What's Happening?
A report from Sage Growth Partners reveals that while only 20% of healthcare executives believe there has been recent progress in value-based care (VBC), 77% plan to increase their participation in these
models over the next two years. This shift is seen as essential for long-term financial survival despite current operational hurdles and low revenue exposure. The report indicates a strategic pivot towards risk-based models, with significant increases in Accountable Care Organization (ACO) and bundled payment participation. The survey of 101 hospital and health system executives highlights a disconnect between the industry's sentiment and strategic investment in VBC.
Why It's Important?
The move towards value-based care represents a significant shift in the healthcare industry, aiming to improve patient outcomes while controlling costs. This transition is crucial as hospitals face macroeconomic pressures and evolving payer dynamics. The increased participation in VBC models could lead to more efficient healthcare delivery and better alignment of financial incentives with patient care. However, the slow movement of the 'revenue at risk' needle suggests that operational complexities remain a barrier. The healthcare industry must address these challenges to fully realize the benefits of VBC.
What's Next?
Hospitals and health systems are expected to continue expanding their involvement in VBC models, with a focus on ACOs and bundled payments. This expansion will require significant operational adjustments and investments in health technology to manage risk-based contracts effectively. The healthcare industry may see increased collaboration with tech companies to bridge the gap between strategic intent and financial reality. As hospitals navigate this transition, the success of VBC models will depend on their ability to balance innovation with operational efficiency.
