Value-based care has reached an inflection point. Rewarding physicians for keeping their patients healthy — not just treating them when they’re sick — has become an inevitability. 

“For a long time, those of us who’ve been in this area were just kind of waiting for it to happen,” says Matthew Perreault, a partner with McDermott Will & Emery. “We’re there. It’s occurred. It’s not an if, it’s a when.” 

The McDermott law firm hosted a pair of conferences in Nashville, including an inaugural Value-Based Care Symposium, to highlight what investors see ahead. The healthcare system is undergoing a fundamental transition to prioritizing prevention and wellness over strictly fee-for-service medicine.  

By 2030, Medicare plans to have the "vast majority” of patients in a value-based arrangement, likely resulting in 10-15% annual growth. Physicians will be increasingly held accountable for both the cost and quality of the care they provide. Some changes may eventually be mandated by government programs, says Rick Goddard, vice president of commercialization and strategy for Lumeris. 

And as Medicare goes, the rest of the healthcare system — including commercially insured patients — will follow.  

"It’s really important not to be flat-footed,” Goddard says. “More could be coming, so it’s important to practice and now is a good time to get started.” 

Returning to Profitability 

Many primary care providers watched their revenue vanish during the initial COVID lockdown periods, threatening the viability of many practices. Physicians who were already in value-based or capitation contracts were able to better ride out the downturn, says Devin Carty*, CEO of Martin Ventures and Wellvana co-founder. 

Some practices and health systems still haven’t returned to their pre-pandemic profitability, largely because of elevated labor costs. So traditional fee-for-service remains under pressure. 

“A pivot to value-based for any provider is...probably the only way to get back to where they were,” says Karey Witty*, Managing Director of Valtruis, a WCAS company. 

But value-based care isn’t a switch to be flipped. It’s a complete re-thinking of how to provide primary care and stepping in as the “quarterback” for every patient’s care, taking a more hands-on role in hospital discharges and specialist visits. 

To date, many companies who offer value-based care enablement have relied too heavily on coding, Witty says, rather than focusing on the more challenging work of improving the clinical care provided to patients.  

‘Patients Have to Win’ 

“What we’ve found is it's incredibly challenging to change physician behavior,” says Lauren Brueggen, partner of Heritage Group, which invested in Wellvana alongside Valtruis and Memorial Hermann Health System as part of an $84 million capital raise. 

Doctors need a partner in value-based care that provides additional services including remote care management and patient coordination. Brueggen says providers need any help they can get to take some of the workflow changes off of them. 

“They can continue to practice medicine the way they are used to and have that partner that supports them in value-based care but is doing a lot of that work on their behalf,” Brueggen says.  

But that supportive work to reduce the cost of care — through avoiding redundant testing and unnecessary hospitalizations — can't come at the expense of patient care.  

In fact, as Wellvana CEO Kyle Wailes* says, the patient’s health must be the top priority as the transition to value-based care picks up speed. 

“Patients have to win or it’s not value-based care." 

*Members of the Wellvana Board of Directors.