Why healthcare is so stuck

Exploring structural reasons behind stagnation in hospital systems.

Why Is Healthcare So Stuck?

Tracing Six Common Frustrations to a Systemic Root

In healthcare, we are surrounded by chronic, frustrating problems that seem intractable. Patients experience long delays for diagnoses. Insurance costs are crushing, yet claim denials are common. Providers are burning out at alarming rates, and hospitals struggle to hire. Local communities are even asked to provide tax support to keep their hospitals viable.

We treat these as separate issues, assigning blame to different parties: payers, providers, regulators, or patients. This is a mistake. These are not six different problems; they are six symptoms of a single, deeper systemic conflict. Using a Theory of Constraints (TOC) lens, this article traces these Undesirable Effects (UDEs) to a hypothesized root cause: a system architecture that forces providers and payers into an adversarial, high-friction relationship focused on administrative defense rather than patient throughput.

The “Everywhere Problems”

As a systems architect, I am trained to look for patterns. In today’s U.S. healthcare landscape, a distinct pattern of dysfunction emerges. We can articulate it through six common Undesirable Effects (UDEs) that any patient, provider, or administrator will recognize:

1. It takes far too long to get diagnosed. Patients wait weeks or months for specialist appointments, imaging, or simple consultations, all while their condition and anxiety may be worsening.

2. Insurance is very expensive and has high deductibles. Families and employers face crippling premiums, and even then, high deductibles mean patients are reluctant to seek care, effectively making them uninsured for routine issues.

3. Insurers often deny claims. Patients and providers alike spend countless hours fighting for payment on services already rendered, a process so draining it often leads to giving up.

4. Local healthcare systems report difficulty hiring. From frontline nurses to specialized physicians, hospitals report chronic and severe workforce shortages.

5. Local hospitals require increased tax benefits. We see bond measures and tax levies proposed to support the finances of local hospitals, framing them as community assets in financial peril.

6. Provider burnout is a chronic problem. The people we trust with our care are themselves suffering, with reports of burnout, moral injury, and early retirement becoming the norm.

The conventional response is to attack each problem in isolation. We try to solve burnout (UDE 6) with “resilience training.” We fight claim denials (UDE 3) one by one. We address hiring (UDE 4) with signing bonuses.

This is firefighting. It’s exhausting, expensive, and it doesn’t work. The problems persist because we are not addressing the root cause. These UDEs are not independent; they are logically and causally linked.

A Systems Diagnosis: From Symptoms to Root Cause

My work is based on the methods of Dr. Eli Goldratt, founder of the Theory of Constraints (TOC). When faced with a complex system full of chronic problems, TOC provides a tool called the Current Reality Tree (CRT). A CRT is a logical map that connects the symptoms (the UDEs) to find the core driver—the one (or few) root causes that, if addressed, would cause the majority of the symptoms to resolve.

Based on the six UDEs above, a clear and troubling hypothesis emerges. The core driver is not a single group’s incompetence or greed. The core driver is the adversarial and high-friction administrative architecture of the U.S. healthcare system.

The system is not designed for patient care. It is designed for billing, coding, and revenue defense. This design forces every actor—provider and payer alike—into a zero-sum game that consumes the very resources needed to deliver care.

Let’s trace the causal chains.

Tracing Chain 1: The Administrative Engine of Burnout

We must start with the administrative burden because the numbers are staggering. In the U.S., administrative costs are estimated to account for 20-30% of all healthcare spending. One recent analysis was even more stark, finding that for every dollar hospitals spent on direct patient care in 2023, they spent nearly two dollars on administrative and operational costs.

This is not just paperwork. This is the engine of our first causal chain.

This massive Administrative Burden (prior authorizations, billing disputes, complex EHR documentation) falls directly on providers. It is a primary driver of UDE 6: Provider Burnout. When physicians and nurses spend more time fighting with software and justification forms than they do with patients, burnout is the logical and predictable result. It’s not a personal failing; it’s a systemic one.

This leads directly to the next link. A burned-out workforce doesn’t stay. Burnout-related turnover costs the U.S. health system billions annually. This creates UDE 4: Difficulty Hiring Providers.

Here, a new factor—one I see in my consulting work—accelerates the problem: local market competition. If a smaller health system is competing with a larger, wealthier one, it is in a bidding war for a shrinking pool of candidates. This competition, combined with the burnout-driven exodus, makes the hiring shortage acute.

The final link in this chain is simple: when a system has chronic staffing shortages (UDE 4), it cannot meet demand. The result is

UDE 1: It takes far too long to get diagnosed. Patients are forced to wait because the system’s capacity is consumed by administrative friction and its resulting workforce crisis.

Tracing Chain 2: The Financial Squeeze

The second causal chain starts with the same root but focuses on the flow of money. The adversarial system manifests as UDE 3: Insurers deny claims.

This is a critical symptom. For a provider, a claim denial is not a simple administrative correction; it is a direct assault on their cash flow. Nearly 90% of medical groups report an increase in claim denials, which directly erodes their financial stability.

Providers must now invest more money to fight for the money they are already owed. The cost to appeal a single claim averages over $43, and providers spend nearly $20 billion per year in this fight. This is pure, non-value-added waste.

This fight, combined with the massive overhead from Chain 1, creates a condition of chronic Provider Financial Strain. Hospitals, particularly non-profit and rural ones, operate on razor-thin margins. They are financially fragile.

This fragility leads directly to UDE 5: Local hospitals require tax benefits. A hospital that is financially sound does not need to ask for local tax levies. This request is a symptom of a business model that is broken—a model where the cost of administrative conflict and uncompensated care (which we will see next) exceeds revenue.

But what about the rest of us? This financial strain on the provider side has to be balanced. Providers cannot survive on low reimbursements and high administrative costs. They compensate by aggressively negotiating higher rates from the payers they can charge more: private insurers. This “cost-shifting” to make up for financial shortfalls, along with the high administrative costs within the insurance companies themselves, are passed directly to the customer.

The result is UDE 2: Insurance is very expensive and has high deductibles.

The Vicious Cycle that Connects It All

The system’s cruelty is that these two chains create a vicious, self-reinforcing cycle.

High deductibles (UDE 2) cause patients to delay or forego care. When they finally do seek care, they are sicker (making UDE 1 worse) and often cannot pay their high deductible bill. This creates “uncompensated care,” which lands as another massive blow to the provider’s finances, reinforcing their financial strain (and need for UDE 5).

Simultaneously, the administrative fight over claims and prior authorizations (UDE 3) directly also causes care delays (UDE 1). A patient’s diagnosis is delayed not by a medical reason, but by an administrative one.

All six UDEs are locked in a feedback loop, driven by the same core logic.

Visualizing the Core Problem

When we lay out this logic, the fog of “blame” disappears and the system’s architecture is revealed. We can visualize this hypothesized Current Reality Tree (CRT) to see how the surface problems are connected to the root.

Hypothesized Causal Map of Healthcare Frustrations

This diagram shows a core conflict. The system, as currently designed, forces providers into two mutually exclusive goals:

1. Goal A: Provide high-quality, responsive patient care.

2. Goal B: Survive financially by navigating a complex, adversarial administrative system.

Because the resources (time, money, staff) required for Goal B are consumed by fighting the system, they cannot be applied to Goal A. This is the central conflict of our healthcare system, and it is the source of all six UDEs.

Breaking the Gridlock: A Path Forward

If we accept this diagnosis, the solutions become radically different.

We must stop trying to optimize the broken pieces. We must stop blaming individuals. Resilience training for burnout is like teaching someone to tread water in a tsunami. A hospital CEO cannot fix this, nor can an insurance executive. They are both trapped in the same broken logic.

The solution is to change the system architecture.

This is where my perspective as an outsider is an advantage. I am not here to tell hospital administrators how to run their hospitals; they already know how. I am here to expose the hidden assumptions and conflicts that make their jobs impossible.

Our focus must shift from firefighting to redesign. We must ask:

• What if we designed a system that radically reduced the administrative load, freeing up the 20-30% of “waste” to be redeployed for care?

• What if we could create trust between payers and providers, replacing the “deny-and-appeal” chassis with one of shared data and common goals?

• What if we measured “throughput” as patient wellness achieved rather than billable codes submitted?

These are not pipe dreams. They are engineering and systems architecture challenges. The tools from Theory of Constraints and Lean, accelerated by modern AI, provide a path. But it requires that we first stop, look at the diagram, and agree on the nature of the problem.

The problem is not the people. It is the system.

If you are a leader who is tired of fighting symptoms and ready to discuss the architecture, I invite you to start that conversation.

John Sambrook Founder, Common Sense Systems http://common-sense.com | contact@common-sense.com

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