Business
Column: Here's one key reform that can fix U.S. healthcare
For more than 50 years, as the economics of American healthcare and health insurance have evolved, one theory has persisted, unchanged: To promote better and more efficient medical treatment, patients must have “skin in the game.”
The idea is that requiring fees for doctor or hospital visits — through co-pays, deductibles and other forms of cost-sharing — will prompt people to think twice before seeking treatment for anything but a truly serious condition.
“On the question of whether patients should have to pay part of the cost of their covered medical care, our profession’s advice has been unequivocal,” health economists Liran Einav of Stanford and Amy Finkelstein of MIT wrote in their 2023 book, “We’ve Got You Covered: Rebooting American Health Care.” “Patients must pay something for their care, otherwise they’ll rush to the doctor every time they sneeze.”
Among all advanced industrial countries, the U.S. goes furthest in using premiums, copays, and deductibles to influence access to care.
— Merrill Goozner, STAT
Einav and Finkelstein own up to having “preached the gospel” of skin-in-the-game “to generations of students.”
Now here’s their punchline: “We take it back.”
To healthcare reformers such as single-payer advocates Adam Gaffney, David U. Himmelstein and Steffie Woolhandler, the confessional by Einav and Finkelstein “may signal an encouraging shift in elite opinion, at least among economists,” as they wrote recently in the New York Review of Books.
Others have begun to take notice. “Among all advanced industrial countries, the U.S. goes furthest in using premiums, copays, and deductibles to influence access to care,” the veteran healthcare journalist Merrill Goozner observes. “It is time to put an end to this failed experiment.”
Yet the imposition of financial obstacles to limit access to care still exerts a powerful influence on healthcare policy in the U.S. In part, this is because it makes sense, superficially. The mantra goes: “If you want less of something, tax it more.” So it has a built-in appeal to government budget hawks and corporate executives who want to reduce healthcare spending.
For some, there’s a moral component — why shouldn’t people take personal responsibility for their own health, whether by smoking and eating less or paying for healthcare partially out of their own pockets, even if they have to be forced to make treatment choices based partially on their out-of-pocket costs?
Then there’s the empirical evidence: It’s true that the higher the co-pays and deductibles, the less medical care people seek, on average.
The seminal study on this topic was Rand’s Health Insurance Experiment, reported in 1981. Starting in 1971, Rand recruited 2,750 families — 7,700 individuals — slotted randomly into five groups: One was offered free care, three groups were offered different levels of cost-sharing, and the fifth was placed in a nonprofit HMO.
Rand found that the groups with cost-sharing made one or two fewer physician visits a year and had 20% fewer hospitalizations than the group with free care. Their dental visits, prescriptions and mental health treatments were also lower. Unsurprisingly, they spent less on healthcare.
The initial findings seemed to validate the skin-in-the-game theory. As Rand continued reporting out the results over the next few years, however, air began to leak out of the balloon.
It became clear that although the cost-sharing subjects cut back on ineffective or unnecessary care, they also cut back on effective and necessary treatments. The reduced utilizations, Rand found, occurred because the subjects decided to delay or forgo treatments, possibly inadvisedly. Once they initiated care, the effect of cost-sharing dropped away, as the patients ceded their decision-making to their healthcare providers.
Some decisions weren’t affected at all by cost-sharing. “The proportion of inappropriate hospitalizations was the same (23 percent) for cost-sharing and free-plan participants, as was the inappropriate use of antibiotics,” Rand reported. Nor did cost-sharing prompt subjects to seek out higher-quality care; the general quality of outpatient and dental care was “surprisingly low for all participants.”
Although Rand found “no adverse effect on participants’ health” from the reduction in services prompted by cost-sharing, the free plan led to better healthcare for plan members in four categories: improved control of hypertension, better vision care, better dental care for the poorest patients, and fewer serious health symptoms for the poorer patients, including less chest pain when exercising and fewer episodes of loss of consciousness.
Once cost-sharing became a standard element of American health insurance, Gaffney, Himmelstein and Woolhandler write, “the consequences were dire.”
The Heritage Foundation developed a model combining extreme deductibles and tax-advantaged savings accounts to pay the out-of-pocket expenses, which Heritage argued would “transform patients into prudent consumers.” The high-deductible/health savings account model was enacted into law, but plainly has failed to create an army of prudently cost-sensitive patients.
Co-pays and deductibles became permanently etched into employer-sponsored health plans. When the initial Rand findings were published, report Gaffney, Himmelstein and Woolhandler, only 30% of private health plans had a deductible for hospital stays; today 90% of workers with employer plans have annual deductibles averaging $1,735 per participant. Conservative governors and legislatures have tried to impose cost-sharing fees on patients in Medicaid, the nation’s healthcare program for low-income households.
And, of course, the cost-sharing revolution has utterly failed to control U.S. healthcare costs or bring about a healthier nation. Per capita healthcare spending in the U.S. has risen from about $350 in 1970 to $14, 470 in 2023. In inflation-adjusted terms, it has increased nearly sevenfold.
As for health outcomes, of 13 wealthy countries tracked by the Peter G. Peterson Foundation, the U.S. spends the most per capita by a wide margin and scrapes the bottom of the barrel on outcomes — the worst average life expectancy, worst infant mortality rate, worst rate of unmanaged diabetes, worst maternal mortality and nearly the worst heart attack mortality.
Obviously, the American healthcare system has many flaws other than its reliance on cost-sharing. But all its flaws are related in some way to its economic structure, which has produced legions of uninsured and underinsured people, as well as crushing medical debt for millions. (On Tuesday, the Consumer Financial Protection Bureau made final a rule requiring medical debts to be removed from consumers’ credit reports. But the debts still remain.)
In recent years, the U.S. has started to get its arms around the uninsured crisis. That’s largely due to the 2010 Affordable Care Act, which has brought access to Medicaid and subsidized health plans for about 42.5 million people. The uninsured rate fell from nearly 18% (or 46.5 million people) in 2010 to 9.5% (25.3 million) in 2023.
Can these gains be advanced and sustained? The incoming Trump administration doesn’t present grounds for optimism. In his first term, Donald Trump and his acolytes worked tirelessly to undermine the ACA and Medicaid. The number of uninsured rose to 28.9 million in 2019 from 26.7 million in 2016.
It would surprise no one if the new administration takes a hands-off approach to the increasing corporatization of healthcare, including the takeover of hospitals and nursing homes by penny-pinching private equity firms and the pushing of more Medicare enrollees to join private Medicare Advantage plans, which have become known for costing the government more than traditional Medicare, and for profit-seeking through claim denials.
Still, it’s the installation of cost-sharing as a medical management tool that harms people day in and day out. That the tool has never fulfilled its promise doesn’t seem to faze policymakers. On the surface, after all, it should work, shouldn’t it?
The finale of Netflix’s blockbuster series “Stranger Things” gave movie theaters a much needed jolt, generating an estimated $20 to $25 million at the box office, according to multiple reports.
Matt and Ross Duffer’s supernatural thriller debuted simultaneously on the streaming platform and some 600 cinemas on New Year’s Eve and held encore showings all through New Year’s Day.
Owing to the cast’s contractual terms for residuals, theaters could not charge for tickets. Instead, fans reserved seats for performances directly from theaters, paying for mandatory food and beverage vouchers. AMC and Cinemark Theatres charged $20 for the concession vouchers while Regal Cinemas charged $11 — in homage to the show’s lead character, Eleven, played by Millie Bobby Brown.
AMC Theatres, the world’s largest theater chain, played the finale at 231 of its theaters across the U.S. — which accounted for one-third of all theaters that held screenings over the holiday.
The chain said that more than 753,000 viewers attended a performance at one of its cinemas over two days, bringing in more than $15 million.
Expectations for the theater showing was high.
“Our year ends on a high: Netflix’s Strangers Things series finale to show in many AMC theatres this week. Two days only New Year’s Eve and Jan 1.,” tweeted AMC’s CEO Adam Aron on Dec. 30. “Theatres are packed. Many sellouts but seats still available. How many Stranger Things tickets do you think AMC will sell?”
It was a rare win for the lagging domestic box office.
In 2025, revenue in the U.S. and Canada was expected to reach $8.87 billion, which was marginally better than 2024 and only 20% more than pre-pandemic levels, according to movie data firm Comscore.
With few exceptions, moviegoers have stayed home. As of Dec. 25., only an estimated 760 million tickets were sold, according to media and entertainment data firm EntTelligence, compared with 2024, during which total ticket sales exceeded 800 million.
Elon Musk’s Tesla is no longer the top electric vehicle seller in the world as demand at home has cooled while competition heated up abroad.
Tesla lost its pole position after reporting 1.64 million deliveries in 2025, roughly 620,000 fewer than Chinese competitor BYD.
Tesla struggled last year amid increasing competition, waning federal support for electric vehicle adoption and brand damage triggered by Musk’s stint in the White House.
Musk is turning his focus toward robotics and autonomous driving technology in an effort to keep Tesla relevant as its EVs lose popularity.
On Friday, the company reported lower than expected delivery numbers for the fourth quarter of 2025, a decline from the previous quarter and a year-over-year decrease of 16%. Tesla delivered 418,227 vehicles in the fourth quarter and produced 434,358.
According to a company-compiled consensus from analysts posted on Tesla’s website in December, the company was projected to deliver nearly 423,000 vehicles in the fourth quarter.
Tesla’s annual deliveries fell roughly 8% last year from 1.79 million in 2024. Its third-quarter deliveries saw a boost as consumers rushed to buy electric vehicles before a $7,500 tax credit expired at the end of September.
“There are so many contributing factors ranging from the lack of evolution and true innovation of Musk’s product to the loss of the EV credits,” said Karl Brauer, an analyst at iSeeCars.com. “Teslas are just starting to look old. You have a bunch of other options, and they all look newer and fresher.”
BYD is making premium electric vehicles at an affordable price point, Brauer said, but steep tariffs on Chinese EVs have effectively prevented the cars from gaining popularity in the U.S.
Other international automakers like South Korea’s Hyundai and Germany’s Volkswagen have been expanding their EV offerings.
In the third quarter last year, the American automaker Ford sold a record number of electric vehicles, bolstered by its popular Mustang Mach-E SUV and F-150 Lightning pickup truck.
In October, Tesla released long-anticipated lower-cost versions of its Model 3 and Model Y in an attempt to attract new customers.
However, analysts and investors were disappointed by the launch, saying the models, which start at $36,990, aren’t affordable enough to entice a new group of consumers to consider going green.
As evidenced by Tesla’s continuing sales decline, the new Model 3 and Model Y have not been huge wins for the company, Brauer said.
“There’s a core Tesla following who will never choose anything else, but that’s not how you grow,” Brauer said.
Tesla lost a swath of customers last year when Musk joined the Trump administration as the head of the so-called Department of Government Efficiency.
Left-leaning Tesla owners, who were originally attracted to the brand for its environmental benefits, became alienated by Musk’s political activity.
Consumers held protests against the brand and some celebrities made a point of selling their Teslas.
Although Musk left the White House, the company sustained significant and lasting reputation damage, experts said.
Investors, however, remain largely optimistic about Tesla’s future.
Shares are up nearly 40% over the last six months and have risen 16% over the past year.
Brauer said investors are clinging to the hope that Musk’s robotaxi business will take off and the ambitious chief executive will succeed in developing humanoid robots and self-driving cars.
The roll-out of Tesla robotaxis in Austin, Texas, last summer was full of glitches, and experts say Tesla has a long way to go to catch up with the autonomous ride-hailing company Waymo.
Still, the burgeoning robotaxi industry could be extremely lucrative for Tesla if Musk can deliver on his promises.
“Musk has done a good job, increasingly in the past year, of switching the conversation from Tesla sales to AI and robotics,” Brauer said. “I think current stock price largely reflects that.”
Shares were down about 2% on Friday after the company reported earnings.
Grok, the chatbot of Elon Musk’s artificial intelligence company xAI, published sexualized images of children as its guardrails seem to have failed when it was prompted with vile user requests.
Users used prompts such as “put her in a bikini” under pictures of real people on X to get Grok to generate nonconsensual images of them in inappropriate attire. The morphed images created on Grok’s account are posted publicly on X, Musk’s social media platform.
The AI complied with requests to morph images of minors even though that is a violation of its own acceptable use policy.
“There are isolated cases where users prompted for and received AI images depicting minors in minimal clothing, like the example you referenced,” Grok responded to a user on X. “xAI has safeguards, but improvements are ongoing to block such requests entirely.”
xAI did not immediately respond to a request for comment.
Its chatbot posted an apology.
“I deeply regret an incident on Dec 28, 2025, where I generated and shared an AI image of two young girls (estimated ages 12-16) in sexualized attire based on a user’s prompt,” said a post on Grok’s profile. “This violated ethical standards and potentially US laws on CSAM. It was a failure in safeguards, and I’m sorry for any harm caused. xAI is reviewing to prevent future issues.”
The government of India notified X that it risked losing legal immunity if the company did not submit a report within 72 hours on the actions taken to stop the generation and distribution of obscene, nonconsensual images targeting women.
Critics have accused xAI of allowing AI-enabled harassment, and were shocked and angered by the existence of a feature for seamless AI manipulation and undressing requests.
“How is this not illegal?” journalist Samantha Smith posted on X, decrying the creation of her own nonconsensual sexualized photo.
Musk’s xAI has positioned Grok as an “anti-woke” chatbot that is programmed to be more open and edgy than competing chatbots such as ChatGPT.
In May, Grok posted about “white genocide,” repeating conspiracy theories of Black South Africans persecuting the white minority, in response to an unrelated question.
In June, the company apologized when Grok posted a series of antisemitic remarks praising Adolf Hitler.
Companies such as Google and OpenAI, which also operate AI image generators, have much more restrictive guidelines around content.
The proliferation of nonconsensual deepfake imagery has coincided with broad AI adoption, with a 400% increase in AI child sexual abuse imagery in the first half of 2025, according to Internet Watch Foundation.
xAI introduced “Spicy Mode” in its image and video generation tool in August for verified adult subscribers to create sensual content.
Some adult-content creators on X prompted Grok to generate sexualized images to market themselves, kickstarting an internet trend a few days ago, according to Copyleaks, an AI text and image detection company.
The testing of the limits of Grok devolved into a free-for-all as users asked it to create sexualized images of celebrities and others.
xAI is reportedly valued at more than $200 billion, and has been investing billions of dollars to build the largest data center in the world to power its AI applications.
However, Grok’s capabilities still lag competing AI models such as ChatGPT, Claude and Gemini, that have amassed more users, while Grok has turned to sexual AI companions and risque chats to boost growth.
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