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Medicare, Medicaid and private insurance are increasingly encouraging health care practices to participate in value-based care models such as Managed Care Organizations, Accountable Care Organizations and Medicare Advantage. The industry’s perspective is that paying some providers prospectively based on outcomes – rather than retrospectively based on each service provided – tends to better support patient health and reduce overall excess spend for insurers.
That’s one reason why the global value-based health care market, worth $12.2 billion in 2023, is predicted to grow to $43.4 billion by 2031 – compound annual growth of 14.6%, according to a report by market research firm Coherent Market Insights. Another report from McKinsey says that companies engaged in value-based care created around $500 billion in enterprise value in 2022, and that could rise to $1 trillion by 2027.