The state of value-based care in 2025: Growth and challenges

Despite its potential benefits, healthcare organizations face several challenges in implementing VBC:

1. Perception of financial risk: One of the primary concerns is the perception of financial risk. Many providers are hesitant to adopt VBC due to fears of financial losses. However, data indicates that providers are more likely to break even or make money than to lose money, suggesting that the perceived risk may be overstated.
2. Integration of specialty, subspecialty and procedural care: Integrating specialty and procedural care into VBC models is another significant challenge, and one of the key elements of making these contracts sustainable over time. Specialty care is often tied to traditional fee-for-service reimbursement, making it difficult to align incentives and ensure that all aspects of care are managed effectively.
3. Visibility into patient needs: There is a need for better visibility into patient needs and longitudinal care management. Healthcare organizations must have robust data-sharing agreements, data systems and analytics capabilities to track patient outcomes and manage care over time.
4. Regulatory and administrative uncertainties: Regulatory and administrative uncertainties, particularly in Medicare Advantage, have created trepidation among providers. These uncertainties have led some organizations to shift their focus to commercial risk despite the high churn rate in this population.

Despite these challenges, several organizations have successfully integrated VBC into their core operations. Here are some key strategies:

1. Alignment with core mission: Successful organizations treat VBC as a central part of their operations, create enterprise-wide accountability and align it with their core values. It is a center-of-the-desk issue — not a side-of-the-desk activity — for committed VBC providers. For example, Advocate Health has made its operations department equally accountable for VBC, ensuring that VBC is integrated into all aspects of its operations.
2. Dedicated business unit: Having a dedicated business unit responsible for VBC is another key strategy. This ensures consistent focus and accountability, allowing organizations to manage VBC initiatives effectively.
3. Commitment to community health: Organizations like UNC Health have framed VBC as part of its commitment to cutting-edge care and improving community health. This approach helps in gaining the support of stakeholders and aligning VBC with the broader mission of the organization.
4. Robust data systems: Investing in robust data systems and analytics capabilities is crucial for managing VBC effectively. These systems provide the visibility needed to track patient outcomes, identify opportunities for care interventions and performance improvement, and manage care over time, ensuring that VBC initiatives are data-driven, evidence-based and focused on continual improvement.

Advocate Health and UNC Health serve as models for successful VBC implementation. Advocate Health has made its operations department equally accountable for VBC, ensuring that VBC is integrated into all aspects of its operations. UNC Health, on the other hand, has framed VBC as part of its commitment to cutting-edge care and improving community health, integrating VBC with its broader mission.

To overcome the challenges of implementing VBC, healthcare organizations should:

1. Address financial risk perceptions: Educate providers and stakeholders about the data showing that VBC is financially viable, helping to alleviate concerns about financial risk.
2. Integrate specialty care: Develop strategies to integrate specialty and procedural care into VBC models, ensuring that all aspects of care are managed effectively.
3. Invest in data systems: Invest in robust data systems and analytics capabilities to track patient outcomes and manage care over time.
4. Navigate regulatory uncertainties: Stay informed about regulatory changes and develop strategies to navigate uncertainties, particularly in Medicare Advantage.
5. Foster a culture of continuous improvement: Treating VBC as an ongoing process rather than a one-time initiative.

By following these recommendations, healthcare organizations can successfully implement VBC and realize its potential benefits, ultimately leading to improved patient care and operational efficiency.