The introduction of the phrase “value-based care” into the industry lexicon can be tracked back to 2010 driven by the reforms of the Affordable Care Act. The HMOs of the 1990s weren’t balanced with quality, access, consumerism, nor were they tech enabled, Lumeris reports.
They indeed failed spectacularly but moving back to FFS indefinitely wasn’t the answer either. Lessons learned were applied to the Medicare Advantage modernization aspects of the ACA to align quality, cost and consumerism. The ACA also came with the commitment from the government for continued payment model innovation through the Center for Medicare and Medicaid Innovation (CMMI) which started a new value-based care arms race in the private sector.
There was a lot of experimentation and innovation from 2010-2020 and the sector is now starting to see the promise of value-based care prove itself out with sustainable, value-creating healthcare companies. In fact, CMS has doubled down on the trajectory and commitment of value-based care over FFS with the creation of its most advanced payment model yet, ACO REACH, and with the goal of all Medicare and Medicaid beneficiaries to be in a value-based model by 2030. Value-based care is no longer an experiment, and the equity markets have noticed. Read more.
