Let's Get Honest: Healthcare Has Trust Issues

It can feel overwhelming, what's happening in healthcare right now.

LEAD Model applications are due in three weeks. TEAM bundled payments just launched. The CMS-HCC v28 risk-adjustment model finished its three-year phase-in. Part D out-of-pocket caps ticked up again. Vaccine schedules are shifting. Conferences, white papers, and reimbursement debates fill the calendar.

Each of these is presented as a meaningful step forward. And on paper, some of them are.

Yet the deeper I look, the more I'm convinced we're solving the wrong problem. Every one of these reforms is downstream of something nobody wants to name.

We have a trust problem. And we've built a fortress to protect against betrayal — never realizing the fortress itself is what's grinding the system to a halt.

I've spent the last fifteen years on every side of this table — health plans, health systems, IPAs, MSOs. The problems from organization to organization differ in nuance, but they're almost always rooted in a lack of communication or trust amongst stakeholders who should, in theory, be on the same side.

Clayton Christensen captured the pattern exactly in the introduction to The Innovator's Prescription:

"Almost every day somewhere in the United States, a group of health-care reformers convenes a conference. We've attended many of these. Nearly without exception the participants talk past each other. This one focuses on the uninsured poor, that one on prescription drug coverage for the elderly, another on overuse of expensive diagnostics technology, and still someone else on the cost of end-of-life care. Someone decries the perversions of fee-for-service reimbursement, while someone else bewails the failings of capitation.

They talk past one another because they don't share a common language and common understanding of the root causes of these problems. Unable to agree on the problem, and without a language for understanding one another, they find it impossible to articulate and agree upon promising solutions."

We still don't have that shared language. And without it, the real problem stays hidden in plain sight.

The Trust Crisis: The Quiet Collapse at the Heart of Healthcare

Healthcare is uniquely relational. Patients come to us at their most vulnerable — often literally placing their lives in our hands. Providers hold asymmetric information and a fiduciary duty that goes far beyond a typical commercial transaction. Payers and regulators are meant to steward shared resources on behalf of all of us.

When trust erodes between any of these parties, the entire ecosystem turns adversarial. Cooperation becomes a liability. Self-preservation becomes the rational response.

The numbers are sobering.

That finding comes from a landmark JAMA Network Open study tracking trust across 24 survey waves. The decline cut across every demographic: age, gender, race, education, income, geography. Gallup polls have shown similar erosion in ratings of doctors' ethics. Even among clinicians themselves, confidence in the systems they work within — hospitals, health plans, regulators — has declined sharply.

The pandemic accelerated fractures that were already forming, but it did not create them. Patients feel like data points in a transaction. Clinicians feel micromanaged by prior authorizations, metrics, and audits. Payers feel gamed by coding practices and risk-adjustment strategies. Employers watch premiums climb while outcomes stagnate.

Almost every dysfunction we complain about — skyrocketing costs, chronic-disease mismanagement, administrative bloat, clinician burnout — traces back to this breakdown of trust between patients, providers, payers, employers, and regulators.

Why Trust Eroded: Many Roots, One Common Soil

These fractures did not appear overnight. Western medicine has been evolving for centuries — from a deeply relational, community-based healing art to a highly industrialized, transactional system. The soil was tilled long ago. Today's acute crisis simply made the erosion impossible to ignore.

The roots are interconnected, and good intentions exist on every side:

Incentive misalignment

Fee-for-service still rewards volume over value; payers respond with layers of controls. Providers feel pressured to do more; payers feel they must protect against overutilization. Mutual suspicion follows.

Radical opacity

Pricing remains opaque, quality data fragmented, and risk-adjustment models subject to endless debate and gaming. When no one can see the full picture clearly, trust suffers. The v28 risk adjustment model transition is a recent case in point — changes that have created an uneven regulatory field and particularly challenge value-based care providers trying to operate in good faith.

Fragmentation and data silos

Different stakeholders see only pieces of the patient's story. Coordination fails. Errors happen. Blame circulates. Variation in documentation practices and record-keeping across EHR systems creates a mess of inconsistent, incomplete data that prevents real actionable analysis at scale.

Financialization and consolidation

Private equity ownership, hospital mergers, insurer concentration — many driven by legitimate scale and efficiency goals — have created a widespread perception that profit has eclipsed care. Corporate practice of medicine (CPOM) laws in many states, originally designed to shield clinical judgment from corporate influence, have in practice pushed physicians into greater business leadership and administrative roles rather than allowing them to focus on patient care.

Regulatory and policy whiplash

Constant rule changes make it hard to believe the game is fair or stable. The LEAD Model's 10-year horizon stands out precisely because it is such a rare exception.

Cultural and historical wounds

Surprise billing scars, opioid crisis fallout, media narratives of greed — and more recently, pandemic-era moments when patients felt profoundly unheard. Early Long Covid patients described lengthy diagnostic odysseys, symptoms dismissed or attributed to anxiety, and a system that wasn't equipped to listen at scale to novel, patient-reported realities. It became a vivid illustration of what happens when the patient voice gets sidelined in a system that has drifted away from its relational roots.

Information asymmetry and vulnerability

Economist Kenneth Arrow pointed this out more than sixty years ago: healthcare's inherent uncertainty makes trust economically different from every other market. Yet we have built systems — rules, audits, and technology — that often amplify the very uncertainty and power imbalance they were meant to correct.

Trust is not a soft virtue. It is the social capital that lets complex systems function. When it is gone, we layer on more rules, more audits, and more technology that only deepen the distrust. Prior authorizations, narrow networks, and endless audits create far more friction than they prevent the abuses they were intended to stop. The fortress itself is what keeps everyone on edge.

The Vicious Cycles This Creates

The erosion is self-reinforcing.

Defensive medicine and over-testing drive higher costs. Tighter payer controls follow. Clinician burnout rises. Patient experience worsens. Adherence drops. Populations get sicker. Costs climb even higher.

Chronic conditions — which still account for roughly 90% of U.S. healthcare spending — remain tragically unmanaged because no stakeholder fully trusts the others enough to invest seriously in prevention and coordination. Administrative waste, estimated at 25–30% of total spending, becomes "necessary self-defense" against perceived gaming.

Even well-intentioned value-based care experiments often falter — not because the clinical intent is wrong, but because the infrastructure for fair, transparent risk-sharing does not yet exist at scale. I've written separately about the structural barriers that keep value-based care stuck.

The result? Greater distrust. Another round of rules. Another fortress wall.

Rebuilding Trust: The Honest Path Forward

At the center of every stakeholder sits the same person — the patient, the shared consumer. Physicians, hospitals, payers, suppliers, and employers are all links in one supply chain whose end product is human health. When trust breaks down between any links in that chain, the customer suffers: degraded quality, inflated costs, broken service.

Real solutions begin when we treat one another as true partners and prioritize the health of the patient above all. That requires a new kind of leadership — servant leaders inside every organization who drive partnerships instead of protecting turf.

We need shared diagnosis — echoing Christensen — plus mechanisms that make cooperation rational and rewarding again: long-term alignment (the LEAD Model's decade-long stable benchmarks are a promising step), radical transparency, friction reduction, and a relentless focus on outcomes over process.

Technology and AI are powerful tools — but only when they enable human relationships and accountability, not replace them.

The fortress won't fall on its own. But every time stakeholders sit down with the same facts, the same definitions, and the honest goal of making each other succeed, one more brick comes down.

Healthcare can be relational again. It starts with the courage to diagnose the real problem — together — and then do the work.