Why $5T in healthcare runs on 60-year-old software
Chamath Palihapitiya
· Chamath Palihapitiya
· March 26, 2026 at 14:03
· ⏱ 7 min read
| Read on Substack ↗
Summary
The U.S. healthcare system's $5 trillion cost is structurally locked in by a 1966 software architecture (MUMPS) that fused OS, language, and database, preventing data mobility and creating a $1 trillion administrative layer. LLMs offer a new path to interpret fragmented clinical data without rebuilding the core infrastructure, potentially driving efficiency gains by working on top of existing systems.
•A 1966 decision at Massachusetts General Hospital produced MUMPS, a fused OS/language/database running on 4KB RAM that still underpins most EHRs today.
•Up to 50% of patient records fail to match correctly when exchanged between different hospital systems.
•The U.S. spends roughly $1 trillion annually on healthcare administration — 25–30% of total spending and 3.5x Canada's per capita cost.
•The Change Healthcare ransomware breach (Feb 2024) cost $2.45B, exposed 192.7M Americans, and was enabled by a missing multi-factor authentication on a single portal.
•Six major attempts to solve EHR interoperability over 40 years have all failed to address all four required components: connection, consistent formatting, interpretation, and governance.
•Epic holds 42% of the hospital EHR market (nearly 70% among large hospitals), while UnitedHealth insures 52M lives, employs 90k physicians, and processes 40% of U.S. claims through Change Healthcare.