Placing Value on Value-Based Care
Posted on September 24, 2025
Key Points
- Value-based care (VBC) challenges the quantity over quality model of healthcare.
- Technology can enable payers to invest and focus on value-based care for improved outcomes and lower costs.
We are a transaction-based society. The more visits, likes, comments, shares, and views that something gets the more value we place on it. In healthcare, it’s no different. The current fee-for-service model incentivizes quantity over quality, instances over importance, and volume over value.
But what if we looked at a patient’s care holistically before assigning its value? Just like a valuable piece of art, an antique or vintage item, or a custom-made product, you should examine it carefully and take a closer look holistically at the care it has received and what maintenance it may require before estimating its value. In healthcare, this is a transformative concept that could challenge more traditional models that rely on antiquated systems. By focusing on patient outcomes and quality of care, providers, payers, and policymakers can rethink incentives for better outcomes. Rather than chasing the highest number, let’s focus on finding the right one.
Reimagining Pharmacy Benefits for Quality, Equity, and Outcomes
What if we redefine what good looks like? With the state of healthcare in our country today— the high costs and disjointed patient experience— are we not compelled to look at the healthcare status quo and say, “What have you done for me lately?”
In the US, we spend more on healthcare than any other developed nation, yet we have higher cases of chronic disease and lower life expectancy. Healthcare spending rose 8.2% in 2024 reaching $5.3 trillion, driven by increases in services like hospital/clinical care and prescription drugs. Our underinvestment in coordinated care leads to increases in ER and urgent care visits, which are more expensive and drive costs up.
A 2021 healthcare report noted that physicians reported 20% of medical care as unnecessary, including 25% of tests and 11% of procedures.
The current fee-for-service (FFS) model encourages overutilization, fragmentation, and rising costs which are often without associated improvements in outcomes. Seventy percent of physicians’ revenue comes from the FFS model, which incentivizes volume over value in care and over the last few decades the number of billable services has tripled, increasing administrative complexity and cost. The consequences of the FFS model are higher healthcare costs for all stakeholders, burnout across providers, inconsistent quality of care, and with little to no coordination, there is an inherent lack of accountability. It is an uneven and frustrating patient journey with gaps that require costly rework.
Value-based healthcare arises as an answer to these shortcomings. Its key components are:
- Measuring Outcomes: effective care based on patient results
- Cost Optimization: create structure that promotes efficiency, waste reduction, and paying for performance
- Integrated Care: provider coordination (PCP, Specialists, Labs) with integrated data
- Patient Empowerment: Including patients in decisions, setting goals, and mapping the journey.
The Role of the Health Plan in Value-Based Care
Conceptually, value-based care (VBC) is widely popular, but operationally it is challenging. There are pockets of Accountable Care Organizations (ACOs), groups of healthcare providers who coordinate care for patients, that are doing it quite well. However, it does require a shift not only in data management and financial arrangements, but also in organizational culture. For example, some ACOs have successfully reduced hospital readmissions by implementing coordinated care programs, but many struggle with aligning incentives and updating legacy IT systems.
Health plans who work with ACOs can better coordinate care and emphasize preventive services, reducing unnecessary spending. In these partnerships, the health plan and the ACO benefit from improved quality and cost-efficiency by ensuring patients are receiving the right care at the right time. This gets to the heart of patient-centered healthcare. Health Plans who see the value in the value-based care model include Blue Cross Blue Shield of North Carolina, Humana, Blue Shield of California and Oscar Health, to name a few.
Importantly, the role of the pharmacist is vital in a VBC model, as the pharmacist moves from simply dispensing medication (transaction based) to being a key member of the coordinated care team, ensuring medication adherence and optimization, participating in the care, and being a trusted advisor to the patient. VBC gives independent pharmacies a greater role in the process, as often it is the pharmacist, particulary in independent and rural pharmacies, that can spend time with a patient.
Implementing Value-Based Healthcare
Transitioning to VBC takes vision and commitment, as it will demand time and resources from every level of the health system to succeed.
Health plans aiming to transition to a VBC model must invest in technology focused on data analytics and interoperability. They should also incentivize preventive care and engage with physician networks and ACOs to address barriers to adoption.
The Role of Technology
Digital tools are fundamental to VBC’s success. Electronic health records, telemedicine, and patient and provider portals facilitate data collection, delivery, analysis, and patient engagement. And there is a role for artificial intelligence, which can identify patterns, predict risks, and personalize interventions, supporting more efficient and effective care.
Payers can engage with emerging technologies that aim to connect the various healthcare touchpoints for patients and providers and reduce administrative burden. There are several healthcare tech companies, (Innovaccer, Inc., Pearl Health, Tebra, and Levrx to name a few) developing technology and software solutions that can easily be leveraged, integrated, and branded by the payer.
We recommend health plans ask their PBM for innovation and technology roadmaps that feature the investments they are making in AI to help you better coordinate care.
The Benefits of Value-Based Care
The promise of VBC goes beyond just the financial savings and can lead to:
- Improved Patient Outcomes: By coordinating care around what matters most, VBC delivers tangible health improvements.
- Cost Containment: Efficient care pathways and a reduction in duplicate or multiple services help contain costs without compromising quality.
- Greater Equity: By standardizing outcome measurement, VBC can highlight disparities, target interventions and support data collection for Social Determinant of Health initiatives.
- Professional Satisfaction: Clinicians across the VBC ecosystem can see the impact of their work on patients’ lives. This leads to greater job fulfillment and reduced burnout.
The Bold Choice
Value-based healthcare represents a bold reimagining of health systems, calling all stakeholders to prioritize outcomes and efficiency over mere transactions. The journey is complex, but the momentum is clear. By embracing the principles of VBC (outcome measurement, integrated care, patient engagement, and payment reform) health systems can deliver higher quality care, control costs, and forge a future where the healthy outcome truly has value.
Health Plans must design and align for the desired behavior. And while there are many examples of VBC today, (pharmaceutical value-based contracting, pharmacists embedded in care teams, pharmacies providing MTM) are our health plans doing enough to design systems that reward the right behavior? Or are they distracted by volume-based promises?
Health plans and PBMs who are willing to walk the walk on lowering overall costs and total person health are in a position to lead a greater movement toward value-based care. The key to success will be in synthesizing data, measuring outcomes, and creating transparency for every participant in the journey, from physician to pharmacy to patient.
As they say, it takes teamwork to make the dream work.
