America's health care system is trapped between two massive trends that will shape lives for decades to come: failing models with rising costs, and the potential for incredible scientific breakthroughs.

Why it matters: The tension between these trends will animate business decisions, trillions of dollars in investment and policy challenges faced by governments.

Bad news first: The health care system is breaking.

• Old business models no longer work, can't adapt to the evolution of care or are on a collision course with federal budget limitations. New models replacing them are increasingly criticized as harmful to patients.
• Migration patterns and demographics are creating workforce and access issues that seem nearly impossible to solve. Diverging life expectancies are redefining the experiences of America's haves and have-nots.
• The U.S. is facing a snowballing drug epidemic. Untreated mental illness is testing the patience and compassion of even the most progressive cities.
• Amid all this, the cost of care continues to rise, putting it out of reach for more and more people.

Yet the good news is startling: Scientific breakthroughs are creating a world of new medical possibilities.

• Society is on the cusp of replacing medicines that treat symptoms of illness with those that, as one investment bank put it recently, "essentially rebuild the biology of the patient."
• Cures for genetic diseases that could recently only be managed are coming to market. Individually tailored treatments are becoming more common. Vaccines could soon be available for things like cancer or addiction.
• Treatments for diseases like Alzheimer's and obesity are becoming newly available or much more effective.

The catch: This innovation comes at a cost. One of the most ominous questions facing the sector today is how all of this new innovation can be absorbed — financially and logistically — by a system that wasn't designed for it and is already breaking under its own weight.

The bottom line: This newsletter will pull back the curtain on big-picture trends and probe the daily decision-making that will define the health care system of the future.

• Here's how we'll approach it ...

Among the topics that will regularly drive our reporting:

• The new era of health insurance. Health insurers have become bigger than ever while rising out-of-pocket costs erode the value of coverage.
• The hospital squeeze. Hospital care has never been more expensive, yet the business model is threatened.
• Breakthrough drugs. Society may be on the cusp of a new era of medicine. But existing payment models aren't built to absorb it.
• The health care casino. Patients' experience with the health care system is increasingly dependent on where you live and what coverage you have.
• The gray trap. The aging population is creating profound problems, including the availability and affordability of long-term care.
• The mental health crisis. Americans' mental health is worsening without great solutions.
• The drug epidemic. 100,000+ Americans are dying annually from drug overdoses.
• Labor strife. A shortage of health care workers is expected to grow, setting up conflict with employers.
• Tech fusion. New and emerging technology has the potential to accelerate new treatments and improve care, while deepening existing inequities or raising costs.
• Haves vs. have-nots. The wealthy have access to more sophisticated and precise care. The disadvantaged are falling further behind.

Let's start by digging deeper on some good news .... 👇

An ambitious, relatively new form of cancer treatment that involves genetically reengineering a patients' own cells to fight disease is showing early promise against autoimmune conditions.

Why it matters: If the promise of CAR-T for diseases, including multiple sclerosis or lupus, pans out through clinical trials, millions of patients facing long-term disease management could instead have hope for a cure.

It's part of a new era of medicines that aim to replace a lifetime of treatment with one-and-done therapies that eliminate disease. A handful have already come to market.

• A 15-patient study, published in the New England Journal of Medicine in February, on the use of a CAR-T infusion against three different autoimmune disorders found that the treatment was "feasible, safe, and efficacious."

How it works: The CAR T process for drugs already on the market begins with a patient's own immune cells being removed from the body and then genetically altered in a lab to fight cancer cells.

• After they are given time to grow and multiply, the cells are infused back into the patient, who sometimes receives chemotherapy as preparation. The process takes weeks, must be done by experienced providers and requires close post-treatment monitoring, potentially in the hospital.

Reality check: CAR-Ts are generally used for cancer patients who are running out of options, as they can have severe side effects. That could well end up being the case with CAR-Ts for autoimmune diseases as well.

• Cancer CAR-Ts have recently been flagged for safety concerns. The FDA in January required safety alerts on the products' labels over an increased risk for patients developing secondary cancers, signaling to both patients and clinicians the treatments' serious risk. Even so, FDA advisers in March voted to expand their use in blood cancer.
• The treatment is also expensive, creates complicated reimbursement issues and can be tough for patients to access.
• As always for drugs under development, there's a chance all the hype could still result in failed clinical trials.

A key part of covering the transformation of health care will be talking to the leaders who are helping make it happen. First on the list is Kyverna Therapeutics CEO Peter Maag. We chatted over Zoom recently.

• Why he matters: As we just said, CAR-T is showing promise for treating autoimmune disease. Kyverna has been cleared by the FDA to start two Phase 2 clinical trials of treatments for myasthenia gravis, an autoimmune disorder characterized by muscle weakness, and multiple sclerosis.

Q: What's transformative about what you are working on?

A: These chronically ill patients, they are continuously withering away ... by resetting the immune system, you have that promise that ... basically you start afresh in your immune system and you're not continuously triggering autoimmune disease.

I'm not using the word "cure." But long-term remission is the promise that this therapy is providing to patients.

Q: A trend transforming health care that we're not paying enough attention to?

A: Changing providers and payers every 18 months. ... You really need to think long term.

Q: Biggest challenge health care faces?

A: The U.S. health care system is very procedure-based. So you can bill for a procedure, and you get paid. And you will get rewarded if it works well. But we're really not managing health over a long period of time.

Q: Biggest opportunity?

A: Artificial intelligence and then genetic engineering ... are two profound technologies that will change the next generation's approach and how we're thinking about disease, how we're thinking about working with each other.

Q: Biggest wild card?

A: The speed that regulatory bodies and reimbursement decisions are supporting these new modalities and technologies. ... We want to reward innovation, but we want to reward innovation adequately. And I think we're struggling with this in terms of setting the right incentive systems in place.

Q: Favorite piece of technology that you own?

A: It's probably my lifeline iPhone. ... And if you ask my wife, she probably would love to throw it away.

1 fun prediction: Tell us something about health care in 5-10 years.

A: You won't have a physician typing while you get their advice. I'm sure that there will be a lot more human interaction in the medical field, enabled by technology. ... Clinicians will be much more like a navigator pilot-type role, or consultant role.