Dissatisfaction with health care services is at an all-time high. I don’t just mean that your local hospital has thousands of one- and two-star reviews. In Australia^[1], one out of two individuals is delaying necessary health care due to cost. In China^[2], illness is the leading cause of rural poverty. In the United Kingdom, exploding emergency rooms are not being helped by progressive budget cuts to the National Health System by Conservative governments.^[3] In countries like Ghana, Nigeria, and South Africa, families lament a “no bed crisis” where their loved ones requiring emergency care pass away in the waiting room because of a lack of space in hospitals.^[4] In the United States, medical debt remains the leading cause of bankruptcy.^[5] No matter which country is suffering, politicians and economists are clamoring to diagnose and treat the ills of their healthcare system. Some even accuse current health-care workers of working too slowly, encouraging the use of artificial intelligence, cross-training, and flexible staffing.^[6] But will healthcare systems in each country have a quick fix that will right the ship? Or will it require a planning effort that will transform the society around it in the process?

Against Baumol’s Cost Disease

One attractive explanation for healthcare affordability cited by many heterodox and neoclassical economists is a hypothesis now known as Baumol’s cost disease.^[7] In a seminal paper, William Baumol argued that performing artists struggled to keep pace with increases in their operating costs, as productivity gains in other sectors created gains for other workers, in turn forcing artists to increase their prices to keep up. More generally, this hypothesis states that increases in per-worker productivity in agriculture and manufacturing will lead to wage increases in sectors with low productivity growth because of the cross-elasticity of demand for labor across sectors. In 2012, William Baumol even published a book with the pithy title The Cost Disease: Why Computers Get Cheaper and Health Care Doesn't. Some have called into question the sweeping conclusions of Baumol’s commentary on wide sectors of the economy. Gabe Winant’s The Next Shift moves beyond Baumol’s cost disease by focusing on the political economy of Pittsburgh to paint a picture of the end of industrial employment in steel mills as creating the conditions for social ills that expand the need and use of healthcare for an increasingly elderly population.^[8] Dr. Adam Gaffney’s Supply Side Healthcare affirms Baumol but adds a Roemerian twist, discussing potentially profit-motivated induced-demand in care utilization, motivating increased hospital construction and intensive care usage.^[9] A last hypothesis that I primarily focus on is that of some health economists^[10] who have argued that while some cost growth can be attributed to Baumol’s cost disease, the vast majority is due to secular changes in technical progress in healthcare, leading to a dramatically expanded realm of healthcare goods and services.

To understand why Baumol’s cost disease may be a poor explanation for the rising costs of healthcare, it is useful to do a comparative analysis of global GDP. The GDP share of healthcare has been increasing in most countries since the 1980s. While the U.S.’s GDP share of health has increased from 5 to 15-17%, most high-income countries11 have had a GDP share increase of 5 to 11% from the 1970s to the 2020s. The larger point is that the global GDP share of healthcare services^[11] has increased from 3% to around 7% to 10% since the 1980s. Comparing across other industries, the global GDP share of education services has remained relatively stable around 3%, agriculture has declined from 10% in the 1980s to a stable 4%, and manufacturing GDP^[12] has also stabilized or seen a mild decline. The GDP share of healthcare services has increased relative to other traditional service sectors such as education and traditionally “productive” sectors like manufacturing and agriculture. Is wage growth in healthcare, over a larger but static workforce, the best explanation for these changing shares of global GDP? Baumol’s cost disease seems to say that sectoral costs should grow proportionally between “low-productivity” sectors like healthcare and “high-productivity” sectors like manufacturing, equalizing per-worker productivity-related wage growth across sectors of varying productivity. This clearly cannot explain the secular changes in GDP share devoted to different sectors, as these should remain stable under this hypothesis.

Baumol’s cost disease is likely ignoring other temporal trends in “non-productive” sectors like healthcare that are shaping the demand for labor. When one looks closely at the last 50 years of healthcare innovation, we can observe the introduction and maturation of key interventions like percutaneous coronary procedures^[13], prescription statins^[14], prescription biguanides^[15] like metformin, commercial CT scanning^[16], and modern blood banks^[17] that screen for autoantibodies and bloodborne diseases. These are the bread-and-butter services that global healthcare service delivery is designed around, managing the chronic sequelae of age-related diseases like diabetes, hypertension, and coronary artery disease. What is more fascinating is that some of these older medical products have laid the foundation for repurposing technologies for new indications and driving further overlapping innovation.^[18] This cycle of simultaneous technological changes in healthcare delivery that are creating overlapping complexity may even be evidence for an underdiagnosed Kondratiev wave as proposed^[19] nearly thirty years ago by late German economist Leo Nefiodow. One also cannot ignore that this expanded realm of healthcare services being delivered was superimposed on a compounding increase in lifespan, creating more opportunities to successfully deliver those services at both younger and older ages, as well as in poorer health than was previously possible.

A Crisis Theory of Healthcare

One might look at this development from a neoclassical perspective and predict that the increased demand for healthcare services will be met by an increased supply of those goods and services, brought about by an expanded workforce and infrastructure regimen. However, this is clearly not the case. One need not watch the Pitt to see that healthcare service delivery is in a permanent, prolonged crisis. A McKinsey healthcare workforce report^[20] from 2023 proposes a global healthcare worker shortage of 10 million people. Some back-of-the-envelope math I did to estimate how many workers it would take to raise every country’s healthcare worker density to that of the Netherlands gave me a number of 26 million. I believe this is still a conservative estimate, because definitions of what constitutes a healthcare worker don’t usually include the ancillary workers in logistics, administration, construction, and environmental services. Previous modeling estimates have added 1-2 workers per measured healthcare worker to estimate a real healthcare workforce.^[21] The global unemployed population has recently hovered around 200 million, so the 50-75 million needed healthcare or healthcare-adjacent workers to close global inequities would not totally absorb the unemployed workforce, but it would make a significant dent.

This is the visceral feeling that every modern healthcare worker shows up to the modern healthcare workplace with. They are trained and ready to ration every word, every minute, and every movement of theirs to serve the unsustainable number of patients required to meet the population’s healthcare needs, in line with modern clinical practice guidelines and evidence. I appreciate Dr. Gaffney’s spotlight on poor incentives in interpreting medical evidence, leading to induced demand highlighted by others including the Lown Institute^[22], doctors like Dr. Vinay Prasad[5927e9,] and Dr. John Mandrola^[23], but I would argue that the majority of new medical care since 1970 by volume has a reasonably good evidence base, while a sizeable minority deals with contentious interpretations of medical trials and studies. I think that rationing behavior by healthcare workers is more related to time constraints in providing care with a good evidence base, rather than gratuitous profit-motivated interpretations of medical trials and studies. Some of this economy of movement is also spent fighting for access to care with insurance, dealing with acute shortages of medication and equipment, rapidly changing electronic interfaces with inbuilt technology blackouts, and the constant pressure to incorporate the technological progress happening simultaneously in every sub-specialized field into your own practice setting. Not only are these workers rationing their own labor, they are also met with increasingly precarious work conditions. Premila Nadasen^[24], Gabriel Winant^[25], and Ai-Jen Poo^[26] have meticulously documented the insecure character of care workplaces, with erasure of employee benefits, exploitative staffing practices, and poorly organized work environments forcing individual workers to make ends meet when systems fail.

How do we describe the healthcare crisis, and how does it fit into economic crisis theories of the past? Capitalist crisis theories since Karl Marx’s Falling-Rate-Of-Profit chapter in Capital have tried to explain the etiologies of periodically defined country-wide or global time periods defined by high inflation, high unemployment, low economic growth, and/or high interest rates. This question warrants taking us back to Anwar Shaikh’s 1978 Introduction to History of Crisis Theories^[27] This paper critically analyzed and categorized crisis theories and the time periods they were defined by to see how accurately they described the phenomena at the time they were being used: underconsumptionist theories like those of Rosa Luxemburg^[28] and David Harvey^[29], globalized rate of falling profit theories more recently by Robert Brenner^[30], and Keynesian theories of low effective demand causing stagnation. His paper argued that depending on what was measured, you could argue for any of these theories in certain economic circumstances at different times in history. My modern interpretation of this conclusion is that it is hard to lump and describe crisis theories across differing sectors of the economy because they play by different rules. The crisis that I am describing in healthcare is also not one that can be defined by traditional measures like high unemployment and low economic growth, which may make it not even fit within traditional conceptions of economic crisis. I contend that there is undoubtedly a crisis in healthcare economies even if it may not fit traditional descriptions of one.

As a non-economist, I think the most charitable description to me seems to be underemployment secondary to poor effective demand. Capitalist economies in countries of varying incomes and sizes are simply unwilling to meet the demand for healthcare services that would be in line with the most up-to-date guidelines and practice patterns of the most effective healthcare economies in the world. This is most evident by the lifespan gap between rich and poor countries of 33 years as of 2025, according to the WHO,^[31] as well as within-country life expectancy gaps in countries like the United States between the rich and the poor of nearly a decade.^[32] I argue that the best explanation for this is artificial austerity to fulfill less than the desires for healthcare services of their population and the ability of their healthcare delivery systems to meet everyone’s needs. Some of this can definitely be attributed to wage-related consumption constraints in healthcare services, but I imagine global wage increases may only create healthcare price shocks due to underemployment and underinvestment in infrastructure. Firm competition leading to falling profits seems limited, given the severe under-capacity of suppliers of healthcare for most of the world. Rather than dealing with surpluses, healthcare systems are mostly dealing with thousands of simultaneous acute shortages and planning around them in real time.^[33] Put another way, capitalist countries across low, middle, and high-income are quid pro quo about medical austerity and would rather not scale the best medical care on the planet to every location that needs it, as our best evidence and guidelines would support. Compare this to global access to mobile phones,^[34] enough calories for nourishment^[35], and safely managed drinking water,^[36] all of which are approaching 90 percent except water, which is hovering around 75%. What this tells me is that the lifespan gap in 2026 is less and less explainable by malnourishment, sanitation, or energy blackouts but by the persistent underinvestment in healthcare infrastructure and healthcare workers to treat modifiable disease processes at scale.

Planning is the Solution

How does one fix the misalignment between the demands of the population and services provided at such a severe crisis level? There is no productivity hack, technological trick, or firm structure that will truly ameliorate the crisis for the average healthcare worker or patient. The only fix I can see for modern healthcare woes is a new economic planning paradigm. This is what makes me excited for the revival of debates about economic planning that have featured in the International Network for Democratic Economic Planning (INDEP) and other left publications in North America and Europe. My understanding of planning proposals so far is that their descriptions focus more extensively on the methods through which they severely restrict the private ownership of the means of production and its propagation into private wealth. This is incredibly important, because if you accept Marx’s Capital Vol 1’s theory of the formation of capital, you accept that the economic evolution from exchange of commodities between two citizens/producers to the view of money as a commodity to the use of money to purchase commodities that allows one to make more money is a powerful driving force of historical change. Some proposals like Benanav's^[37] and Saros^[38] propose a technical break between labor and capital with a dual currency system, while Hahnel's^[39] proposes direct deliberation between producer and workers’ council in a more moneyless system, and market socialist proposals like Ackerman^[40] and Roemer's^[41] are more based on rapid redistribution of wealth generated from capital or equalizing wealth shares gained from capital accumulation. The other prominent point of discussion seems to be how to allocate resources to firms. Adaman, Devine,^[42] & Benanav are leveraging the concept of independent firms with a socialized investment function to allocate resources; Cockshott & Cotrell^[43] & Morozov rely more on using the intelligence of technology to make planning choices, and Bookchin^[44] and Hahnel emphasize confederated relationships from existing firms that build interdependencies into fully-fledged economies.

My readings of these proposals were deeply informed by my imagination of how healthcare workers and workplaces would exist under these proposals in relation to each other, across firms, across professions, and within professions. I tried to imagine some fairly complex scenarios that any health-care worker would say are important for patient care: Would patients who have high-risk blood cancers have reasonable access to bone marrow transplant?^[45] How reliably would we be able to emergently transfuse someone who is exsanguinating from an internal hemorrhage? Would a STEMI get percutaneous coronary intervention within 90 minutes?^[46] Would a patient with heart failure get optimal goal-directed medical therapy in the outpatient setting?^[47]These questions may seem facetious from the perspective of general proposals for societal economic planning, but they are the real standards by which healthcare workers, the firms they work for, and to some extent the societies they live in are measured. I refer to Alex Gourevitch’s strong critique of Post-Work Socialism^[48] in Catalyst, where he states that people who want to work in high-stakes industries like healthcare deserve not only “access to the means of production” but access to a high-quality workplace where norms of performance are based on reasonable interpretations of historical, comparative, and evidence-based trends in the field. If one believes in this, then this implies that speculative economic planning will have to develop stronger theories of the worker and the firm that analyze the active, contentious, and politically-determined efforts that shape their relations and professional existence. I think some of the proposals I mentioned earlier engage better with this than others, but I feel it is less emphasized compared to debates about the topics I mentioned earlier and others, which include reducing work hours, ecological considerations within planetary boundaries, and the role of technology.

Study Healthcare Workers & Their Workplaces

I find both Joseph Schumpeter’s Capitalism, Socialism, Democracy (1934) and John Kenneth Galbraith’s New Industrial State (1950) helpful for better understanding how workers and their firms relate to each other and to society at large. These are uniquely relevant discussions for healthcare because this field brings in economic dynamism, product differentiation, labor differentiation, career arcs/education, and interaction with other social systems that are unlike other industries. While Schumpeter’s concept^[49] of creative destruction is relevant to healthcare innovation and cyclical transformation, I would like to focus more on a short chapter he wrote called the “Sociology of the Intellectual” in which he describes the overlap of the intellectual and the professional. He says that not every professional is an intellectual and not every intellectual is a professional, but an intellectual is someone who “wields the power of the spoken or written word” while having “direct responsibility over some practical affairs.” I find his interpretation to be that the professional as an intellectual connects their professional knowledge to the greater political landscape and interprets their professional identity within the context of broader societal change and in relation to other industries. This brought me back to my own politicization in healthcare, where I was transformed in 2017 by the conversation between maternal healthcare workers, patients, and journalists around maternal mortality disparities in the US. I believe that the politicization of workers through the intellectual process is deeply relevant to their self-conception in the workplace, conception of other workers, their relation to other workers, their conception of the firms they work at as well as other firms, and their ideas about appropriate resource allocation inside and outside their sector. Economists are already in a more mature phase of incorporating this into their own efforts to better understand behavioral economics and game theory, with the recent Kenneth Arrow lecture series publication by David Kreps of Arguing About Tastes – Modeling How Context and Experience Change Economic Preferences .^[50] There is no doubt in my mind that the modern healthcare worker (let alone the modern worker) is a “tastemaker” helping consumers select between a nuanced basket of differentiated products and services that need to be tailored to their individual circumstances. If Schumpeter were alive today, he might comment on the intellectualization of the workers in food production, technology, energy production, tourism, professional & legal services, and other fields.

That takes us into a Galbraithian^[51] theory of the healthcare firm. Galbraith describes that “decisions in the modern business enterprise is the product not of individuals but of groups ... “where no single worker, however exalted or intelligent, has more than a fraction of the necessary knowledge.” The terminology I am used to in medical school is “team-based medicine:” understanding that I bring one set of skills, abilities, and responsibilities and someone else brings complementary or sometimes overlapping skill sets, and that we get the job done by working together. He separately astutely points out that “when power is exerted by a group”, and the “decision requires the combined information of a group, it cannot be safely reversed by an individual” without the consultation of the other specialists. This tells the story of modern healthcare delivery as workers with different training may weigh in on different aspects of the same challenge based on their own expertise. This points to the vested political power within the firm to govern complex decisions that power modern society. The firm nurtures a stable environment for specialized workers to facilitate weighing of different expertises and channel the propagation of complex decision trees. It would be hard in any society for outside interests to comment on or shape these internal dynamics, given the nuanced relations, historical and institutional knowledge, and educational background required. Does it not seem like the complex relations between these specialized workers need to be studied in order to influence their functioning even at the economic planning level? This is food for thought for governance of complex and simple firms alike, especially as they choose new technologies and work processes to incorporate towards delivering a larger benefit to society.

Herein lies the essence of the challenge of using Baumol’s cost disease as a broader tool for analysis of political economy. Baumol’s cost disease focuses on process innovations (ones that improve or worsen per-worker productivity) while product innovations (ones that expand/limit the basket of goods/ services, improve the quality or complexity of those products, or increase/ decrease access to them) are ignored. Focusing on per-worker productivity is a flawed metric for many healthcare services because of a poor understanding of what the work actually is and how it has changed in the last fifty years. What this means in real terms is that heterodox economists relying on Baumol’s cost disease are ignoring the real complexities of the evolving roles of an oncology pharmacist, critical care nurse, pathology technician, cardiac perfusionist, or musculoskeletal radiologist, careers which I am well assured they have little understanding or knowledge of. This is where Schumpeter and Galbraith’s economic sociology remains relevant to modern service economies. Schumpeter discusses the nuanced political formations of each of these individual workers, and Galbraith demonstrates how these workers, in tandem, create interwoven knowledge networks that propagate their firms’ functioning. This conception does not apply to healthcare alone, and one can see that workers in fields like construction, food services, and even professional services are becoming even more specialized in their niches while building stable longitudinal knowledge networks. This is a competing hypothesis for why costs for a wide variety of services are rising relative to the production of fixed, exchangeable goods. Are we willing to ignore the quality and complexity that these specialized workers are bringing to their workplace in our economic planning? I can assure you that in healthcare it would cause crisis-level population unrest that would threaten any economic planning efforts.

If we take this analysis seriously, then we want to take seriously the power relations and internal/external battles that are active and dormant in workers, firms, and the populations they serve. It seems that there is a renewed interest in histories of radical republicanism with books by Bruno Leipold, William Clare Roberts, and Alex Gourevitch (Citizen Marx^[52], Marx’s Inferno^[53], From Slavery to the Cooperative Commonwealth^[54]), all works that look at the long history of balancing arbitrary power over others and where these ideas have emerged and strengthened. I find this analysis of arbitrary power extremely relevant to the dynamics of healthcare workers and firms because of the existing knowledge asymmetries, divergences of lived experience, and time-limited decision-making that is the essence of both being a patient and working in the field. As you can imagine, there are already some pre-existing institutions made to correct dominating relationships related to age, ability, experience, knowledge/ education, race, gender, sexuality, and other known power structures under capitalism of varying performance.

Economic planning debates should interrogate these existing power-balancing institutions and at least attempt to incorporate their existing efficacy where relevant or imagine something moderately better as an alternative. One example where this feels very relevant is the re-emergence of attention on effective demand in heterodox economics, whether it is more towards a government jobs guarantee (post-Keynesian perspective) or a functional finance perspective (directing employment towards achieving specific societal goals). Efforts to mobilize more of the workforce towards societal goals, health-related or not, will have to contend with parallel stories of disability and unemployment. The critical health history book Health Communism^[55] by Beatrice Adler-Bolton speaks to this both in the realm of industrializing the care of vulnerable populations, as well as the "worker/ surplus" binary and the challenges differently abled people have faced participating in traditional labor and/or accessing long-term disability payments. Although I may have previously diagnosed modern healthcare challenges as one of effective demand, economic planners should be mindful of what we are demanding and whether it aligns with the goals and visions of the vulnerable people we are claiming to serve with our economic changes. I personally think this is only one of many potential examples speculative planners should consider that directly affect the healthcare field. To patients and healthcare workers alike, I hope that you speak up about your challenges in survival and sustainability in your work and daily life because you are helping us envision a better society.

Disclaimer: The views expressed in this content are solely my own and do not represent those of my employer or educational institution. Any opinions or insights shared here are based on my personal experiences and knowledge. Engaging with this content does not establish a doctor-patient relationship. For any medical concerns or questions, it is essential to consult your personal healthcare provider. They are qualified to provide personalized advice and treatment based on your individual health needs.

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