Value-based care has had a bad rap in recent years with a litany of not-so-great news:
- Companies like Cano Health and CareMax declaring Chapter 11 bankruptcy (though Cano has since remerged as a standalone entity);
- Payers either selling off their entire Medicare Advantage businesses like Cigna, or retrenching to various degrees like Humana, CVS Aetna, Elevance Health and UnitedHealthcare;
- CMS announcing the termination of the Value-Based Insurance Design Model because of “unmitigable costs to the Medicare Trust Funds”;
- MedPAC reporting in June 2026 that this year they project, “Medicare will spend 14 percent — a projected $76 billion — more for MA enrollees than it would spend if those beneficiaries were enrolled in FFS (fee-for-service) Medicare”;
- And of course, endless stories of fraud regarding MA plans abound, very often tied to up coding.
But should the fate of VBC be tied to a handful of overambitious MA companies and fraudulent behavior? Plenty of other reasons — different quality metrics for judging providers, lack of real savings across the board, low provider participation — exist to declare that value-based care hasn’t really worked and move on.
And yet neither CMS nor companies in the VBC market, nor some practicing physicians, are ready to do that. CMS didn’t use the term value-based care in announcing a new model that went into effect this year — ACCESS. But through ACCESS, the agency is testing what it is calling “Outcome-Aligned Payments.” In other words, VBC. In fact, even private payers are following CMS’s lead, pledging to create models similar to ACCESS for their own commercial populations by January 1, 2028. And on Nov 4, CMS announced its final 2027 physician fee schedule for the Medicare Shared Savings program (MSSP), where it noted that it was “finalizing a growth adjustment to the historical benchmark to reward ACOs” to recruit new providers, those who are new to VBC.
Now the MSSP has had success — it saved more than $2.1 billion in 2023, the largest savings in its history — but it’s just one program. So, the question is, why are we not abandoning VBC if the benefits are not being felt broadly?
“What’s our alternative?” retorted Samir Batra, a Silicon Valley venture capitalist and managing partner at HIP, in a recent episode of MedCity News’ Debunked.
The alternative of course, is universal healthcare aka Medicare-for-All. Come January, the Senate will have more members who favor Medicare-for-All than ever before. But for right now, even with a historic Republican wipeout in the midterms, it seems foolish to predict that Medicare-For-All will become a reality in the near future.
So in the meantime, we have VBC, and many will likely agree that while VBC hasn’t succeeded, it hasn’t exactly failed either.
“I don’t think in theory value-based care has been a failure,” Batra said. “I think VBC has been a failure of execution. We ended up over-indexing on growth over care, risk nobody understood and the biggest thing — the incentives did not line up.”
In Batra’s words, value-based care is not dead, rather “it’s in rehab.”
OK, so what models do work if the fast and furious MA model has had challenges? For answers, it made sense to talk to practitioners of VBC — both physicians and their tech enablers.
This is part 1, where I visit a Bay Area primary care practice and talk to an independent physician to see VBC in action.
“My boss is the patient relationship“
For the past 17 years, Dr. S. Barrett Tilley, a gregarious family medicine physician in Fremont, California, has been seeing patients at a practice that he runs alongside his physician wife and his father-in-law, who is a gastroenterologist and sees patients part-time. His mother-in-law saw patients until she was forced to retire three years ago and passed away in March. In an extended interview, Dr. Tilley explained that VBC tools allow him to continue doing what he loves: spending time with patients and developing a trusted relationship. He believes these tools and services are saving primary care.
Dr. Tilley has been part of Accountable Care Organizations (ACOs) that failed, but for the past four years he has partnered with Aledade, the VBC-enablement company that works with independent primary care physicians to improve outcomes and reduce costs. His practice — Medical Associates of Fremont — is part of the Hill Physicians 2023 Enhanced Track ACO, which includes a total of 40 area practices. The ACO participates in the MSSP, and Tilley’s practice has performed well on outcomes measures, seen increasing revenue and received a share of the ACO’S savings from the MSSP.
“Aledade’s really giving us the exact important information: who is due for that wellness visit, who needs to get in after [a] hospital [admission], who isn’t hitting their blood pressure goals,” Dr. Tilley explains. “It’s simple and one page, and then you get over, and you see your patients that are due, and it really … simplifies it. If [Aledade has] seen a high blood pressure code come in from another provider, because blood pressure codes go into their system, it alerts that [a patient] had a high blood pressure in the hospital or at a cardiologist visit, and it lets us see who may need to be seen.”
It’s the insight that was missing in the past and that created bad outcomes, Dr. Tilley says. But aside from the tech enablement, Aledade dedicates human resources to patient care, which leads to the VBC programs being successful.
“They also have a lot of people behind the scenes,” he explained, “We have somebody meeting with one of my staff members online once a week.”
And it’s not just staff who are in touch with Aledade employees weekly. Once a month Dr. Tilley checks in with them too.
“The physician, I am meeting, it gets a little meeting-heavy, but I’m doing a formal meeting for an hour once a month, and that’s where we go over the numbers,” he explained. “On those meetings, they’re showing my office name at 98% success on [controlling] blood pressure. They show us how good we’re doing on hospital readmissions.”
The practice has roughly 10,000 patients, and around 539 are senior patients who are currently being monitored via Aledade under MSSP. One of them is James Gentry, who is waiting to be seen. Before going into the visit, Dr. Tilley rattles off whatever data Aledade’s app is telling him about his patient.
“So it gives me his data, and he hasn’t been in this year, so it wants us to confirm his HCC (Hierarchical Condition Category) code, which is his most valuable code, and we’ll do that,” he said. “It shows me he’s seen a cardiologist this year, he’s seen a dermatologist, and then he’s due for his physical, he’s due for at least the discussion of colorectal cancer, kidney function, he’s due for his flu shot, and then it shows … he’s super healthy, so it’s not showing that much.”
And then we go see Gentry, a smiling, golf-playing 80-year-old who has been seeing Dr. Tilley for 17 years, though he thinks it’s been more than 25. [Dr. Tilley asks permission from each of his patients so that I am allowed to be in the room for the visit or hear an online conversation.]
Here’s a snippet of their interaction.
The trust is visible as is the camaraderie between doctor and patient — they tease each other about their favorite football teams.
The visit ends with Gentry asking to be seen twice a year instead of only once, and Dr. Tilley agreeing to do so.
Back in his office, I ask him how running an independent practice works given the trend has been towards physicians being employed by large health systems.
“How does value-based care even work, and how do we survive as an independent practice versus letting Kaiser or, more like, Stanford buy a practice like this?” he asks rhetorically. “My boss is the patient relationship. My boss is that drive to get good outcomes for my own patients. Nobody tells me what to do.”
Another, more complex patient arrives – Carol Weaver-Madison, who has cancer, though not in active treatment. Aledade’s app had pinged Tilley’s front office to alert the practice that she had been released from the hospital after an ER visit, where she was diagnosed with sepsis, a sometimes fatal infection. She was already in to see Tilley for a “transition of care” visit the week before, but she is in for a follow-up visit because Tilley wants to make sure she is recovering OK from her harrowing experience. She contracted the infection after a biopsy of her esophagus, a rare occurrence.
Again, without Aledade, Tilley would not have known that she was in the ER.
Tilley declined to say how much more revenue plus shared savings the practice has been garnering as a result of the partnership with Aledade. But it’s enough to make him happy.
“[Through Aledade] you’re bringing in all the patients that might not have been seen, you’re also getting better follow-up. And so, that — without any shared savings — drove our revenue up. And it was a significant number, just getting those patients in,” he says. “And then when you look at how the shared savings programs work, the shared savings comes on top of that. There’s no risk. Aledade takes whatever risk there is.”
While Aledade does take the risk, it’s payout is also significant — 50% of the ACO’s savings. The remaining 50% is shared by the practices in that ACO. But that hefty Aledade share doesn’t bother Dr. Tilley.
“It’s worth it,” he declares. “It’s revenue that I otherwise would not have had. We have zero downside because of Aledade. I’m really more of a front-line person where the health care is getting done — but these programs are important to me because I strongly feel we need to save primary care.”
“VBC is a scam”
Not all agree that saving primary care or improving the nation’s healthcare system necessarily means emphasizing value-based care. In fact, a California physician who said he had practiced VBC early in his career had especially harsh words for it. Responding to an email query, he said:
“VBC gives this illusion that it’s pro-patient, when it’s actually the opposite. VBC, to me, is a scam. It’s absurd, the metrics are unreasonable…. ,” said Dr. Raymond Douglas, an oculoplastic surgeon in Beverly Hills, California. “A model that rewards (gives more money) to a physician when their patient gets a little worse and punishes when they turn out healthy is a broken model, especially when the only way a physician can win (or earn decent money) is to game the system. That kind of structure doesn’t really encourage better care whatsoever.”
Ok, so if not VBC what then?
“Frankly, the number of people working in healthcare (and insurance, of course) nowadays that aren’t even remotely involved in providing actual care is staggering. It really says a lot about the state of our system, which, at this point, is becoming more and more like a business model,” Dr. Douglas said. “I know a lot of people are going to be out of jobs, but I feel that removing these layers would free up resources that could otherwise be going into providing more care to patients. The solution seems simple to me, and what’s even better is that it’s nothing new: Universal Healthcare.”
There’s greater political will today for the healthcare regime that Dr. Douglas is recommending but time will tell whether a wholesale change of our healthcare will indeed occur.
Meanwhile, a physician-turned-consultant/entrepreneur feels that the question of VBC or FFS — itself is a “false dichotomy.” Andrew Schutzbank, founder and CEO, Schutzworks, based in Cambridge, Massachusetts believes that AI can help identify value such that fee-for-service ends up paying for only the things that provide the better outcomes for patients and lowers costs overall.
“Now that we have access to new qualitative analytic capabilities in the form of LLMs, we can finally figure out what is valuable and therefore, what to pay for, collapsing fee-for-service and value-based care into one construct,” he declared.
Part 2 will delve into tech enablement companies like Aledade and its competitors, and why they believe VBC is so important in the continued transformation of the healthcare industry.
