Thank you for this thoughtful exploration of how AI can transform healthcare economics. The Jevons Paradox framing is compelling, and your examples of Jack versus Jill powerfully illustrate the value of proactive care.
Applying the Tension Transformation Framework reveals an even deeper paradox you've identified but not fully named: the healthcare system's identity-strategy tension is precisely what makes abundant consumption culturally incompatible with current thinking. You write that "consuming more healthcare is bad" is the cultural obstacle—but whose culture are we talking about?
Here's what's critical: the "fear of utilization explosions" you describe is incumbent fear, not patient fear. Health plans, health systems, clinicians, and employers dread utilization explosions because their revenue models are built on scarcity-based pricing. Patients have zero concern about utilization explosions except when scarcity limits their access. Remove the scarcity constraint, and patients would enthusiastically consume infinite healthcare if it improved their health outcomes.
Your pricing models (per task, per workflow, per episode, per patient) are genuinely Creative responses—they redesign the incentive architecture rather than optimize fee-for-service. But here's the structural irony: the very institutions that would need to adopt these models are organizationally invested in the scarcity that made them profitable. The hospital-health plan-PBM industrial complex cannot think their way to zero-marginal-cost infinite healthcare while maintaining their current identity. That's not a critique—it's a diagnostic observation about identity-strategy misalignment.
Utah's AI Sandbox demonstrates what becomes possible when you bypass incumbent identity constraints. Teen mental health support and prescription refill automation—these generate "utilization explosions" with virtually zero incremental cost. They're exactly the innovations incumbents won't pursue because scarcity fuels their revenue models. The sandbox creates space for Architect-identity actors to build solutions the current system is structurally incapable of imagining.
And the demographic reality makes this urgent: clinician shortages are accelerating globally. We're facing a supply-demand imbalance that requires zero-marginal-cost infinite healthcare as the primary model, not a nice-to-have innovation. The current system, operating from Victim identity, will approach this with Maladaptive responses—more regulation to ration access, more consolidation to protect market position, more administrative complexity to maintain scarcity pricing.
The Creative response you're articulating is fundamentally about routing around the incumbent complex. Patients and AI-enabled services need pathways that don't require permission from institutions whose identity depends on scarcity. That's what makes pricing models like "per patient unlimited access" so transformative—they align provider incentives with patient health rather than with utilization management.
The question isn't whether infinite healthcare is economically sustainable. You've demonstrated it is. The question is whether we'll enable Architect-identity actors to build it, or whether we'll allow Victim-identity incumbents to Maladaptively suppress the very abundance that could solve our supply crisis while improving population health. Utah suggests the path forward: create regulatory sandboxes where Creative responses can prove what's possible, then let mobility and federalism propagate the innovations that actually work.
Also, a huge assumption you’ve made is that medical services actually have an impact on “health”. This is the mythology behind “Healthcare”.
Actually, it’s a things people do on their own, such as smoking less, drinking less, exercising more that are the biggest drivers of healthcare outcomes.
The cost of healthcare services actually have a surprisingly small effect on health.
Eventually, everyone cares about healthcare. Perhaps now we can literally afford to care about it earlier in our lives. I'm all for that, especially with aging parents who need more of my time and attention each year.
Excellent article! I’d love to see that you address the issue of provider credentialing. Milton Friedman pointed out that medical licensing generally serves to reduce the available supply while having a marginal impact upon the quality of services delivered.
Most of the AI links you provided seemed to provide either “subclinical“ or “support“ services for things like cancer care, etc.
Most medical services are provided through fee-for-service (even today) and these almost always billed under a medical license (MD, DO, RN, PT, PharmD, etc.)
Thanks for the interesting article and hopefully things will work out the way the article described. In my 25 years in healthcare I have never seen insurance companies makes changes because it leads to better treatment, better prevention, or even cost savings. There are many treatments, tests, and processes that could improve things for the patient and the insurer and the insurers have shown no interest. Similarly, patients are reluctant to utilize treatments that can benefit them even if they are free. None of these players act rationally so if and when AI can make improvements in healthcare there will be a lot of barriers. Hopefully, the younger generations will take the lead.
This was a terrific article. In essence, how do we lower overall costs, improve outcomes and reduce wait times….which all leads to a more productive society.
"Implicit in all of these pricing models is an additional tailwind: AI tools that automate administrative tasks..."
Timely post as our company just announced a new offering pointed squarely at reducing administrative and operational burden (https://verifiable.com/credagent). Your premise really resonates with me. We're entering a new era that will be defined by expansion of care and access rather than limits.
Thank you for this thoughtful exploration of how AI can transform healthcare economics. The Jevons Paradox framing is compelling, and your examples of Jack versus Jill powerfully illustrate the value of proactive care.
Applying the Tension Transformation Framework reveals an even deeper paradox you've identified but not fully named: the healthcare system's identity-strategy tension is precisely what makes abundant consumption culturally incompatible with current thinking. You write that "consuming more healthcare is bad" is the cultural obstacle—but whose culture are we talking about?
Here's what's critical: the "fear of utilization explosions" you describe is incumbent fear, not patient fear. Health plans, health systems, clinicians, and employers dread utilization explosions because their revenue models are built on scarcity-based pricing. Patients have zero concern about utilization explosions except when scarcity limits their access. Remove the scarcity constraint, and patients would enthusiastically consume infinite healthcare if it improved their health outcomes.
Your pricing models (per task, per workflow, per episode, per patient) are genuinely Creative responses—they redesign the incentive architecture rather than optimize fee-for-service. But here's the structural irony: the very institutions that would need to adopt these models are organizationally invested in the scarcity that made them profitable. The hospital-health plan-PBM industrial complex cannot think their way to zero-marginal-cost infinite healthcare while maintaining their current identity. That's not a critique—it's a diagnostic observation about identity-strategy misalignment.
Utah's AI Sandbox demonstrates what becomes possible when you bypass incumbent identity constraints. Teen mental health support and prescription refill automation—these generate "utilization explosions" with virtually zero incremental cost. They're exactly the innovations incumbents won't pursue because scarcity fuels their revenue models. The sandbox creates space for Architect-identity actors to build solutions the current system is structurally incapable of imagining.
And the demographic reality makes this urgent: clinician shortages are accelerating globally. We're facing a supply-demand imbalance that requires zero-marginal-cost infinite healthcare as the primary model, not a nice-to-have innovation. The current system, operating from Victim identity, will approach this with Maladaptive responses—more regulation to ration access, more consolidation to protect market position, more administrative complexity to maintain scarcity pricing.
The Creative response you're articulating is fundamentally about routing around the incumbent complex. Patients and AI-enabled services need pathways that don't require permission from institutions whose identity depends on scarcity. That's what makes pricing models like "per patient unlimited access" so transformative—they align provider incentives with patient health rather than with utilization management.
The question isn't whether infinite healthcare is economically sustainable. You've demonstrated it is. The question is whether we'll enable Architect-identity actors to build it, or whether we'll allow Victim-identity incumbents to Maladaptively suppress the very abundance that could solve our supply crisis while improving population health. Utah suggests the path forward: create regulatory sandboxes where Creative responses can prove what's possible, then let mobility and federalism propagate the innovations that actually work.
Also, a huge assumption you’ve made is that medical services actually have an impact on “health”. This is the mythology behind “Healthcare”.
Actually, it’s a things people do on their own, such as smoking less, drinking less, exercising more that are the biggest drivers of healthcare outcomes.
The cost of healthcare services actually have a surprisingly small effect on health.
Eventually, everyone cares about healthcare. Perhaps now we can literally afford to care about it earlier in our lives. I'm all for that, especially with aging parents who need more of my time and attention each year.
ε(´סּ︵סּ`)з
Excellent article! I’d love to see that you address the issue of provider credentialing. Milton Friedman pointed out that medical licensing generally serves to reduce the available supply while having a marginal impact upon the quality of services delivered.
Most of the AI links you provided seemed to provide either “subclinical“ or “support“ services for things like cancer care, etc.
Most medical services are provided through fee-for-service (even today) and these almost always billed under a medical license (MD, DO, RN, PT, PharmD, etc.)
Thanks for the interesting article and hopefully things will work out the way the article described. In my 25 years in healthcare I have never seen insurance companies makes changes because it leads to better treatment, better prevention, or even cost savings. There are many treatments, tests, and processes that could improve things for the patient and the insurer and the insurers have shown no interest. Similarly, patients are reluctant to utilize treatments that can benefit them even if they are free. None of these players act rationally so if and when AI can make improvements in healthcare there will be a lot of barriers. Hopefully, the younger generations will take the lead.
Thanks! "Expanding the current market" is a kill for us to pitch the investors so far...
This was a terrific article. In essence, how do we lower overall costs, improve outcomes and reduce wait times….which all leads to a more productive society.
"Implicit in all of these pricing models is an additional tailwind: AI tools that automate administrative tasks..."
Timely post as our company just announced a new offering pointed squarely at reducing administrative and operational burden (https://verifiable.com/credagent). Your premise really resonates with me. We're entering a new era that will be defined by expansion of care and access rather than limits.