The Kennedy–Oz Medicare reforms begin to correct the incentives that reward treating illness over preventing it. An IPAK-EDU think tank developed a broader blueprint for giving Americans greater control over their healthcare dollars, rewarding measurable health improvement, and building a financially sustainable system in which everyone benefits when patients become healthier.
By James Lyons-Weiler, PhD
Popular Rationalism | November 8, 2026
I thank Murray Sabrin, Antony Sammeroff and others who participated in the think tank for doing their part. Let’s see to it that America becomes healthier, wealthier, and wise.
HHS Officially Recognizes: That Which You Underwrite Grows
On November 4, 2026, Health and Human Services Secretary Robert F. Kennedy Jr. and Centers for Medicare & Medicaid Services (CMS) Administrator Dr. Mehmet Oz announced a series of Medicare reforms that begin confronting one of the most consequential defects in American healthcare financing: the system has developed extraordinarily sophisticated mechanisms for paying doctors, hospitals, and insurers to manage illness, but far less effective mechanisms for avoiding perverse incentives and rewarding them when patients become healthier and require less medical care.
The announcement represents a meaningful change in federal reimbursement policy. CMS is expanding payment pathways for prevention, health coaching, smoking cessation, behavioral health services, and coordinated primary care while modifying the financial incentives governing Accountable Care Organizations (ACOs). The agency is also addressing overlapping payments, correcting reimbursement loopholes, and allowing approved care organizations to reduce or eliminate certain patient cost-sharing obligations beginning in 2027.
Kennedy summarized the objective:
“Medicare should reward clinicians for keeping people healthy.”
Spot on. That which you underwrite grows.
For generations, American healthcare financing has rewarded the delivery of medical services with extraordinary precision. We have billing codes for diagnoses, consultations, laboratory tests, imaging, procedures, hospital admissions, and treatment of complications. We have established elaborate reimbursement schedules and administrative systems that determine which services qualify for payment and how much each provider receives. Yet the system remains comparatively poorly equipped to reward a physician who prevents a patient from developing the condition that would have generated those billable encounters.
A patient who develops type 2 diabetes may generate years of revenue through medication management, laboratory monitoring, specialist consultations, and treatment of complications. A patient whose physician helps prevent diabetes may generate far less revenue, even when the intervention produces greater health benefits and reduces future expenditures. The physician who succeeds in preventing illness may save the healthcare system money without receiving an appropriate share of the value created.
This contradiction does not require physicians to act against their patients’ interests. Most physicians want their patients to become healthier. The problem lies in the financial structure surrounding clinical practice. Hospitals depend on revenue from services delivered. Insurers manage claims and utilization. Healthcare organizations allocate resources toward activities that support their financial survival. Investors respond to the expected returns from treatments, technologies, and service delivery.
When financial success depends more reliably on treating disease than preventing it, the system naturally develops greater capacity to treat disease.
The Kennedy–Oz reforms begin changing those incentives. Their importance, however, becomes clearer when we examine the larger transformation that remains possible.
In 2025, IPAK-EDU undertook a healthcare financing reform initiative that examined how America could move from sickcare to wellcare through a comprehensive restructuring of payment, patient choice, provider compensation, insurance, regulatory requirements, and the use of technology to improve clinical outcomes.
The initiative produced a broader blueprint than the reforms CMS has now finalized. It contemplated changing the entire economic relationship among patients, physicians, healthcare workers, insurers, and the institutions that control healthcare expenditures.
The federal government has begun moving in a compatible direction. The next challenge is to complete the transformation.
Our Healthcare to Wellcare Initiative: Reconsidering the Entire Financial Architecture
On May 31, 2025, I published From Sickcare to Wellcare: What Effective Deregulation in Healthcare Really Looks Like, subtitled Ending the Era of Profiting from Sickness in U.S. Healthcare: Fix the System by Paying for Health Instead of Procedures.
The article identified the fundamental defect in the financing of American medicine: reimbursement systems reward interventions and utilization more consistently than they reward prevention, durable recovery, and improved health. I argued that effective deregulation must go beyond removing administrative requirements. It must strategically replace regulatory and financial structures that reward the wrong outcomes.
The article was part of a broader initiative, Healthcare to Wellcare: An Agenda to Make America Healthy Again, developed through IPAK-EDU. Our interdisciplinary think tank included biomedical scientists, economists, members of the general public, and an anarchist.
That combination was intentional. Healthcare financing is a biomedical problem because expenditures should produce meaningful improvements in health. It is an economic problem because payment structures determine how organizations allocate resources. It is a public policy problem because government regulation shapes what providers may offer and what insurers must cover. It is also a question of individual liberty because patients frequently possess limited control over how their own healthcare resources are spent.
The anarchist perspective introduced a challenge that conventional healthcare policy discussions too often avoid: Why should an institution acquire extensive authority over an individual’s medical choices simply because it occupies a privileged position between the patient and the provider?
The economists examined the incentives governing insurance, healthcare utilization, risk pooling, and provider behavior. Biomedical scientists examined how interventions could be evaluated according to clinically meaningful outcomes rather than administrative measures. Members of the public brought direct experience with insurance restrictions, opaque pricing, deductibles, and the growing distance between the person receiving care and the institutions controlling payment.
We were not attempting to produce another collection of slogans about prevention. We wanted to understand the entire flow of healthcare dollars, from the people who supply them to the institutions that control them, the organizations that receive them, and the health outcomes those expenditures are supposed to produce.
The resulting reform agenda addressed subscription-based primary care, performance-based financial dividends, long-term investment reserves, catastrophic insurance protection, reduced interference by insurance intermediaries, adaptive clinical monitoring, and regulatory pathways for testing alternative arrangements.
It also contemplated a practical mechanism for connecting patients and physicians through individualized annual health improvement agreements, with financial incentives distributed across the healthcare organization according to verified progress.
These components belong together. Changing reimbursement without changing patient control leaves the financial intermediaries in command. Increasing patient control without creating incentives for effective prevention may change who pays without changing what the system produces. Rewarding outcomes without independent verification creates opportunities for gaming, selective enrollment, and misleading claims of success.
A complete reform must address all three.
The Patient–Physician Agreement: Making Health Improvement the Contract
The most direct expression of the wellcare principle is an annual health improvement agreement between each patient and physician.
Under the IPAK-EDU model, the physician and patient would jointly establish a written record of the patient’s current health status, the improvements they intend to pursue over the following year, and the clinical measures that will determine whether progress has occurred. Both would sign the agreement, making the patient an active participant in defining success rather than merely a recipient of services.
For a patient with hypertension, the agreement might establish goals involving blood-pressure control, physical function, and reduction of cardiovascular risk. For someone with impaired glucose regulation, it might identify sustained improvements in glycated hemoglobin (HbA1c), metabolic health, and prevention of progression to type 2 diabetes. A patient recovering from a stroke might prioritize mobility, independence, and the ability to perform daily activities.
The goals would have to reflect the individual’s circumstances. A patient with advanced chronic illness may reasonably seek to preserve function or avoid deterioration rather than achieve an arbitrary laboratory target. A person with a disability should not face financial penalties because a particular outcome is medically unattainable. Patients must retain access to necessary treatment regardless of whether they achieve the goals.
The agreement would therefore begin with a clinically meaningful question: What improvement in this patient’s health is both desirable and reasonably achievable?
The physician and patient would then determine the interventions, monitoring, and follow-up needed to pursue those goals.
This arrangement differs fundamentally from a system that rewards physicians for completing specified encounters or documenting compliance with standardized administrative requirements. It makes the patient’s actual condition the focus of the financial relationship.
The IPAK-EDU proposal extends this principle into the compensation structure of the healthcare organization.
Every November, patients and healthcare workers would become eligible for incentive bonuses based on verified progress toward the annual health improvement goals.
The proposed dividends would include physicians, nurses, administrators, custodial staff, and other employees whose work supports the organization, along with the patients themselves.
Including custodial staff may initially seem unusual, but the reasoning becomes clear when we consider how healthcare organizations function. Infection prevention, environmental hygiene, patient safety, scheduling, communication, timely follow-up, and reliable administration all contribute to the conditions under which patients receive effective care. A hospital cannot achieve high-quality outcomes through physicians alone.
The proposed incentive system would give the entire organization a shared interest in improving patients’ health rather than rewarding departments primarily according to the volume of services they generate.
Implementation would require careful rules governing the distribution of bonuses, protection against unfair attribution, and safeguards for patients with complex conditions. A pilot would need to test whether shared incentives improve collaboration and clinical outcomes without encouraging undertreatment, patient selection, or manipulation of reported results.
But the central idea is straightforward: everyone involved in healthcare should have an economic reason to want the patient to become healthier.
A hospital should not need another hospitalization to improve its financial position. A primary care practice should not have to generate additional visits merely to remain solvent. A patient who successfully follows an agreed prevention plan should participate in the benefits of that success.
The November dividends would make health improvement a shared economic accomplishment.
Changing What Medicare Pays For
The November 4 CMS announcement begins addressing the same incentive problem through changes to Medicare’s payment rules.
The 2027 Physician Fee Schedule establishes national payment pathways for health and well-being coaching, creates dedicated billing codes for shared medical appointments, and increases payment valuations for smoking cessation and behavioral health assessments. These provisions recognize that prevention and sustained behavior change require clinical time, professional support, and coordinated services that conventional reimbursement has not always financed adequately.
CMS is also strengthening the Medicare Shared Savings Program, which allows ACOs to receive financial rewards when they meet quality requirements and control expenditures relative to program benchmarks. Beginning April 1, 2027, approved ACOs may reduce or eliminate certain Medicare Part B cost-sharing obligations for assigned beneficiaries, potentially reducing financial barriers to necessary care.
The agency is addressing payment duplication as well. When qualifying office visits and minor procedures occur on the same day, Medicare will reduce payment for the lower-valued service by 20%, reflecting overlapping clinical work already included in the procedure’s valuation. CMS also estimates that correcting a separate incentive-payment loophole will prevent approximately $2.38 billion in unintended payments over ten years.
These changes matter because they modify the financial rules that shape clinical practice. They do not eliminate fee-for-service reimbursement, nor do they establish a comprehensive system of patient-specific outcome agreements and performance dividends. Nevertheless, they begin redirecting financial incentives toward activities that may prevent illness and improve coordination.
The scale of the opportunity is substantial. In performance year 2024, CMS reported that 75% of the 476 participating ACOs earned shared savings totaling approximately $4.1 billion, while generating about $2.5 billion in net savings to Medicare relative to program benchmarks.
Those numbers describe financial performance under the program’s accounting rules. They do not independently establish that every reported dollar represents disease prevented or a causal reduction in healthcare expenditures. Benchmark construction, patient assignment, coding, risk adjustment, and expenditure trends can influence the results.
A complete wellcare system would therefore require two distinct forms of accountability: evidence that organizations use resources responsibly and evidence that their patients experience meaningful improvements in health.
Financial savings cannot substitute for clinical success.
The ACCESS Model: A Step Toward Paying for Outcomes
Another CMS initiative moves closer to the wellcare principle.
The CMS Innovation Center’s Advancing Chronic Care with Effective, Scalable Solutions (ACCESS) Model began in July 2026. This voluntary, ten-year demonstration tests outcome-aligned payments for technology-supported management of conditions including hypertension, diabetes, chronic musculoskeletal pain, and depression.
Instead of reimbursing every intervention through a separate conventional billing event, ACCESS allows participating organizations greater flexibility in delivering care while linking financial rewards to specified clinical outcomes.
This begins addressing a problem that the IPAK-EDU initiative identified: effective prevention and chronic disease management often require combinations of services that do not fit neatly into traditional reimbursement categories.
A patient may benefit from nutrition counseling, medication management, physical activity, remote monitoring, behavioral support, and regular communication with a clinical team. The most effective combination may require fewer conventional office visits than the traditional payment system expects.
Outcome-aligned financing can support that flexibility.
The ACCESS Model remains a demonstration, and its long-term effectiveness has not been established. Its incentives could also encourage selective enrollment or excessive attention to measured outcomes unless CMS evaluates those risks carefully.
Nevertheless, the model represents an important movement toward rewarding clinical results rather than simply reimbursing clinical activity.
The IPAK-EDU proposal would extend that principle into the annual relationship between the patient and physician, then distribute financial rewards across the broader care team and the patient according to verified progress.
That additional step matters because health improvement rarely depends on one isolated professional interaction. It emerges from continuing relationships, coordinated activities, patient decisions, and the environment in which care occurs.
Subscription-Based Care: Separating Health Maintenance from Catastrophic Risk
The original May 2025 wellcare article proposed a more fundamental change to routine healthcare financing.
Instead of requiring every primary care interaction to pass through the conventional insurance billing system, patients could purchase defined preventive and primary care services through predictable subscription arrangements.
A subscription-based practice could receive recurring revenue for providing access to consultations, monitoring, preventive services, and longitudinal care. That arrangement could give physicians greater flexibility to communicate with patients, intervene early, and coordinate care without generating a separate claim for every interaction.
The economic advantage is that the practice’s revenue would become less dependent on the number of procedures or visits performed. The clinical team could devote more resources to maintaining health, provided the subscription adequately financed necessary services and the organization remained accountable for quality and access.
The original article illustrated the possibility of low-cost subscription arrangements, including examples near $10 per week. That figure was illustrative rather than an actuarially established price for comprehensive care. Actual costs would depend on the services included, patient risk, staffing, local prices, and the financing of services outside the subscription.
The proposal did not envision eliminating insurance protection for major medical events.
Catastrophic illness, serious trauma, complex surgery, and prolonged hospitalization can impose expenses that individuals cannot reasonably finance through routine savings. Risk pooling remains necessary to protect patients against unpredictable and potentially devastating financial losses.
The distinction between routine care and catastrophic protection creates room for alternative financing arrangements. Individuals could exercise greater control over routine expenditures while maintaining collective protection against major medical costs.
This would require careful coordination with Medicare, Medicaid, and existing insurance law. Subscription arrangements cannot simply replace statutory benefits or eliminate protections for patients who need expensive ongoing care. Their sustainability and effects on access would need testing.
But the underlying principle is sound: the financing mechanism for predictable routine services need not be identical to the mechanism that protects people against catastrophic medical risk.
Separating these functions could reduce administrative complexity while giving patients and physicians greater freedom to organize preventive care around clinical needs.
Performance Dividends and Long-Term Investment Reserves
The May 2025 article proposed another component that the current Medicare reforms do not address directly: performance-based dividends combined with long-term investment reserves.
Under the wellcare model, healthcare organizations would receive financial rewards for verified improvements in patient and community health. These dividends would recognize reductions in preventable chronic illness, meaningful clinical improvement, patient-reported outcomes, and responsible use of resources.
The annual November bonus mechanism provides one possible operational structure for distributing those rewards.
The original proposal also contemplated allocating a portion of organizational revenue—illustratively 10%—to long-term investment reserves. The purpose was to create a financial foundation capable of supporting preventive care, infrastructure, and future healthcare needs without relying indefinitely on increasing reimbursements or temporary grants.
A reserve system could support clinical technology, workforce development, community prevention programs, and other investments that improve care over time. Investment earnings might eventually provide an additional source of financial support, although the scale of those earnings would depend on contributions, returns, withdrawals, and the costs of operating the program.
The 10% figure requires actuarial evaluation. A financially stressed rural clinic cannot necessarily reserve that share of revenue without compromising current services. Different organizations would require different capitalization arrangements, and reserve assets would need appropriate governance, liquidity protections, and safeguards against conflicts of interest.
The principle remains important.
A healthcare organization should be able to build long-term financial strength by improving health and investing responsibly in its capacity to deliver effective care.
That is different from a system in which financial growth depends primarily on increasing the volume or price of services delivered.
The combination of subscription revenue, performance dividends, and investment reserves could create a more stable economic foundation for prevention-oriented healthcare, provided the model proves clinically effective and financially sustainable.
Real-Time Monitoring and Adaptive Clinical Care
The original wellcare proposal also recognized that modern technology makes it possible to evaluate patient health more continuously than conventional episodic care allows.
The May 2025 article proposed integrating machine-learning-supported analysis, wearable monitoring, and real-time clinical feedback into preventive care. It envisioned weekly feedback loops capable of identifying deteriorating health, flagging anomalies, and helping clinicians adjust interventions before complications become severe.
This capability matters because chronic disease develops over time. A patient’s blood pressure, glucose regulation, activity, sleep, medication response, and functional status can change between scheduled appointments. Waiting until the next billable encounter may delay recognition of a problem that could have been addressed earlier.
A well-designed monitoring system could identify concerning trends and support timely clinical review. It could also help patients understand their progress toward the goals established in their annual health improvement agreements.
The technology must remain subordinate to clinical judgment. Machine-learning predictions require validation, monitoring for errors, and evaluation across the populations in which they are used. False alerts can create unnecessary testing and anxiety, while missed signals can delay care. Data privacy, security, patient consent, and interoperability are essential.
The financial system must also support the work required to use these tools responsibly. Monitoring generates little value if clinicians lack the time or resources to interpret results and respond appropriately.
This is another reason to move beyond reimbursement that depends on individual encounters. A prevention-oriented practice may produce value through continuous observation, timely communication, and early intervention rather than through a large number of office visits.
The ACCESS Model’s technology-supported approach creates an opportunity to test aspects of this concept, but a comprehensive wellcare architecture would integrate monitoring into the patient’s broader care plan and the organization’s outcome accountability.
Regulatory Reform Must Create Room for Better Financing
The May 2025 article identified three federal regulatory frameworks as important targets for reform: 42 C.F.R. Part 412, governing major aspects of Medicare inpatient hospital payment; 42 C.F.R. Part 438, governing Medicaid managed care; and 45 C.F.R. Part 170, establishing health information technology certification requirements.
These frameworks influence how organizations receive payment, manage risk, document services, and exchange clinical information. They do not all impose the same restrictions, and reform must distinguish their specific functions.
Medicare’s inpatient prospective payment system, governed in substantial part by Part 412, pays hospitals according to diagnosis-related groups and related adjustments. This structure creates incentives to manage costs within admissions, but it does not directly reward a hospital for preventing the admission altogether. A wellcare reform would need to connect hospital financing with broader prevention and population-health objectives while protecting access to necessary inpatient care.
Medicaid managed care, governed under Part 438, already includes capitated payments, quality requirements, and mechanisms for managing population-level costs. The opportunity is to strengthen the relationship between those financial arrangements and independently verified health outcomes, while preventing organizations from improving financial performance by avoiding patients with greater needs.
Health information technology certification under Part 170 addresses interoperability, functionality, and other requirements for certified systems. The original wellcare proposal called for greater flexibility to incorporate adaptive analytics, machine learning, and real-time feedback. Any revision should identify the particular certification requirements that impede useful innovation rather than presume that the entire framework prevents it.
The May article also identified federal demonstration authorities, including Section 1115 of the Social Security Act and Section 1332 of the Affordable Care Act, as possible pathways for testing alternative financing arrangements.
These authorities have different legal scopes. Section 1115 permits qualifying demonstrations involving specified federal health programs, including Medicaid, subject to statutory and administrative requirements. Section 1332 concerns state innovation waivers involving specified Affordable Care Act provisions. Neither independently authorizes unrestricted changes to Medicare benefits or payment law.
A practical wellcare demonstration would therefore require careful selection of the appropriate statutory authority, potentially including CMS Innovation Center authority under Section 1115A of the Social Security Act.
The objective should be targeted regulatory reform that creates room for rigorous testing while preserving essential protections.
Deregulation is useful when it removes barriers to better care. It is harmful when it eliminates safeguards without establishing that patients will benefit.
The standard must remain measurable improvement in health, access, and responsible use of resources.
Returning Control of Healthcare Dollars to Patients
The financing proposals share a deeper objective: giving Americans greater control over how their healthcare resources are spent.
Americans finance healthcare through taxes, wages, employer contributions, insurance premiums, deductibles, copayments, and direct expenditures. Employer-sponsored insurance can obscure the economic burden because employers pay part of the premium, but that contribution remains part of the cost of employing workers. Public programs distribute costs through taxation and other financing mechanisms.
The resources ultimately come from the population.
Yet patients often have limited authority over how those resources reach providers. Insurance networks restrict choices. Prior authorization requirements can delay recommended treatment. Administrative rules determine which services providers can offer sustainably. Prices may remain difficult to discover until after care occurs, and patients frequently cannot evaluate competing services using transparent information about cost and effectiveness.
The result is an extraordinary inversion of ordinary economic relationships: the people whose resources finance the system frequently possess less practical control over the transaction than the institutions administering payment.
The wellcare initiative explored how to reverse that relationship without abandoning the financial protections that insurance provides.
Subscription-based primary care could give patients more direct relationships with clinicians. Dedicated health reserves could expand their ability to direct routine expenditures. Transparent pricing could make comparison possible. Performance dividends could return part of the value of successful prevention to patients and healthcare workers. Catastrophic insurance would continue protecting individuals against major financial risks.
These components would not eliminate the need for regulation or professional standards. Healthcare markets contain substantial information asymmetries, and patients cannot evaluate every clinical decision as though they were purchasing ordinary consumer goods. Emergency care also limits the practical possibility of shopping among providers.
But those limitations do not justify preserving every existing layer of administrative control.
A better financing system should allocate decision-making authority to patients and clinicians wherever feasible, reserve collective financing for risks that require it, and demand accountability from every institution receiving healthcare dollars.
The objective is greater freedom over healthcare spending, accompanied by stronger evidence about what those expenditures accomplish.
Who Should Profit When Prevention Works?
The economic consequences of the reform become clearer when we examine who receives the benefits of successful prevention.
Consider a patient with elevated blood pressure, impaired glucose regulation, and progressive metabolic deterioration. Under conventional reimbursement, that patient may eventually generate years of medical expenditures for chronic disease management, specialist consultations, medications, and treatment of complications.
Now suppose the patient and physician establish an annual health improvement agreement. The patient enters a structured intervention program, receives appropriate clinical monitoring, and achieves sustained improvements in blood pressure, metabolic regulation, and physical function. Independent evaluation establishes that the intervention reduces the patient’s risk of preventable complications.
The patient benefits through better health and potentially lower personal expenditures. The physician and care team have produced clinical value. The insurer or public program may avoid future costs. The broader community benefits when the patient remains healthier and more capable of participating in family, work, and civic life.
Under the traditional system, however, the financial value of those avoided expenditures may never return to the people who made prevention possible.
The IPAK-EDU proposal would create a mechanism for sharing appropriate financial rewards with the patient and the healthcare organization, including employees whose work supports successful care.
The annual November incentive would make that relationship explicit.
Such a program must avoid rewarding favorable outcomes that merely reflect healthier patient selection. It must distinguish genuine improvements from changes in coding, incomplete follow-up, regression to the mean, and other statistical artifacts. It must also prevent organizations from reducing necessary care to generate apparent savings.
A patient who avoids hospitalization because an effective intervention prevented disease represents a success. A patient who avoids hospitalization because an insurer denied necessary treatment does not.
Both events may reduce expenditures. Only one advances the purpose of healthcare.
The system must therefore reward verified health improvement while maintaining access to necessary treatment and monitoring for adverse outcomes.
This is where biomedical science becomes indispensable to healthcare finance.
Science Must Determine Whether the Incentives Work
Every financial incentive creates opportunities for beneficial behavior and for manipulation. The history of healthcare quality measurement demonstrates why the choice of endpoints matters.
If an organization receives bonuses for meeting a narrow set of laboratory targets, it may concentrate on those targets while neglecting other aspects of patient health. If it receives rewards for reducing expenditures, it may become reluctant to enroll patients with complex conditions. If it receives bonuses based only on patients who complete a program, it may appear successful because participants who fail to improve disappear from the denominator.
These problems are predictable and must be addressed before financial rewards become substantial.
An IPAK-EDU-style pilot would need to document the eligible population, baseline clinical status, agreed goals, intervention exposure, attrition, adverse outcomes, and longitudinal results. Evaluators would need to distinguish the effect of the intervention from secular trends, patient selection, and changes in disease coding.
For metabolic disease, relevant outcomes might include incident diabetes, sustained HbA1c improvement, blood-pressure control, clinically defined remission, cardiovascular events, functional status, and medication requirements. Smoking cessation programs should measure sustained abstinence rather than merely enrollment. Chronic pain interventions should evaluate function, pain interference, treatment harms, and the ability to participate in daily life.
The analysis must also account for the costs of delivering the intervention. A program may improve health without saving money, and such a program may still be worthwhile. But policymakers should not confuse cost-effectiveness with cost savings or present favorable financial benchmarks as proof of clinical benefit.
Risk adjustment requires particular scrutiny. Adjustment can help account for differences in baseline patient risk, but inappropriate adjustment can also remove genuine treatment effects or introduce bias when analysts control for variables affected by treatment. Investigators must examine confounding, collider bias, overfitting, selective reporting, missing data, and changes in the population under observation.
Whenever feasible, randomized trials or other credible causal designs should test whether the proposed incentives actually improve health. Independent replication and transparent reporting should become part of the financing architecture.
The goal is to establish a system that rewards real improvements rather than improvements in paperwork.
Rural Healthcare Offers an Opportunity to Test the Full Model
The same financing principles informed my work on West Virginia’s Rural Health Transformation Program, where I proposed a statewide implementation framework emphasizing early identification of high-risk patients, technology-supported interventions, longitudinal clinical monitoring, and independent verification of outcomes.
The framework included metabolic disease prevention, smoking cessation, physical fitness, environmental health interventions, and public reporting. It also addressed the practical infrastructure required to reach rural populations, including clinical partnerships, field verification, and coordinated delivery of services.
This work illustrates why financing reform must extend beyond reimbursement codes.
A payment rule does not recruit patients, build community partnerships, deliver an intervention, or establish a reliable system for measuring outcomes. Those activities require infrastructure, personnel, technology, and sustained financing.
CMS has begun addressing part of the rural financing challenge through changes to the Medicare Shared Savings Program. Beginning with performance year 2028, eligible ACOs receiving advance investment payments may qualify for quarterly payments of $45 per beneficiary meeting specified rural or low-income criteria, compared with $25 for other beneficiaries, subject to program requirements.
Such arrangements could help organizations develop preventive care capacity in underserved communities, although their actual effects will depend on implementation and evaluation.
A comprehensive rural wellcare program could combine these financing opportunities with patient-specific annual health agreements, coordinated clinical interventions, independent outcome measurement, and incentives that recognize the contributions of patients and healthcare workers.
Successful demonstrations could then inform reforms in other regions and populations.
The purpose would be to establish a sustainable model in which organizations can improve their financial position by preventing avoidable disease rather than relying on repeated treatment of its consequences.
The Full Arc of Reform Is Now Visible
The November 2026 HHS announcement does not complete the transformation from sickcare to wellcare. Medicare still relies extensively on fee-for-service reimbursement, and the new rule does not establish a nationwide system of patient-specific health improvement agreements or annual outcome-based bonuses. Its physician conversion factors also decline relative to 2026, complicating the financial environment for practices attempting to expand preventive services.
The ACCESS Model moves closer to outcome-linked reimbursement, but its long-term results remain unknown. Accountable care arrangements offer mechanisms for sharing financial savings, but their benchmarks do not automatically establish that patients became healthier because of the interventions they received.
These limitations identify the work that remains.
The IPAK-EDU healthcare financing initiative considered that larger task as a connected problem. It examined where healthcare resources originate, who controls them, how patients and physicians could establish individualized health goals, how successful prevention could generate financial rewards, and how alternative financing arrangements might preserve catastrophic protection while expanding patient autonomy.
Its proposed annual health agreements and November incentives would make patients active participants in defining success and would align the broader healthcare workforce around achieving it.
Its subscription arrangements would reduce dependence on conventional claims processing for routine care. Its investment reserves would create opportunities for long-term financial sustainability. Its machine-learning-supported monitoring would provide clinicians with more timely information about patients’ health. Its regulatory reform agenda would create room for testing alternative models under appropriate legal authority.
Its scientific evaluation framework would require organizations to demonstrate that their programs improve health rather than merely generate favorable financial reports.
The presence of biomedical scientists, economists, members of the public, and an anarchist in the think tank reflected the breadth of the problem. Healthcare finance reform cannot succeed if it examines only clinical outcomes, only costs, only institutional administration, or only individual liberty. The system connects all four, and changing one component changes the incentives governing the others.
I do not claim that HHS derived its reforms from our work. Medicare’s value-based payment initiatives have a history extending well before 2025, and the federal government’s current direction reflects multiple policy developments. The relevance of the IPAK-EDU initiative is that it articulated a broader framework that can help identify what remains to be done.
The federal government has now taken critical first steps by expanding preventive care reimbursement, strengthening accountable care incentives, and testing payment arrangements that reward clinical outcomes.
The next phase should examine how patients can exercise greater control over their healthcare resources and how the entire care team can share in the value of verified improvements in health.
That is the larger opportunity before us.
The Destination Is Wellcare
America does not lack medical expertise, advanced technology, or the financial resources necessary to improve population health. It has a financing system whose incentives have too often directed those resources toward the delivery of services without establishing a sufficiently strong relationship between financial reward and successful health outcomes.
The Kennedy–Oz reforms begin confronting that problem by changing what Medicare pays for. They acknowledge that preventive care, coordinated treatment, and responsible use of resources deserve greater financial support.
But the full transformation requires changing the relationship between the patient, the physician, the healthcare organization, and the money that sustains them.
Under the IPAK-EDU proposal, patients and physicians would agree annually on meaningful health goals, document progress, and share in financial rewards when those goals are achieved. The broader healthcare team would participate in those rewards, giving the organization a common interest in helping patients become healthier. Subscription-based financing and investment reserves would help sustain preventive care. Alternative financing arrangements would expand patient control over routine healthcare spending while preserving protection against catastrophic illness. Independent evaluation would determine whether the incentives work.
These proposals require rigorous testing, actuarial evaluation, and safeguards against unintended consequences. They also provide a concrete direction for the next stage of reform.
The question is no longer whether reimbursement influences healthcare behavior. It does. The question is whether we have the resolve to make that influence serve the people financing and receiving care.
HHS has begun moving the system toward prevention and accountability. The larger opportunity is to create a healthcare economy in which clinicians and patients share wellcare goals, regardless of how the patient gets there, patients control more of their resources, and organizations prosper because the people they serve become healthier. Clinicians should have greater freedom to deliver effective care – including nutrition, movement, sleep and energy.
That which you underwrite grows. If we want health to grow, we must build a financing system that rewards its achievement.
That is how we move from sickcare to wellcare.
Your thoughts matter! Leave a comment.
References
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Lyons-Weiler J. From Sickcare to Wellcare: What Effective Deregulation in Healthcare Really Looks Like. Popular Rationalism. May 31, 2025. https://popularrationalism.substack.com/p/from-sickcare-to-wellcare-what-effective
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Centers for Medicare & Medicaid Services. CMS Finalizes CY 2027 Physician Fee Schedule to Shift from Sick Care to Healthcare and Curb Waste. November 4, 2026. https://www.cms.gov/newsroom/press-releases/cms-finalizes-cy-2027-physician-fee-schedule-shift-sick-care-healthcare-curb-waste
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Centers for Medicare & Medicaid Services. Calendar Year (CY) 2027 Medicare Physician Fee Schedule Final Rule. November 4, 2026. https://www.cms.gov/newsroom/fact-sheets/calendar-year-cy-2027-medicare-physician-fee-schedule-final-rule
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Centers for Medicare & Medicaid Services. CMS-1848-F: CY 2027 Payment Policies Under the Medicare Physician Fee Schedule. 2026. https://www.cms.gov/medicare/payment/fee-schedules/physician/federal-regulation-notices/cms-1848-f
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CMS Innovation Center. Advancing Chronic Care with Effective, Scalable Solutions (ACCESS) Model. https://www.cms.gov/priorities/innovation/innovation-models/access
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Centers for Medicare & Medicaid Services. Medicare Shared Savings Program. https://www.cms.gov/medicare/payment/shared-savings-program
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Electronic Code of Federal Regulations. 42 C.F.R. Part 412—Prospective Payment Systems for Inpatient Hospital Services. https://www.ecfr.gov/current/title-42/chapter-IV/subchapter-B/part-412
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Electronic Code of Federal Regulations. 42 C.F.R. Part 438—Managed Care. https://www.ecfr.gov/current/title-42/chapter-IV/subchapter-C/part-438
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Electronic Code of Federal Regulations. 45 C.F.R. Part 170—Health Information Technology Standards, Implementation Specifications, and Certification Criteria. https://www.ecfr.gov/current/title-45/subtitle-A/subchapter-D/part-170
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U.S. Code. 42 U.S.C. § 1315—Demonstration Projects. https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title42-section1315
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U.S. Code. 42 U.S.C. § 18052—Waiver for State Innovation. https://www.law.cornell.edu/uscode/text/42/18052
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U.S. Code. 42 U.S.C. § 1315a—Center for Medicare and Medicaid Innovation. https://www.law.cornell.edu/uscode/text/42/1315a
IPAK-EDU is grateful to Popular Rationalism as this piece was originally published there and is included in this news feed with mutual agreement. Read More
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