community health made concrete in an institutional form.
The FQHC Model, Freed
And then there is the vision I carry from my time at Communicare Health Center in Davis, California, translated into a world where market incentives are aligned with patient value. Imagine a network of community health organizations, operating on direct-pay and sliding-scale models, embedded in the neighborhoods they serve, practicing integrated care that addresses the social determinants of health alongside the clinical ones.
Not charities requiring perpetual fundraising, or bureaucracies dependent on Medicaid reimbursement rates set by political negotiation,but sustainable businesses whose business model is built around keeping people healthy. Because that is what their patients pay them to do.
This is not a utopian fantasy. It is a natural extension of models already working, at a smaller scale, in communities across the country. The tools for delivering care have never been more powerful or more accessible. Telehealth platforms, remote monitoring, and AI-assisted diagnostics can expand access and reduce the cost of high-quality primary care when used in a system organized around patient value. The real barrier is not technology. It is regulation, and a failure of imagination.
The Eastern Framework: Wu Wei and the Way of the Healing Market
I want to return, as I always do, to the philosophical tradition that has shaped how I think about systems and change. The Taoist concept of wu wei is often translated as non-action, but this is misleading. It does not mean passivity or indifference. It means acting in alignment with the natural tendencies of a system rather than against them. The master craftsman does not fight the grain of the wood. The skilled physician does not suppress symptoms without understanding the condition that produces them. The wise reformer does not impose a structure on a complex system but creates the conditions under which the system can organize itself toward health.
A value-based healthcare market, in this sense, reflects a wu wei approach to reform. It does not attempt to force better outcomes through top-down mandates. Instead, it creates the right conditions, clear data on outcomes, incentives aligned with patient value, and the freedom for new care models to emerge. Within that environment, better outcomes arise naturally as providers act in their own best interest. The river does not push through the mountain. It follows the path the mountain already makes possible.
The Confucian tradition adds another dimension. Confucius taught that good governance is not primarily a matter of law and enforcement. It is a matter of cultivating virtue in individuals and institutions, creating social structures that reward right conduct and make it easier to do good than to do harm. A healthcare system organized around value creation for patients is, in Confucian terms, a system that cultivates virtue in providers. It rewards not only the physician who invests in the patient relationship but the hospital that achieves superior outcomes over the full cycle of care. Ultimately, it creates the institutional conditions under which the individual human beings inside the system can be their best selves.
The Stoic tradition, which I hold alongside the Eastern frameworks, contributes a crucial corrective to this optimism. Marcus Aurelius wrote that the impediment to action advances action. The obstacles we face in healthcare reform, the entrenched interests, the regulatory capture, the failures of imagination on all sides, are not reasons for despair. They are the material from which progress is made. The Stoic reformer does not require perfect conditions to begin. She begins where she is, with what she has, and trusts that excellence in execution is its own argument.
Overcoming Failures of Imagination
The strongest argument against a market-based healthcare system is not an economic argument but an imaginative one. Most people, when they hear “market-based healthcare,” picture the existing American system with its predatory billing practices, its insurance denials, its emergency room visits for conditions that should have been caught in primary care. They imagine that what we have is what markets produce, and they want something different.
This is false. What we have is not what markets produce but what a deeply distorted hybrid produces: a system with private actors operating under a regulatory and reimbursement architecture designed by and for incumbent interests, where the price signal has been almost entirely suppressed, and where the patient is almost never the customer in any meaningful sense. Competition happens at the level of who can negotiate the highest rates rather than who can deliver the best care. Therefore, I believe that this system is not a market but a cartel with a market's vocabulary.
The invitation I am extending is to imagine something genuinely different. To see the direct primary care physician as the model, not the exception. To envision the transparent surgery center as the template, not the anomaly. To view the community health center's integrated, relationship-based, outcomes-oriented care as the aspiration that a well-structured market can actually deliver. The failure of imagination is the assumption that these things cannot scale. The evidence, where markets have been allowed to function, suggests otherwise.
I spent a decade inside healthcare delivery organizations that were structured in ways that made it hard for good people to do good medicine. The university hospital was organized around prestige and research funding. The urban center-city hospital was organized around managing high acuity patients. The rural hospital was perpetually set up around survival in an area that was an island in and of itself. Only the aforementioned community health center, with its mission-driven structure and its patient-centered design, produced something close to what I believe healthcare can and should be.
What I am arguing is that a well-designed value-based market can produce FQHC-quality outcomes at scale, because it aligns the incentives of providers with the values of the institution that worked best.
The Medicine the System Cannot Prescribe for Itself
I left healthcare administration for good in 2009 because I had seen enough to know that the institutions I worked within were not, in most cases, organized to do what medicine is actually for. They were organized to sustain themselves, to navigate the regulatory and reimbursement environment, to manage risk, and to satisfy the requirements of accreditation bodies and insurance contracts. The patients were somewhere in that architecture, important and cared for by the individuals inside the system, but patient care was rarely the organizing principle of the system itself.
I have spent the years since thinking about what it would mean to build a healthcare system that actually puts the patient at the center. Not rhetorically, not as a mission statement, but structurally, in the way the incentives are designed, the information flows, and the competitive dynamics work.
It’s here where Porter and Teisberg gave me a rigorous framework for what I had intuited from experience. The Tao Te Ching gave me a way of understanding why complex systems require alignment rather than force. The Stoics gave me the temperament to believe that the work of reform is worth doing even when the obstacles are large.
The single-payer advocates are not wrong that the existing system is broken. They are wrong about the diagnosis. The existing system is broken not because it has too much market, but because it has the wrong kind of market, organized around the wrong incentives, pointing in the wrong direction. The medicine it needs is not the elimination of competition but the redirection of competition toward the one outcome that matters: the health of the patients it exists to serve.
The community health center I worked in twenty years ago was doing this, imperfectly and under resource constraints that no healthcare system should face. The direct primary care practices, transparent surgery centers, and health-sharing communities doing it today are doing it better and at a greater scale.
The future I believe is possible is one in which these are not the exceptions that prove the rule, but the rule itself: a healthcare system organized around the relentless creation of value for patients, accountable to transparent outcomes data, and open to the creative energy of providers and innovators who can imagine new ways to extend high-quality care to people who need it.
That is the system worth building. Not because it is politically convenient or administratively simple, but because it is organized around the truth that medicine has always known and that the institutions of medicine have always struggled to embody: that the purpose of the healer is the health of the person in front of her, and that every system, every incentive, every competitive dynamic should be in service of that single irreducible fact.
The river does not force its way. It finds the path the mountain makes available. And over time, it moves the mountain.