Incumbent Paradigm · Healthcare Delivery · Phase 4: Breaking

The Sick Care System

Fee-for-service, specialty silos, 18-minute visits, administrative extraction. 4 of 5 forces stressed.

M31 Capital · February 2026
Phase 4
Status: Breaking
4/5
Forces Stressed
$4.5T
Annual US Spending
34¢
Per Dollar → Admin

The biomedical model of healthcare delivery is at Phase 4. Four of five structural forces are stressed. Only regulatory capture maintains the current configuration. The Goldman Sachs memo asked the quiet part aloud: "Is curing patients a sustainable business model?"

Five Forces Assessment
Economic ViabilityStressed — costs spiraling, ROI declining
Scientific ValidityStressed — chronic disease outcomes poor despite spending
Cultural LegitimacyStressed — UnitedHealthcare moment revealed public rage
Institutional IntegrityStressed — 63% physician burnout, trust declining
Regulatory CaptureHolding — but value-based mandates creating cracks

Investment Implications

Long
Value-Based Care Enablers
Pearl Health, Aledade, ChenMed — volume to value transition.
Long
AI Diagnostic Platforms
Cross-specialty synthesis solving the silo problem computationally.
Short Risk
Pure Fee-for-Service
Hospital systems with no value-based strategy face structural decline.
Monitor
ACA Mandate Risk
Legislative removal of mandates activates short thesis immediately.
M31 Assessment

Breaking — Phase 4

The sick care system is in its final structural phase. Long value-based care enablers. Short pure fee-for-service. The transition premium is the trade.