From Volume to Value: The Value-Based Care Shift in Healthcare
📌 This article is part of my "5 Healthcare Trends to Watch and Act On" series.
In this series, I’m breaking down five key healthcare trends shaping 2025—why they matter, how they’re impacting the industry, and what healthcare leaders should do next.
💡 Explore the Full Series:
🏠 Overview: 5 Healthcare Trends to Watch and Act On
1️⃣ Trend 1: Data Security Becomes a Competitive Advantage
2️⃣ Trend 2: Data Interoperability Becomes the Backbone of Healthcare
3️⃣ Trend 3: Advanced Risk Stratification and Predictive Analytics
4️⃣ Trend 4: Addressing Health Equity Through Social Determinants of Health
5️⃣ Trend 5: Value-Based Care (VBC) Drives Innovation (You’re here)
The U.S. healthcare system still rewards volume over value, driving inefficiencies, avoidable hospitalizations, and unsustainable costs. Value-based care has been positioned as the solution for years, but slow execution and misaligned incentives continue to stall progress. The real question isn’t whether VBC is the future; rather, can the industry move from theory to execution before financial and operational pressures make the choice for them?
One of the biggest proving grounds for value-based care is Medicare Advantage. While CMS’s proposed 2.23% boost to benchmark payments for 2026 (a $2.2 billion increase) might seem like good news, it highlights a critical challenge. Insurers are set to benefit from the funding, but providers are asking: Will they see a meaningful share of these dollars? Misalignment between payors and providers risks slowing progress, as value-based care depends on all stakeholders working toward shared financial and clinical goals. Without stronger alignment, competing interests will continue to stall meaningful change.
The latest funding decision also reflects a growing reality: healthcare must deliver more with less. Insurers must balance rising demand with declining margins. Providers are expected to drive better outcomes while navigating outdated fee-for-service constraints. The gap between reimbursement and execution is widening, and value-based care is the only viable bridge.
Value-based care is emerging as the framework to bridge this gap, but success requires more than shifting reimbursement structures. It demands operational execution at every level. Data must flow freely across payors, providers, and members to create a true 360-degree view of patient health. Care coordination must improve to prevent unnecessary hospitalizations and ensure proactive interventions. Payment models must align incentives in a way that encourages long-term health improvements rather than short-term cost reductions. Technology is critical but not enough on its own. Without seamless integration into workflows, even the best analytics will sit unused.
The real winners in value-based care will be those who operationalize it effectively. Health plans that structure contracts to reward outcomes rather than utilization will lead the shift. Vendors that enable seamless collaboration between payors and providers will become indispensable. Investors who back companies that make VBC work at scale, rather than those chasing regulatory dollars, will see the strongest returns.
Health Plans
Health plans that treat value-based care as a core strategy, not a side pilot project, will set the industry standard. Success depends on rethinking provider partnerships, restructuring contracts to reward outcomes, and embedding proactive care models into their networks. The plans that build these foundations now will define the future of healthcare.
To stay ahead, health plans should:
Redesign risk-sharing agreements to reward sustained patient health improvements over short-term cost savings. Structure incentives around total cost of care, chronic disease management, and patient adherence metrics, not just procedural volume reductions.
Redefine provider relationships by creating engagement models that provide real-time performance data, care coordination support, and streamlined administrative processes.
Deploy predictive analytics to anticipate member needs, reduce unnecessary costs, and target high-risk populations with early interventions.
Plans that effectively integrate value-based principles will improve member retention, enhance outcomes, and control costs while staying ahead of competitors already moving in this direction.
Health Tech Vendors
Health tech vendors are essential to making value-based care work at scale. Technology must do more than store and share data. Vendor solutions should simplify workflows, support clinical decisions, and improve care coordination. Those that enable providers and health plans to close care gaps and manage risk will be the ones driving real progress in value-based care.
To stand out, vendors should:
Embed AI-driven decision support into clinician workflows to surface interventions at the moment of care, rather than adding another layer of dashboards that go unused.
Develop frictionless integrations that minimize provider burden, automatically fitting into existing workflows rather than requiring costly customization.
Offer hands-on change management that includes ongoing education, workflow optimization, and real-time support to ensure adoption and impact.
Technology alone won’t fix value-based care. Vendors that pair smart solutions with real-world execution will be the ones that create lasting impact.
Private Equity & Venture Capital
Investors looking to capitalize on the shift to value-based care should focus on companies that can scale operational execution and drive measurable financial and clinical outcomes.
To maximize value, investors should:
Prioritize platforms that close the execution gap, offering solutions that integrate risk stratification, real-time analytics, and care coordination.
Fund companies that align financial incentives with actual outcomes rather than participating in value-based programs solely for compliance.
Leverage M&A strategically to build end-to-end solutions, integrating disparate capabilities into comprehensive, high-impact offerings.
The firms that succeed will back companies that turn value-based care from a policy initiative into a competitive advantage.
Providers
Value-based care changes both how providers are paid and how they deliver care. Moving away from fee-for-service requires more than contract adjustments. Success depends on proactive care models, streamlined workflows, and operational improvements.
To thrive in value-based care, providers should:
Redesign care delivery by prioritizing team-based care, integrating behavioral health services, and expanding virtual care options to reduce hospital visits.
Improve EMR utilization to streamline care gap identification, automate documentation workflows, and enhance reimbursement accuracy.
Invest in patient engagement tools that support chronic disease management, remote monitoring, and self-care programs, reducing readmissions and improving long-term outcomes.
This shift reclaims the core of modern medicine. A system built on prevention, coordination, and patient-centered care allows providers to achieve better outcomes while practicing in ways that are more fulfilling and sustainable.
Members
Value-based care depends on engaged and proactive members. Taking an active role in health leads to better outcomes and helps create a more effective and affordable healthcare system.
To get the most from value-based care, members should:
Maintain a healthy lifestyle with regular exercise, balanced nutrition, and proper sleep to support long-term well-being.
Stay on top of preventive care by scheduling annual check-ups, keeping up with vaccinations, and following recommended screenings.
Take an active role in their healthcare by asking questions, weighing treatment options, and working with providers to make informed decisions.
When members engage in their health, they get better care at a lower cost while making the system more efficient for everyone.
The Road Ahead
The healthcare leaders who execute now will set the standard for the next decade. Health plans must move from passive adoption to active execution by funding pilots, restructuring contracts, and strengthening provider alignment. Vendors need to deliver real interoperability, workflow integration, and performance-backed insights instead of leaning on buzzwords. Investors should back companies that successfully implement value-based care by aligning financial incentives with patient outcomes, not those that simply rebrand existing models to fit the trend. Providers must build the infrastructure to operate effectively in value-based models, from EMR optimization to real-time care coordination.
The future of healthcare will be shaped by those who put value-based care into practice. Let’s keep moving forward.
🔥 If you liked what you’ve read, there’s more where that came from.
This article is part of my "5 Healthcare Trends to Watch and Act On" series, where I break down the biggest shifts shaping 2025. If you want to see all five trends at a glance and dive into the ones that matter most to you, check out the full overview here.
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