Healthcare Leaders Are Overlooking the Key to Value-Based Care Success: Physician-Level Measurement

By Jeanne Cohen

Value-based care (VBC) was supposed to be the revolution that transformed American healthcare. For nearly two decades, policymakers, payers, and providers have promoted its potential to cut waste, bend the cost curve, and align incentives with better patient outcomes. Yet despite billions of dollars in investment and countless pilot programs, the results have been underwhelming. Costs remain stubbornly high, waste persists, and patients are not consistently better off.

Why? Because the first decade of VBC has largely been consumed by a structural shift: replacing the fee-for-service payment system with capitation, the business and economic foundation of value-based models. The assumption seemed simple: Physicians and hospitals at the locus of utilization management, with capitation as the payment model, would naturally drive them to limit unnecessary care, reduce costly referrals, and manage chronic conditions more effectively. In practice, however, that assumption has proven incomplete.

The reality is that while VBC has generated innovative care models and some limited success—particularly in primary care and especially within accountable care organizations—the progress has been uneven and insufficient. In any change management program, measurement is crucial, and the first phase of VBC has not meaningfully incorporated actionable, physician-attributable measurement. Instead, it has leaned on traditional quality metrics, which often bear little correlation to cost, and broad population health measures, which are not actionable at the level where care is actually delivered.

Inside every VBC model, it is physician decisions—what test to order, which referral to make, how aggressively to manage a chronic condition—that ultimately determine both cost and quality. By failing to evaluate and manage these decisions directly, the system has missed one of its most powerful levers for change.

The industry has become fixated with dashboards, star ratings, and population averages, which may look good on PowerPoint slides but hide the real story. Group-level metrics tell us nothing about who is actually driving outcomes. They overlook the reality, obscuring the fact that the single most critical determinant of cost and quality in healthcare is the physician’s decision in the exam room, at the bedside, or in the operating room.

Until we measure performance at that level—where care is actually delivered—value-based care will continue to be elusive.

This kind of performance evaluation isn’t about punishing doctors. It’s about providing them the only thing that truly motivates behavior changes: Clear, transparent data tied to evidence. When you tell a physician, “Your practice is costing patients and the system because you’re still ordering a test that guidelines no longer support,” you create an opportunity for change. When you lump that physician’s decisions into a group average, the signal gets lost in the noise. Everyone nods at the dashboard, and nothing changes.

The consequences are significant. Healthcare waste is estimated to exceed $400 billion annually. We know where much of it comes from: overuse of low-value care, underuse of prevention, and outdated protocols that should have been abandoned years ago.

Consider radiation therapy, for example.

Evidence from trusted medical society sources such as the American Society for Radiation Oncology, has long shown that a three-week regimen can be just as effective as five weeks for certain cancers. Yet in many markets, the longer and more expensive regimen remains the default. Patients suffer unnecessary inconvenience, potential harmful side effects, and their portion of the cost, with payers absorbing the bulk of the inflated costs. Without physician-level measurement that exposes this gap, the practice persists unchallenged.

Physicians are not blind to the flaws in today’s systems. In fact, many distrust performance ratings precisely because they come from opaque, “black box” algorithms that spit out scores with little explanation. Their cynicism is well-deserved. If the goal is to change behavior, the solution is not more black boxes and opaque metrics. It is transparent, evidence-based analytics that link decisions to outcomes in ways physicians can see, audit, and believe. When that happens, doctors engage. They compete. They improve. And systemwide progress follows.

The promise of value-based care is real. However, it will remain a mirage as long as we keep staring at averages and aggregates.

Healthcare leaders must stop pretending that population metrics are enough. The future depends on measuring physicians individually, credibly, and openly. Only then will we gain the clarity—and the courage—to tackle waste, reduce variation, and finally deliver on the promise of better outcomes at lower cost.

Jeanne Cohen is CEO and Founder of Motive Medical Intelligence, a leading healthcare data and analytics company advancing physician-level performance and improvements in value-based care.