Survey reveals most providers expect VBC revenue to increase this year

Most providers expect their value-based care (VBC) revenue to increase this year, even as finances remain the leading obstacle to their value adoption, according to a new survey.

Results from a survey by Innovaccer and the National Association of ACOs (NAACOS) of 168 hospitals, accountable care organizations (ACOs), Federally Qualify Health Centers (FQHCs), clinically integrated networks (CINs) and specialty care providers included:

• 64% expect higher VBC-driven revenue in 2025 compared to 2024
• 87% cite financial risk as the top barrier to adoption
• 20%+ get over half of their revenue from fully capitated or downside risk

“Value care, as much as there is a lot of rhetoric and perspectives on both sides of it, the data clearly suggests that it’s continuing to move forward, albeit at a slower rate than proponents would like,” said Brian Silverstein, MD, chief population health officer of Innovaccer. “But, nonetheless, it is pretty consistently moving forward.”

Hospital challenge

Broadly, hospitals and health systems have lagged other providers in VBC adoption. For instance less than 1% of revenue for rated hospitals and health systems in 2023 came from risk-based payment, according to a Moody’s Rating report (subscription required).  

Silverstein said hospital-based ACOs have struggled more financially than non-hospital ACOs for reasons that include a lack of the right personnel and technology.

“You need more than an EHR; they’re necessary but insufficient,” Silverstein.

Organizations focused on VBC, such as ChenMed, One Medical and Oak Street Health, all use proprietary provider work systems that are not EHRs but connect to an EHR.

 “They create workflow systems that make it easier to manage in these risk-based contracts,” Silverstein said.

EHRs ensure appropriate documentation to allow organizations to bill for full revenue but are “woefully inadequate” for managing a patient’s total cost of care and manage an entire population, he said.

“Organizations that are really trying to do this, they’ve built their own systems to make it easier to do it and that’s why they’re successful,” Silverstein said. “If I’m a health system and I am using an EHR, it’s a lot harder to make these things work.”

Such organizations are among the best financial performers in VBC, he said.

One of the advantages of such systems over EHRs is that they allow providers to create a unified patient record of all care the patient received, whether or not it’s from the same organization. Such arrangements require individual agreements to share data across all providers treating patients in the VBC model.

That approach allows providers in VBC models to overcome data sharing barriers common in healthcare. Seventy-five percent of survey respondents identified lack of data interoperability as a barrier and slowing adoption of VBC.

Federal rules generally require interoperability but, in practice, many interoperability barriers remain. For instance, federal rules do not bar EHR vendors from charging access fees for pulling data out of them.

Policy effects

The survey followed a drumbeat or negative findings on VBC, including an April report of 18 federal VBC models that concluded they drove a net increase of $7.7 billion in federal spending. At the same time, the Trump administration looks to overhaul the federal VBC approach, which includes requiring “all models to have downside financial risk and require providers to assume some of the financial risk, not just entirely conveners.”

“There’s no question that many of these programs have not produced returns,” Silverstein said.

Such results are driven by program costs, complexity and conflicts on patient attribution, he said. Additionally, the longstanding CMS approach of trying many different models to see what would work has detracted from the programs that are successful, such as the core Medicare Shared Savings Program.

“What I see [the Trump administration] saying is ‘Hey, this type of care makes sense, so we want more of it. But when we look at the programs we’re currently doing, not all of them make sense,’” Silverstein said. “That’s a very prudent and reasonable position.”

Mandating downside risk also may help drive better VBP results, he said, because organizations tend to perform better if they face more downside risk.

“If there’s not a downside and the upside is smaller, I’m not making that investment,” Silverstein said. “If the downside is real and there’s an upside, too, that’s going to spur me to make that investment. While that may not be popular with hospitals, ultimately it is a prudent decision.”