Value-Based Payment
& Insight

Moving from traditional fee-for-service arrangements to value-based care—which emphasizes early intervention and ongoing patient engagement—offers a variety of benefits for health plans, providers, and patients.

VBC’s focus on preventive care helps reduce the likelihood of hospitalizations or the development of avoidable comorbid conditions, enabling better care outcomes and improving satisfaction and engagement for patients/members. This approach, coupled with more effective and patient-centered care coordination, helps minimize unnecessary expenses and reduces care costs across the healthcare spectrum.

Although CMS has set a goal of transitioning all Medicare beneficiaries and “the vast majority of Medicaid beneficiaries” to value-based care by 2030, many healthcare organizations have been slow to make the transition for a few key reasons:

• Poor transparency between providers and health plans
• Ineffective (or nonexistent) contract management systems
• Confusing or unclear quality and performance metrics
• Fragmented and siloed patient information

Under the traditional fee-for-service (FFS) model, healthcare providers are financially incentivized to maximize visit volume—often at the expense of delivering more comprehensive care.

APMs reward providers based on the quality—not the quantity—of the care they deliver, empowering providers to take a more patient-focused approach that prioritizes preventive care and early intervention and supports better long-term health outcomes.

Though there are a variety of different APMs, some models have gained more widespread adoption than others. The most common APMs in use in healthcare include:

• Capitation – Providers are paid a set fee per patient over a predefined time period
• Pay for Performance (P4P) – Payments are tied to quality and efficiency performance measures
• Bundled Payments/Episodes of Care – A single payment encompassing all care associated with a specific treatment or condition
• Shared Savings – Incentivizes providers to reduce care costs by offering them a share of the costs saved