Value-Based Care: The Only Sustainable Future for Healthcare
Time to Adapt or Die (Quite Literally)
Here we are, well into 2025, and the U.S. healthcare system is still in complete dysfunction. Costs are out of control, access is still a mess, and despite a decade of technological advancement, patients are stuck navigating a system that prioritizes billing codes over actual health outcomes.
I wrote this article back in 2022 when I believed we were moving in the right direction: Embracing Value-Based Healthcare: A Solution to America's Healthcare Inequities, and yet, here we are, still debating the merits of VBC like it’s some radical idea rather than the only viable path forward. Three years later, I’ve come to a blunt conclusion: the healthcare ecosystem, and many of the players in it, aren’t just resistant to change, they’re complacent, shortsighted, and, to put it bluntly, lazy. The problem isn’t a lack of solutions. It’s a lack of will.
The industry clings to a broken fee-for-service (FFS) model that incentivizes more procedures, tests, and hospital stays rather than prevention, holistic care, and cost control. Meanwhile, healthcare inequities persist, rural and underserved populations are left behind, and chronic conditions continue to drain resources.
Value-based care (VBC) isn’t just an alternative model, it’s the only viable path forward. And yet, adoption remains sluggish, largely because those who profit from the status quo don’t want to change. But here’s the reality: if we don’t move toward VBC at scale, we will continue to see growing disparities, declining quality, and unsustainable healthcare costs.
TL;DR
Value-based care (VBC) is the only way forward. Aligning incentives around prevention, outcomes, and cost reduction isn’t just ideal, it’s necessary.
Who’s doing it right? Organizations like Henry Ford Health, Ochsner, Sanford, Agilon, ChenMed, Privia, Cityblock, and Carelon are proving that proactive, patient-centered care works.
So why isn’t VBC mainstream? Complacency, misaligned incentives, and resistance to change keep the industry stuck in outdated models.
The next evolution: Expect a shift from condition-specific virtual care (2025-2026) to hybrid, polychronic models (2027-2028) that blend in-home, digital, and in-person care.
AI can be a game-changer, but only if done ethically. Bias-free, explainable AI can help organizations manage risk, personalize care, and drive equity.
Bottom line: VBC isn’t optional, it’s inevitable. Those who invest in real patient-first transformation now will be the ones that last.
The Fee-for-Service Model is Unsustainable
The current system rewards volume, not outcomes. Every test, scan, procedure, and office visit generates revenue, whether or not it improves patient health. The result?
Overutilization of care in some areas, leading to unnecessary procedures and defensive medicine.
Underutilization in others, particularly in preventive care, behavioral health, and addressing social determinants of health.
A system that prioritizes treating sickness rather than keeping people healthy.
Patients are left navigating a fragmented system where providers don’t communicate, incentives don’t align, and their overall well-being is an afterthought.
Meanwhile, costs are exploding:
The U.S. spends nearly $4.5 trillion annually on healthcare, yet outcomes remain among the worst in developed nations.
Employer-sponsored insurance premiums have risen 47 percent over the last decade.
Medicare and Medicaid spending continue to balloon, driven largely by poorly managed chronic conditions.
If we don’t shift the focus to coordinated, preventive, and patient-centered care, these costs will only continue to rise, while leaving millions without access to the care they need.
Who’s Doing Value-Based Care Right?
Some organizations have embraced VBC and are proving it works:
Agilon Health: Partners with independent primary care groups, taking on full financial risk while supporting physicians with data-driven insights, care coordination, and financial incentives to improve patient outcomes and lower costs.
ChenMed: Focuses on Medicare Advantage patients, delivering high-touch, preventative primary care with frequent patient visits, transportation support, and concierge-style services to reduce hospitalizations and improve senior health.
Privia Health: Assists providers in transitioning to value-based contracts at their own pace, offering technology infrastructure, analytics, and physician-led governance models to drive financial and clinical success in both private and public payer arrangements.
Cityblock Health: Targets underserved, high-risk populations, integrating social determinants of health by providing housing support, behavioral health services, and community-based care teams to reduce ER visits and drive better long-term health outcomes.
Carelon Health: Pioneered chronic disease management programs, utilizing team-based care, home visits, and remote monitoring to proactively manage conditions like diabetes and heart disease, significantly lowering preventable hospitalizations and healthcare costs.
Henry Ford Health: Leveraging value-based care by integrating population health strategies, focusing on preventive care and chronic disease management to reduce hospitalizations and improve patient outcomes.
Ochsner Health: Built a strong risk-based, capitated payment model, emphasizing care coordination, remote patient monitoring, and digital health innovations to drive better outcomes and lower costs.
Sanford Health: Prioritizing rural healthcare access by embedding VBC principles into primary care, leveraging telehealth and community-based programs to manage chronic conditions and reduce unnecessary ER visits.
These organizations share a few key traits:
They take on risk. No half-measures. Real risk-sharing drives better incentives.
They focus on high-touch, preventive care. Keeping patients well is the priority.
They integrate social and behavioral health. Healthcare isn’t just medical, it’s economic, social, and environmental.
They embrace interoperability. Without seamless data sharing, VBC can’t scale.
Why Hasn’t Value-Based Care Been Adopted More Broadly?
Despite its promise, VBC still hasn’t seen widespread adoption in the U.S. The reasons?
Incumbents Don’t Want to Change
Hospitals make more money on readmissions than prevention. Until incentives shift, sick care will remain the priority. Payers are hesitant to take on full risk. Many still operate in fee-for-service environments, leading to half-baked "value-based" models that don’t truly change incentives.
Transitioning is Hard
Most providers aren’t trained in managing risk or population health. Data is siloed, without full interoperability, coordinating care across providers is a challenge. Change takes investment, and many systems aren’t ready to make the leap.
Patient Engagement is Underdeveloped
For VBC to succeed, patients must be active participants, but many lack the resources or support to engage in their own health. Social determinants like food insecurity, housing instability, and transportation access have a direct impact on outcomes. Ignoring these factors undermines the effectiveness of VBC. This isn’t about selectively applying what benefits the bottom line today; it’s about transforming the entire ecosystem. And if done right, long-term financial strength will follow.
The Future: What’s Next for Value-Based Care?
VBC will continue to evolve, and we’re starting to see the next wave of care models take shape.
Condition-Specific Virtual Care (2025-2026)
Venture capitalists are currently betting on digital health companies focused on single-condition virtual care models, including:
Lyra Health (mental health)
Hinge Health (musculoskeletal care)
Spring Health (behavioral health)
Omada Health (diabetes and chronic disease management)
Maven Health (women’s health)
These companies have seen explosive growth, largely by selling directly to employers. But here’s the catch, they don’t address the whole patient. While convenient and scalable, single-condition models can create care silos, leaving gaps for polychronic patients who require longitudinal, integrated care.
The Shift to Hybrid & In-Home Care (2027-2028)
The next evolution will focus on polychronic patients, the 5 percent of the population that drives nearly 50 percent of healthcare costs. This means:
Hybrid virtual and in-home models that blend telehealth, remote monitoring, and physical visits.
Comprehensive, whole-person care that integrates behavioral health and social determinants.
Stronger alignment between payers, providers, and patients to drive better engagement.
Managing polychronic conditions effectively is the key to bending the cost curve.
Why We Need to Move Toward Value-Based Care, Now
If we don’t embrace VBC, we will continue to see:
Healthcare inequities persist, with the most vulnerable populations remaining underserved.
Access remains limited, particularly for rural and low-income communities.
Personalization suffers, as patients continue to be treated as transactions rather than individuals.
Costs spiral further, making healthcare even more unsustainable for employers, payers, and individuals.
But if we commit to value-based models, we can build a healthcare system that:
Prioritizes prevention over intervention.
Reduces costs while improving quality.
Aligns incentives for payers, providers, and patients.
Delivers more equitable, accessible, and personalized care.
The Role of Ethical, Non-Biased AI in Advancing Value-Based Care
Artificial intelligence (AI) has the potential to be a game-changer in VBC, but only if it is implemented ethically and without bias. The success of VBC depends on accurate risk stratification, personalized patient engagement, and predictive insights that help providers manage populations proactively. AI can accelerate these efforts, but bad data, biased algorithms, and black-box decision-making can just as easily derail them.
To make AI a true enabler of VBC, organizations must focus on fair, explainable, and patient-centered AI strategies that support better outcomes without reinforcing disparities.
Where AI Can Transform Value-Based Care
Risk Stratification Without Bias
AI models can help identify high-risk patients before they escalate into costly, acute conditions.
However, many risk models have historically been built on biased datasets that underestimate the risk of marginalized groups. Ethical AI must incorporate social determinants of health (SDOH) and diverse datasets to ensure accurate risk prediction across all populations.
Personalized Patient Engagement
AI-powered tools can tailor interventions based on patient behavior, preferences, and communication styles, improving medication adherence, appointment attendance, and lifestyle changes.
Chatbots and virtual health assistants must be designed to eliminate bias in language models so that they provide equitable guidance to all patients, not just those who fit historical care patterns.
Automating Administrative Burdens for Providers
Many providers resist VBC because documentation, coding, and quality reporting requirements are overwhelming. AI can streamline these tasks through natural language processing (NLP) and real-time clinical decision support, allowing providers to focus on patient care rather than paperwork.
AI-driven automation must be transparent and auditable to prevent unintended errors in billing or quality reporting that could disproportionately affect certain patient populations.
Predictive Analytics for Proactive Care
AI can analyze EHR data, wearable health metrics, and claims history to predict which patients are at risk for hospital readmissions, worsening chronic conditions, or medication non-adherence.
Ethical AI models must not over-prioritize high-cost patients at the expense of preventive care for lower-risk individuals, balancing long-term health equity with short-term cost savings.
Reducing Bias in Clinical Decision Support
Historically, AI-driven diagnostic tools have shown bias, often misdiagnosing conditions in women, racial minorities, and underserved populations due to lack of representative training data.
AI tools must undergo rigorous bias testing, continuous auditing, and human oversight to ensure that care recommendations reflect real-world patient diversity and do not reinforce existing disparities.
Implementing AI in a Responsible, Patient-First Manner
For AI to truly support value-based care, organizations must adopt a transparent, ethical AI strategy that prioritizes:
Data Diversity & Representation: AI models should be trained on diverse patient populations, integrating SDOH to prevent biased risk assessment.
Explainability & Trust: Providers and patients need to understand why AI makes certain recommendations rather than relying on opaque, black-box algorithms.
Regulatory Compliance: AI solutions must align with HIPAA, GDPR, and emerging AI governance frameworks to ensure privacy and ethical deployment.
Human-AI Collaboration: AI should support, not replace, clinical decision-making, ensuring final authority remains with medical professionals who understand the patient context.
When implemented correctly, AI can be a powerful ally in advancing value-based care, helping organizations manage risk, personalize patient care, and improve health equity without reinforcing the biases that have plagued healthcare for decades. The future of VBC isn’t just about cost savings, it’s about ensuring that every patient gets the right care at the right time, with the right support.
The time for half-measures and capricious boardroom chats are over. VBC isn’t an option, it’s a necessity. Those who embrace it now will shape the future of healthcare. Those who resist will be left behind. The market will shift again. But the players who invest in real, patient-first transformation today will be the ones that last when the dust settles.