What Relocalizing Health Actually Means

[00:00:00] Before we start, I want to invite you to Rosetta Fest 2026 in Nashville. This is where employers, unions, and clinicians who are cutting healthcare costs 20-50% while improving care and outcomes share exactly how they did it. Operators learning from operators with patients at the table. Learn more and register at rosettafest.org. Now let's get into today's conversation.

[00:00:25] Hey there. Welcome to a special series within the Relocalizing Health podcast as we count down to Rosetta Fest in Nashville, July 29th to 31st. Each one of these episodes is a quick look inside the book and the communities that inspired it. Real places, real numbers, real people who decided to stop waiting for somebody else to fix healthcare and just built something better themselves.

[00:00:54] You don't have your ticket to Nashville yet. Go grab it at rosettafest.org. This is where people in these stories will actually be in the room with you, very open to sharing their methods and excited to have you copy it and run with it in your community. So let's get into it.

[00:01:21] When people hear Relocalizing Health, a lot of them assume it's just some slogan or a policy proposal or maybe some righty or lefty idea depending on their preconceived notions. But it's not that. It's, let me tell you what it actually means to me. It means treating your community's healthcare dollars as a community resource instead of an extractive expense that leaves town the moment it's spent.

[00:01:48] Think about that. Most communities, healthcare is the biggest industry. Most companies is the second biggest cost item. And most of the money flows straight out of the community to distant corporations and shareholders. And it's extraction dressed up as care. However, Dr. Michael Fine, in his book on medicine as colonialism, framed it powerfully.

[00:02:13] You know, just as colonial powers conquered territories to extract their resources, today's colonial powers are doing that to our healthcare system and through our healthcare system, extracting both money and well-being from our communities. Take, for example, as well-being from our communities. Take, for example, Ashtabula, Ohio and Ashtabula County specifically. There's about 100,000 people there, so that means they're spending $1.4, $1.5 billion in healthcare every year across all ages.

[00:02:44] And conservatively, at least 450 million of that leaves their county every year. That's far more than, you know, just a healthcare problem. That's really an economic development catastrophe. And relocalizing just means keeping that money at home, you know, recirculating it in local relationships between clinicians and patients where it circulates and builds a community up instead of draining it and leaving it in drought.

[00:03:13] And, you know, a note for the folks who think I'm leaving out common sense, we don't need everything local. We don't need a pharmaceutical company in every town, and it's not realistic that every community has a male clinic. There's a course, places for centers of excellence, where you'd go for second opinions and complex procedures. But remember, most care is self-care and care provided by families, and then you have primary care and so on.

[00:03:41] So just a note on that. But here's the part of the book I really want people to understand because it explains why reform keeps failing no matter who's pushing it. There are two fundamental structural flaws underneath all of the efforts that I've seen today. Flaw number one, we fund and govern healthcare and social care in totally separate silos, separate money, separate governance, separate everything.

[00:04:07] And the reason it matters is because 80 to 90% of health outcomes are determined by things outside of the healthcare setting. Things like food, education, housing, transportation. And if you look at budgets at the state or local level, or even the federal level, healthcare is like this Pac-Man that eats up every other budget.

[00:04:31] And so we've built a system that profits from treating the diabetes complication, but has no stake in preventing food insecurity. And that bills for asthma attacks, but can't touch the mold in the apartment causing them. The incentives are upside down, really baked into our design. Flaw number two is we govern at the wrong scale.

[00:04:54] We make healthcare decisions either way too big of a scale, federal or state level, or way too small at the individual provider level, expecting, say, a primary care doc to solve all of society's issues in less than an hour a year they have with the patient. And we miss the zone when this actually works. And you can see this in some communities around the U.S., but also outside the U.S.

[00:05:19] It's kind of that Goldilocks zone, you know, between roughly 25,000 to 500,000, maybe up to 700,000. You know, it's big enough for economies of scale, but small enough to see the actual human beings. And it's about the size of a county or I think of it as district scale, water, fire, school, congressional district. Or it's, you know, the size of a country like Iceland. But here's why this master key is so important.

[00:05:48] When you have one entity invest in prevention, but a different one reaps the savings, like in Medicaid or Medicare, nobody has a reason to invest upstream. And that right-sized governance lets a community capture its own savings and reinvest them. That's the whole game. And this is why reform efforts are destined to disappoint, regardless of their ideological origin, if they don't fix those two things.

[00:06:16] And you can rearrange who pays all day long. I often joke, we already have single payer. I haven't heard of any Australians volunteering to pay for health care. It's all coming from us. And if the funding stays siloed and the government, you know, stays at the wrong size, you get the same waste and underperformance. But I'm not just a theorist, you know, that can't show you how it's working.

[00:06:42] So let's look at some of the things that get at the right scale. So you take Sweden, Jansöping County. Many people think that nationalized systems like Sweden are some monolithic nationalized structure. But in fact, there's localized governance and integrated funding. And they reinvest the savings that come from avoided hospital care straight into home-based and preventive services in our community.

[00:07:12] Unnecessary hospital days for complex patients fell by over 90%. One hospital was able to cut staff beds by 30% because people were getting the right care at home or they just didn't need care at all. You know, because they were able to address, you know, loneliness or, you know, food insecurity.

[00:07:33] On the other hand, to take La Crosse, Wisconsin, they did a wonderful job at a community level with advanced care planning so that 96% of the residents who died had advanced directives. And the system honored that 99% of the time. And what they did was they cut the cost of care in those last two years of life nearly in half.

[00:08:00] And, you know, it was done at the community scale was about 120,000 people, but built something that was responsive to the values of not only the community, but really the individuals. It varies by person to person. But the catch is those savings should have stayed in that community to reinvest into more well-being. But instead, it went back, like in the Medicare case, back to D.C.

[00:08:25] or into mega carrier run Medicare damage plans. Or you take Alaska, you know, the NUCA system where tribal self-governance plus a unified budget across medical, behavioral, dental, social led to ER visits going down 43%. Admissions, the hospital went down 53%, you know, and they went from the worst health outcomes in America to some of the absolute benefits.

[00:08:54] And really challenging circumstances. Or you look at Orlando, Rose and Hotels, where, you know, within a particular community, in this case an employer, they were able to cut the costs in half. Or really what they did is they just didn't let health care inflation overwhelm, just regular inflation.

[00:09:16] And so savings poured back into their community, both their community of employees with incredible health benefits and paying for college education for their employees and their employees' kids, but also into their community. And what I've talked about in some other episodes in terms of what happened there. And these really aren't four versions of the same politics, you know, it's quite different. You know, in Sweden, it was a county council with Alaska.

[00:09:44] It was a tribal council. There was a rural Ohio community where it was public and private employers. And then it was a Florida hotel company. You know, different every way except two things that really matter. They integrated the funding and had the right size governments. The other thing that keeps showing up is a cooperative model. And there's these emergent types of cooperatives that are very common actually outside the U.S.

[00:10:13] called multi-stakeholder cooperatives or sometimes they're called solidarity or social cooperatives. Where workers, patients, community members share governance. They've worked all over the world. In Italy, multi-stakeholder co-ops serve about 12% of the population or about 7 million people.

[00:10:34] And in Bologna, which is the heart of Emilia, Romania, where it's really present, they provide 85% of the care services for elders, children, and the disabled. In South Korea, Japan, and Quebec, same matter not exist. But the proof I love the most is because it's the most American story I can think of, which was rural electrification. Where a century ago, less than 10% of rural America had electricity.

[00:11:04] The private utilities and serving rural America just was impossible. And maybe through their profit-maximizing lens, they were right. But through a cooperative lens, they were profoundly wrong. So the Canutas just did it themselves. They formed electric cooperatives owned by the people they served. Decisions were kept local. And then the Rural Electrification Act was really a, how do we replicate this and grow this much faster?

[00:11:34] And that happened in the mid-30s. And by the 1950s, you had 90% of rural America had power. And to this day, almost a century later, you have 900 co-ops serving 42 million Americans across 56% of the land mass of the U.S. And the key thing they did was they had loans. And the default rate was under 1%.

[00:12:01] And you're an incredible return on those federal dollars. And here's the part that matters for health care. The federal support, the Rural Electrification Administration in 1935, after communities had already proven the model worked, the government followed the pioneers. It didn't lead them. It amplified what farmers had already built and gave them the scale without taking away local control. And that's the playbook we're looking at for health care right now.

[00:12:30] The pioneers in this book are the farmers lying before anyone in Washington figured it out. Cooperatives are genuinely post-political. Ronald Reagan praised them as people's capitalism. Bernie Sanders praises them as democratic institutions that keep wealth and grow wealth in communities. And, you know, when's the last time you heard those two people agree on anything? Americans already lived this.

[00:12:59] It's cooperatives a lot more present than people realize. You know, the food area, you have land of lakes and ocean spray, state farm, you have credit unions, rural electric cooperatives. We just never really applied the genuine grassroots cooperative model to the biggest extractive industry of them all, health care. And I want to close with a story that makes certain this is a very doable, not radical idea.

[00:13:28] You know, over the course of the Spanish Civil War, there was a young priest named Father José María Arizmendi Arrieta. And he landed in a war-scarred town in the Basque country called Mondragon. Poverty, defeat, living under Franca's dictatorship is about as hostile setting for democratic ownership as you could invent.

[00:13:57] What he did was he started a technical school. Then in the 50s, a tiny worker-owned cooperative. And from that seed grew Mondragon Corporation. It's the largest cooperative complex in the world. And it's one of the largest business groups in Spain. Tens of thousands of worker owners. Cooperative ownership rebuilt this broken town under a fascist regime into a thriving democratic economy.

[00:14:26] One of the most flourishing regions in all of Europe, even through all the economic challenges that have existed in Spain. Now, they're still subject to globalization and they're not guaranteed success. They had a business fail in the last 20 years, but everyone who won a job landed a role. And there was a shared sense of community and some shared sacrifice through that. And most of those landed within the Mondragon family of co-ops.

[00:14:56] Some landed other organizations. So when somebody tells me, you know, American communities reclaiming their own health care is idealistic, I think about Mondragon. If it could be done there under those conditions and then doing it here with all our advantages, that doesn't seem idealistic at all. It's really modest by comparison. So that's what relocalizing health means.

[00:15:20] And the reason I can say it's already happening is I just showed you four places where it has. Plus, we have hundreds of years of cooperatives proving the model in the U.S. So I hope you join us. Hope you read the book. And hope I see you in Nashville. Well, that's the story for today. If it resonated, the new relocalizing health book is going deeper into that. And Nashville goes deeper still.

[00:15:48] So relocalizing health comes out July 29th right at Rosetta Fest. Every attendee will get it. You can preorder a copy now on Amazon. And if you want to be in the room when that happens, get your ticket at rosettafest.org. See you in Nashville.