We’re Paying for Healthcare.
But Are We Investing in Health?

By Russell Greenfield, MD, Founding Executive Director, The Institute for the Advancement of Whole Health at Southern California University of Health Sciences

Key Take-Aways:

• Paying for healthcare services is not the same as investing in health. Our current financing system is largely centered on paying to treat illness, rather than helping people achieve and maintain good health.
• Existing payment reforms have made progress but have not addressed the underlying problem. Financial incentives still discourage long-term investments in prevention and well-being because the benefits may be realized years later or by organizations other than those making the investment.
• Creating a more effective and financially sustainable healthcare system will require fundamentally new approaches to financing. That means rethinking what we invest in, who pays, how financial risks and benefits are shared, and how we measure the value of those investments.

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As healthcare costs continue to climb, the debate over affordability has become increasingly urgent. According to the Centers for Medicare & Medicaid Services, U.S. healthcare spending reached $5.3 trillion in 2024, representing 18% of the nation’s gross domestic product. And the financial pressure continues to build. A 2026 survey by KFF found that the average annual premium for employer-sponsored family health insurance had reached $28,303, an increase of 55% over the past decade. Employers are struggling to manage rising costs, families are absorbing an increasing share of the burden, and policymakers are confronting difficult questions about how to sustain the system.

But what if we’re asking the wrong questions altogether? Rather than focusing exclusively on how to reduce healthcare spending, shouldn’t we also be asking whether our healthcare financing system is designed to achieve outcomes we actually want? The current system is largely structured around paying for medical services, not investing in better health. And while various reforms have yielded modest progress, they haven’t fundamentally changed that reality.

Consider a health insurer today that wants to invest in helping members prevent or better manage chronic conditions. The benefits might include improved quality of life and lower healthcare expenditures over time, but those savings could take years to materialize, and members might have transitioned to other insurance plans in the meantime. Or consider a healthcare provider treating a patient whose diabetes is difficult to manage because they lack reliable access to nutritious food. Addressing that need could improve the patient’s health and potentially reduce future medical complications, yet current reimbursement models may not cover the services required.

These scenarios reveal two fundamental challenges of healthcare financing. First, the costs of improving health are often immediate and concentrated, while the financial benefits may be delayed, dispersed, or realized by organizations other than those making the investment. Second, many factors that are known to influence health and well-being—including nutrition, housing, physical activity, behavioral health, social connection, and access to safe and supportive environments—fall outside the services our healthcare system traditionally pays for. Together, these challenges create financial disincentives to invest in approaches that could improve long-term health, even when their clinical value is compelling.

Over the years, numerous efforts have sought to better align healthcare financing with improved health outcomes. Value-based payment arrangements attempt to connect reimbursement more closely to outcomes rather than the volume of services delivered. Shared-savings models create opportunities for organizations to benefit financially when they improve care while reducing avoidable expenditures. While these reforms have contributed to important progress, they remain largely focused on improving how we pay for healthcare services rather than fundamentally rethinking how we invest in health and well-being.

Perhaps, then, the solution begins with reconsidering what healthcare is ultimately meant to accomplish. If our goal is not simply to treat illness but to help people achieve and maintain good health, our financing models should reflect that broader purpose. Success should be measured not only by how affordably we deliver healthcare services, but by the extent to which people are able to achieve and maintain good health, lead productive lives, and pursue what matters most to them. That requires accounting for the interconnected roles of medical care, prevention, behavioral health, and the broader social and economic conditions that influence well-being, rather than treating them as separate financial responsibilities. Achieving this will require new approaches that allow healthcare organizations, insurers, employers, and community institutions to collaborate and to share the costs, risks, and benefits of investing in health.

At The Institute for the Advancement of Whole Health, we are convening leaders from healthcare, insurance, business, policy, and research to challenge longstanding assumptions and develop practical solutions. Our aim is to move beyond discussing what needs to change toward identifying promising ideas that can be tested, refined, and ultimately put into practice.

We have spent decades debating how to pay for healthcare. It’s time to give equal attention to how we invest in health.

Russell Greenfield, MD, is the Founding Executive Director of The Institute for the Advancement of Whole Health at Southern California University of Health Sciences. The Institute brings together leaders across healthcare, education, research, and policy to advance the transformation toward a Whole Health system that prioritizes prevention, well-being, and person-centered care.