Enablement companies are key to the future of value-based care
March 16, 2024
The $4.5 trillion US healthcare market is on an unsustainable path, with spending fast outpacing improvement in outcomes.
As a result, the healthcare industry is undergoing a sea change known as value-based care, which focuses on improving holistic patient outcomes while controlling costs.
More precisely, it involves alternative reimbursement models that reward healthcare providers for keeping patients healthy through holistic and preventative care—in contrast to traditional, fee-for-service reimbursement, which rewards providers for providing a higher volume of care.
VBC is transformative—and transformative isn't easy. Pursuing this model requires healthcare providers to fundamentally change the way they operate.
For most physicians, this means practicing medicine the way they have wanted to all along, prioritizing outcomes and centering the labyrinthine healthcare delivery system around the patient rather than the other way around.
But it also means rewriting the playbook on financial incentives, collaboration structures, care pathways, and how technology is used. That is extraordinarily difficult for most healthcare providers to pull off in an environment where many are burned out and struggling for financial sustainability.
There are many ways for investors to align themselves with solutions to this fundamental problem. When we began researching value-based care years ago, we asked the question: What is the model that will allow the value-based care transformation to take successfully and rapidly take root throughout the US healthcare system?
We believe that model is VBC enablement. Companies that are "VBC enablers" help healthcare provider organizations transition from fee-for-service into value-based payment models by providing wraparound technological, administrative, and clinical resources.
It's a capital-light model that comes in many flavors, but fundamentally bridges the gap between where healthcare is today and where it's headed—and does so rapidly, at scale.
In a new note, we unpack why we believe enablement is the most important mechanism by which the VBC transition will play out in the US over the next five to 10 years.
Download the free research here: The Value-Based Care Enabler Landscape
In the past, we've also written about the broader opportunity set for VBC investment, what a successful VBC transition looks like within a nonprofit health system, and how PE is navigating the changing VBC market.
If you're interested in discussing PE and VC investment in value-based care, please feel free to reach out.
As a result, the healthcare industry is undergoing a sea change known as value-based care, which focuses on improving holistic patient outcomes while controlling costs.
More precisely, it involves alternative reimbursement models that reward healthcare providers for keeping patients healthy through holistic and preventative care—in contrast to traditional, fee-for-service reimbursement, which rewards providers for providing a higher volume of care.
VBC is transformative—and transformative isn't easy. Pursuing this model requires healthcare providers to fundamentally change the way they operate.
For most physicians, this means practicing medicine the way they have wanted to all along, prioritizing outcomes and centering the labyrinthine healthcare delivery system around the patient rather than the other way around.
But it also means rewriting the playbook on financial incentives, collaboration structures, care pathways, and how technology is used. That is extraordinarily difficult for most healthcare providers to pull off in an environment where many are burned out and struggling for financial sustainability.
There are many ways for investors to align themselves with solutions to this fundamental problem. When we began researching value-based care years ago, we asked the question: What is the model that will allow the value-based care transformation to take successfully and rapidly take root throughout the US healthcare system?
We believe that model is VBC enablement. Companies that are "VBC enablers" help healthcare provider organizations transition from fee-for-service into value-based payment models by providing wraparound technological, administrative, and clinical resources.
It's a capital-light model that comes in many flavors, but fundamentally bridges the gap between where healthcare is today and where it's headed—and does so rapidly, at scale.
In a new note, we unpack why we believe enablement is the most important mechanism by which the VBC transition will play out in the US over the next five to 10 years.
Download the free research here: The Value-Based Care Enabler Landscape
In the past, we've also written about the broader opportunity set for VBC investment, what a successful VBC transition looks like within a nonprofit health system, and how PE is navigating the changing VBC market.
If you're interested in discussing PE and VC investment in value-based care, please feel free to reach out.
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