Before the term ‘value-based care’ became common in U.S. healthcare, there was a push to reform a system focused on volume over outcomes. Despite years of effort, the transition remains challenging. It’s often unclear when experimentation ends and a new payment system begins.
The Centers for Medicare & Medicaid Services (CMS) is promoting accountable care arrangements that hold providers accountable for quality and cost. During a recent webinar, Krista Nelson, CEO of Optum Health, emphasized this direction. She stated that CMS aims for all Medicare beneficiaries to have access to value-based care, beyond Medicare Advantage.
CMS’s value-based programs are part of a larger shift from paying based on care quantity to rewarding quality. By 2026, physicians in Advanced Alternative Payment Models will receive higher Medicare fee updates than those who don’t participate. CMS is expanding this approach, moving beneficiaries toward accountable care arrangements with downside financial risk. In 2027, changes are proposed to increase participation in accountable care organizations and shift from traditional reporting to meaningful value-based pathways.
In 2026, over 700,000 providers and organizations will engage in Medicare accountable care initiatives. For healthcare leaders, the key question is how to respond as the value-based model evolves. Nelson, CEO of one of the largest physician organizations, discussed this during her appearance in the webinar.
Optum, part of UnitedHealth Group, embodies value-based care across various healthcare settings. Nelson notes differences in performance across markets due to varying patient populations and payer relationships. In Houston, Optum Health achieves a 15-30% cost reduction compared to other providers, coupled with high patient satisfaction and low provider attrition.
Nelson describes the ‘quadruple aim’ of improving quality, lowering costs, and enhancing the experience for patients and clinicians. A 2018 study linked the Medicare Shared Savings Program with spending reductions, although results varied by organization type. Another study found upfront investments in accountable care led to lower Medicare spending.
Scaling value-based care means overcoming the issue of scalability. Nelson highlights CMS’s initiatives, like the Medicare Shared Savings Program and upcoming LEAD Model, as steps to create durable pathways for accountable care.
Organizations face rising medical costs that challenge the sustainability of value-based models. Nelson cites the industry pressure from regulatory changes and rising costs. Errors in cost trends, like those by UnitedHealth Group, exacerbate these challenges.
Recent research questions the optimistic assessments of Medicare’s programs. Nevertheless, the industry remains committed to value-based care. However, financial risks and administrative complexities pose challenges. The industry is moving forward, despite lacking a definitive success metric or timeline.
Nelson concludes that value-based care hasn’t failed; instead, it needs continuous adaptation to modernize and deliver necessary patient care.