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This report provides a definitive analysis for venture capital (VC) investment in the value-based care (VBC) healthtech sector. While VBC represents a profound and necessary paradigm shift with a multi-trillion-dollar market opportunity, it is not an environment for unsophisticated capital. The core finding is a qualified “yes”: venture capital should strategically back VBC healthtech, but only by targeting specific business models and deploying patient capital with a deep understanding of the unique operational, regulatory, and financial risks.
The market is propelled by a macroeconomic imperative to curb escalating costs and is strongly incentivized by top-down regulatory mandates from entities like CMS. However, startups face structural hurdles, including fragmented data ecosystems, notoriously long sales cycles, and resistance from entrenched stakeholders. Case studies of both successful exits (Oak Street Health, Signify Health) and spectacular failures (Cano Health, CareMax) confirm that the nature of the capital is as critical as the business model. The most promising opportunities lie in scalable “enabler” technologies and specialized “single slice” solutions that reduce administrative friction and empower providers to manage risk effectively.
The shift to value-based care is not a passing trend but a fundamental reorientation of the U.S. healthcare system, moving from a volume-driven model to one centered on patient outcomes and cost-efficiency. The sheer scale of this transition presents a monumental opportunity. In 2024, the U.S. value-based healthcare service market was valued at an impressive $4.01 to $4.15 trillion. This is not a nascent market; it is a massive, established sector undergoing a profound transformation. Projections indicate a significant and sustained growth trajectory, with a Compound Annual Growth Rate (CAGR) of 7.2% to 7.5% over the next decade, with the market expected to reach up to $8.55 trillion by 2034.
This sustained, decade-long growth forecast signals an irreversible and strategic direction for the entire healthcare ecosystem. Analyzing the market segments provides a clearer picture of where the momentum is concentrated. The Medicare and Medicare Advantage segments are the most mature, holding the largest revenue share at 48.48% in 2024. This is a critical point, as it shows that the most active and proven market for VBC innovation is tied directly to federal programs.