Healthcare private equity firms and other backers are homing in on value-based care (VBC) companies as key investment targets, according to Bain & Company’s Global Healthcare Private Equity and M&A Report 2023.
To control spending, providers and payers are collaborating on VBC initiatives in which physicians are financially incentivized to deliver low-cost, quality care versus a higher volume of care services, reports Insider Intelligence.
Providers who only got compensated under a traditional fee-for-service (FFS) payment model suffered revenue losses due to abrupt reductions in patient visits during the pandemic. Investors quickly realized that providers would want greater financial protection against future FFS downturns.
Private capital funding in VBC companies more than quadrupled from 2019-2021, according to a December 2022 McKinsey & Company analysis. Read more.
