No Mercy / No Malice: Less for More

0:00Support for the show comes from Northwest Registered Agent. Your business identity is everything that makes your business legitimate and professional. With Northwest Registered Agent, you don't just form a business, you start a complete foundation built for privacy, credibility, and growth. That includes registered agent service, a business address, operating agreement, domain, website, professional email, phone number, and built-in privacy. In other words, your home address, personal email, and phone number stay private. Don't pay hundreds or thousands of dollars where you can get from Northwest for free. Visit NorthwestRegisteredAgent.com slash profG free and start using free resources to build something amazing. Get more with Northwest Registered Agent at NorthwestRegisteredAgent.com slash profG free. When it comes to your business, you want cards and tools you can trust. MX Corporate helps put you in control. Set custom-spend parameters to help fit your business needs and quickly issue unlimited corporate cashback cards, all backed by best-in-class fraud protection

1:03and the powerful backing of American Express. Get started at go.amx slash MX Corporate. In terms of apply. Your heart can tell you a lot about your health. Apple Watch Series 12 measures your heart rate every five seconds with the most accurate heart rate sensing and awareable. So your vital zap now with heart rate variability can tell you when something is off. And your readiness score can let you know when to rest and when to push. Here are the story in every heartbeat with Apple Watch Series 12. The features described are for wellness purposes only and not for medical use. iPhone 11 or later require based on Apple conducted study of heart rate accuracy August 2026. Visit apple.com slash Apple Watch Series 12. I'm Scott Galloway and this is no mercy, no malice. Nearly 165 million Americans receive health insurance through their employers. This year premiums are expected to rise by 11%.

2:03As healthcare costs rise, demand side solutions result in higher prices and reduced benefits. It's time to look at the supply side of the equation. Less for more as read by George Haunt. In my next life, I'm coming back as a Navy SEAL, Broadway dancer or chiropractor. However, in this life, I should have gone into insurance. Yeah, insurance. If you meet someone who has meddling IQ, exceptional EQ and is making $600,000 a year, there's a decent chance they are an insurance. This industry thrives by tapping into an instinct, fear. Will gladly suffer a series of guaranteed losses to avoid the possibility of a catastrophic one?

3:05Nowhere is this more evident than with health insurance. Of the wealthy nations at this year's World Cup, the US is the only one that doesn't guarantee health care. In many industrialized nations, employers play a small role via payroll deductions in funding universal coverage. But only in America is employment tied directly to that coverage, meaning employers can shift rising healthcare costs to labor while workers who lose their job also lose their coverage. For people under 65, employer-sponsored plans are the leading source of health insurance, providing benefits to approximately 165 million American workers and their families. Without reducing benefits, premiums for employer-sponsored plans are projected to increase this year by an average of 11% year on year. The steepest rise in two decades and more than three times the

4:12rate of inflation. Prof. Media's premiums are increasing 9% year on year. We're seeing a slightly smaller jump thanks to the professional employer organization that handles our payroll taxes, etc., allowing a firm like ours with fewer than 50 employees to participate in a larger plan. Meanwhile, many companies are shifting a greater share of their costs to their employees with the average worker paying 8% more year on year to cover higher payroll deductions for premiums and out-of-pocket charges, including deductibles and copays. If you're getting the feeling that America's private health insurance market is a drag on businesses and workers, trust your instincts. When a market fails, our tendency is to provide demand-side subsidies. If health care is unaffordable, the logic goes we should subsidize access, helping more companies and people pay for it.

5:17The demand-side approach feels morally right, directing help toward those who need it. But because demand-side solutions do nothing to control costs, subsidies are akin to pouring fuel on a flame. Actually, it's worse than that. Between 2011 and 2024, the average insurance premium increased by $3,143, 78%, while health spending per person rose by $2,844, 84%. According to an analysis by Yale economist Zach Cooper and University of Wisconsin Business School Professor Stuart Craig. Over the same period, insurer markups, the portion of the premium that covers insurance companies' administrative costs and profits, decreased from 19% to 15%. The growth in health spending accounted for 91% of the overall growth in average premiums.

6:23We found that health insurance premiums increased nearly $1 for dollar with health spending. Over a 40-year career, Willie Sutton robbed more than 100 banks, stealing an estimated $2 million roughly $20 million in today's dollars by the last time he was apprehended in 1952. According to legend, when a reporter asked him why he'd hit all those banks, Sutton said, because that's where the money is. If he were alive today, Sutton would likely have directed his talents toward the health care industry. Total US health care spending makes up 18% of GDP, and that's expected to rise to 20% by 2034. Health care is projected to account for 37% of all new jobs created through 2035, according to data from the Bureau of Labor Statistics.

7:28Not all growth is good growth, however. An aging population and the growing prevalence of chronic conditions, heart disease, cancer, diabetes are the primary drivers. Several trends are sending health care costs higher. AI, which many had hoped would lower administrative costs, is actually increasing reimbursements paid by private insurers. Providers are using AI to better document care, meaning the same health care interactions generate more billing codes and greater profits. Increased demand for GLP1s is also a factor, fueling an 81% increase in pharmaceutical spending to treat obesity, and a 13% increase in spending on diabetes treatments, according to a PWC report. Greater demand for mental health services is also raising costs, with utilization increasing 10% from 2023 to 2024, and surging 62% since 2018. Finally, the No Surprises Act, which was meant

8:39to protect patients from unexpected out-of-network bills, has inflated costs because providers are using its arbitration provision to dispute reimbursements and winning 88% of the time. To save money, some employers are increasing employee premium contributions and or reducing benefits, including coverage for GLP1s. Meanwhile, the share of companies turning to health reimbursement arrangements essentially stipends that led employees by their own coverage on the open market increased 53% year-on-year in 2026. All of this is happening against the backdrop of industry consolidation. From 1998 to 2023, there were more than 2,000 hospital mergers. The share of hospitals operating independently declined from 90% to 31% from 1970 to 2024, and now 9 out of 10 US hospital markets

9:45are classified as highly concentrated. Meanwhile, only 42% of physicians work in an independent physician-owned practice, down from 60% in 2012. A 2025 HHS analysis found that hospital mergers in concentrated markets can raise prices up to 65%. Willie Sutton needed a gun and a getaway car. Today's health systems just need to merge their way toward a captive market. Every election cycle candidates tell Americans their health care system is expensive and broken. We spend two times what other OECD nations spend and by that metric should be the healthiest nation on earth, but instead we achieve worse results than our peers. The US continues to be in a

10:48class by itself in the underperformance of its health care sector, researchers at the Commonwealth Fund wrote in a 2024 report. For those in the back, that's the wrong kind of exceptionalism. As it turns out, we're also exceptional when it comes to the scarcity of our health care supply. According to federal data, 92 million Americans live in an area where there's a shortage of primary care. The US produces just 8.6 new medical graduates per 100,000 people well below the OECD average of 15. Another sign of scarcity? We average 2.8 hospital beds per 1,000 people compared to the OECD average of 4.3 hospitals clinics and doctors offices account for 52% of total health care expenditures

11:48compared to 8% for drug costs. Talking about drug prices wins elections as patients typically pay for prescriptions out of pocket. Addressing provider costs by unblocking supply bottlenecks makes for a lousy stump speech, but good policy. So what's the fix? The Niskin Encenter has a blueprint and it comes down to one word more, more doctors, more clinics, more competition. Start with the pipeline. Congress froze Medicare funded residency slots at 1996 levels, so we're training the same number of doctors for a country with 70 million more people. In 2023, Congress added 1,000 residency slots over a five-year period, a good start, but we need more doctors and we need to steer them toward primary care, especially in underserved

12:50areas where the shortage is worst. The best way to do that, as my friend Mark Cuban has argued, is to make medical school free, while empowering universities to require students to work for a stint where shortages are most acute. Next, remove local barriers to practice, so labor can freely move where demand is greatest. Only 30 states grant nurse practitioners full practice authority, while state licensing laws restrict the supply of primary care doctors by an estimated 27%. We should also welcome foreign train providers. This year nearly 12,000 foreign train doctors applied for US residency. More than 5,000 didn't get one, and without a US residency, most states won't let them practice. Proversely, some of those doctors attended American medical schools, but were forced to return

13:52to their home country because they couldn't get a visa. Meanwhile, an estimated 263,000 immigrants and refugees with undergraduate degrees in health-related fields, mostly nurses and physician assistants, are underutilized due to licensing restrictions. This isn't a labor shortage, it's an oversupply of red tape. We're also driving up costs by restricting the supply of hospitals. 35 states still have certificate of need laws, which let incumbent hospitals veto future competitors. Imagine Chipotle needing Taco Bell's permission to open a store. The supply crunch is further compounded by healthcare costs that vary widely for the same services. Here's how. Medicare pays a hospital-owned clinic nearly double what it pays an independent practice for identical care. So hospitals spent years buying up doctors offices,

14:59hanging a new sign on the door, and sending taxpayers a bigger bill for the same service. Paying the same rate for the same service, i.e. site neutral payments removes one of the biggest incentives for consolidation. It would also save Medicare and estimated $170 billion over a decade. We often frame healthcare reform as a choice between public and private solutions, but that's misleading. Employer-based plans, as well as plans purchased via the Obamacare exchanges, are both heavily regulated and heavily subsidized, making healthcare the most favored sector in the tax code. In 2025, taxpayers poured $512 billion into the healthcare industry through Obamacare premium tax credits and deductions for employer-based premiums, certain medical expenses, and health savings accounts designed to de-risk individuals with

16:04high deductible plans. As economist Paul Krugman wrote in August, the government's role is so large that US healthcare is better described as partially privatized socialism than as anything resembling a free market. I've argued in favor of expanding Medicare slowly by lowering the eligibility age by two years every year for the next decade. That would reduce premiums for employers since people ages 45 to 64 register 32% of healthcare spending compared to 31% for those 44 and younger. It would also set free the one out of every four workers who say they're locked into their job because of healthcare. With more enrollees and legal reforms, Medicare will have greater leverage to negotiate lower prices. Medicare is also more efficient

17:06with just 1.3% of its spending going to administrative costs. Medicare Part D, prescription drugs and advantage plans, both of which engage private insurance companies to manage benefits spend 8% and 17% respectively on administrative costs. But as long as we keep subsidizing inefficient wildly profitable private insurance, costs will keep climbing across the board. Expanding Medicare while propping up the private side is like flooring the gas with your other foot on the brake. There's lots of noise, the smell of burning rubber, and you go nowhere. Insurance sells fear. American healthcare monetizes this fear as we've built the only system in the developed world where losing your job is a medical emergency. We need less insurance and less fear. And the cheapest way to reduce fear is to stop manufacturing it.

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