March 10, 2023 3 min read

The Centers for Medicare and Medicaid Services (CMS) set a goal in 2021 to have 100% of Original Medicare beneficiaries and most Medicaid beneficiaries in value-based care (VBC) relationships by 2030. These risk-based care models, where measuring patient outcomes and resource utilization are used to determine provider reimbursement, are designed to encourage proactive care, better population health, and reduced spending across the healthcare spectrum.

But with only seven years to go until the deadline set by the CMS Innovation Center, the steady progress toward VBC adoption has slowed to a standstill, hovering around 60% of all payment models since 2018, with the remaining 40% comprised of traditional fee for service (FFS). While payers are eager to implement alternative payment models, some providers are reluctant to abandon the FFS model that always has worked for them. 

Familiarity with FFS, however, is not the only obstacle to VBC adoption. “Administrative complexity within the value-based payment ecosystem is still a significant barrier,” writes consulting firm RTI Health Advance. “Support services and technologies will be needed to realize progress to greater levels of risk and reward.”

The Value-based Administration solution

VBC networks consist of multiple stakeholders that may include hospitals and physician groups, payers, accountable care organizations (ACOs), clinically integrated networks, social service networks and community-based organizations (CBOs). Thus, successful implementation of value-based programs requires complex hierarchy support for onboarding, data capture, digitization, and exchange. In addition, these technologies must support social determinants of health (SDoH) and facilitate value-based payments, quality reporting and other use cases. 

The architectural framework and processes that support VBC networks is called value-based administration (VBA). Within VBC networks are many-to-many relationships in which an entity in one network may be engaged in several networks under various contractual engagements with other entities. Such a “network of networks” can work only with an infrastructure that supports the hierarchies between these entities. That is the role of VBA.

As you can see in the matrix, VBA helps stakeholders across the healthcare continuum – providers, payers, patients, and CBOs – solve problems that prevent organizations from taking part in a VBC network while also providing measurable clinical and operational benefits.

Transforming healthcare infrastructure 

Unfortunately, most healthcare organizations lack the digital infrastructure necessary for VBA. “We can’t graft a new digital, platform-based healthcare system onto healthcare infrastructure designed to support traditional operations and care models,” writes Mayo Clinic President and CEO Gianrico Farrugia in an article for the World Economic Forum. “Healthcare needs transformation. And to truly transform healthcare, we must simultaneously build physical and digital frameworks to meet the evolving needs of patients worldwide.”

The good news is that healthcare organizations can implement VBA without resorting to a costly rip-and-replace strategy. Doing so requires a platform infrastructure to integrate the data layers seamlessly, then extend that data layer either as a DaaS or as a PaaS (Platform as a Service) so that partner firms or clients can use existing applications served up via microservices or extend/create microservices and business applications for their own needs.  

What’s needed for VBA to work?

Providers seeking to fully leverage relationships in a VBC network must ensure they are able to: 

  1. Implement a robust cloud-based data infrastructure to allow real-time clinical decision-making, information sharing, and analytics
  2. Realign downstream reimbursement to include both medical and non-medical providers (behavioral health services, drug treatment centers, etc.)
  3. Incorporate SDoH resources and partners, such as CBOs
  4. Create a dashboard view into real-time performance against all contracts 

An integral part of effective VBA data infrastructure is artificial intelligence (AI) and other intelligent technologies, such as machine learning, natural language processing, deep learning and cognitive computing tools, robotics and computer vision. These technologies glean information and insights from the voluminous data collected and shared across the VBC network. Once a robust data infrastructure is in place, a set of secure and scalable cloud-based microservices – on which different applications and integrations are built – can be deployed.  


Despite the structural and technological barriers impeding VBC adoption, many large healthcare organizations are working with technology partners such as Pearl Health, Signify Health, HSBlox and Lumeris to improve patient outcomes and reduce healthcare costs. Applying VBA to VBC initiatives will allow healthcare organizations to fulfill the promise of patient-centered, value-based healthcare.