How to Actually Execute Value-Based Care

By Matt Phillion

Value-based care (VBC) has continued to shift from aspiration to expectation. But as it does, many organizations are facing a familiar problem: they have a vision of where they want to go, but don’t have the infrastructure to get there.

“We’re starting to get it right, but the problem has been that fee-for-service is a foundationally perverse incentive,” says David Snow, CEO of Cedar Gate. “It doesn’t serve the patient well, it doesn’t serve the economy well, and it’s incredibly wasteful. We need to fix that.”

This has been the case for a long time, Snow explains. But what has prevented us from moving away from fee-for-service (FFS) in healthcare?

“I call the movement away from fee-for-service to value-based care crossing the chasm of death,” he says. “Stepping off of the perceived solid ground of a fee-for-service world is like walking across a rickety bridge, because of the steep learning curve to get to the other side fully immersed in value-based care. Many get halfway across that bridge, doing partial VBC and partial FFS, but feel insecure in the decision. They ultimately run back to where they feel safe, which only delays progress.”

Getting halfway across that proverbial bridge isn’t enough, Snow goes on.

“You can’t do partial fee-for-service and partial value-based care forever. They’re fundamentally different, and the effect becomes schizophrenic. What organizations really need is a pathway to learn how to manage value-based care, with the technologies that support them and give them the insights they need to be successful,” he says. “That’s been missing, and it’s getting better. We’re part of that solution.”

Looking beyond the technological needs, the other part of the challenge is that until recently moving to value-based care has been voluntary for most participants, Snow notes.

“That’s starting to change. CMS has introduced a new bundles program, mandating that about 750 hospitals participate in bundled reimbursements for various types of surgeries beginning in 2026 and continuing for five years,” says Snow. “There’s no choice: you do it or you don’t get paid.”

CMS is doing more to move the playing field toward value-based models.

“They’re increasing payments for value-based care, but not increasing the fee-for-service, so that reimbursement is going to get skinnier and skinnier,” he says.

Providers have a lot to deal with right now, Snow notes, and the current cuts to Medicaid are pretty terrifying, but this shift in the bread-and-butter formula for reimbursements being weighted toward value-based care means they have to make changes.

“We’re seeing an uptick in these mandates and financial levers are being applied,” says Snow. “You’re out on that rickety bridge and the government is setting fire to the other side. You’ve got to move forward.”

A change long coming

We’ve seen big shifts in reimbursement over the decades, Snow says. But the technology has finally evolved to the point where the data needed to succeed in these changes exists.

“In the past, getting payers and providers the deep analytics to understand what they could be doing to improve care or outcomes was impossible,” says Snow. “It was like asking a pilot to fly a plane with a blindfold on. Flash forward, and we have all this powerful capability to deliver insights to drive better outcomes at lower costs.”

The challenge, however, is that while the technology is here, it has traditionally been scattered across multiple point solutions and vendors. Cedar Gate works to bring all of those needs together in one place.

“There are many things you are responsible for and need to do to achieve value-based care goals, and historically you needed multiple solutions or models—for medication management, for population health analytics, for delivery system analytics, capitation administration—all of these different things involved different contracts,” says Snow. “It’s not unusual to have committed to five or six different point solutions for value-based care.”

This opens up a different sort of challenge, and additional risks, he explains.

“If I give the same data to five or six different vendors, and I need something from each of them based on that same underlying data, I’m paying to onboard the same data, to homogenize it, enrich it, store it and make it available for queries,” he says.

A single source of truth integrating all that data makes for a better experience and better results, Snow says.

“If you give your data to all these vendors with different needs, but you ask the same questions, you’re going to get five or six different answers, because they ingest and enrich the data differently,” he says.

This can erode the trust of the clinicians you need to work with this data, he explains.

“Providers and payers need to trust each other to achieve value-based care goals, and when the numbers don’t tick and tie, providers feel frustrated because it’s unclear how they can achieve the metrics they are being measured against,” Snow says.

And then there’s the security aspect of it.

“When you give your HIPAA-protected data to five or six different vendors, you’re exponentially increasing your risk versus giving it to one vendor,” Snow says. “We’ve solved for that. We can handle all forms of data on the same platform, so every time you mature and are ready to take on a new value-based care contract or model you are not taking on a new level of risk.”

Overcoming that lack of trust

The thing that is lacking across all parties in healthcare, Snow says, is trust.

“We have seen a lot of examples of organizations that take advantage of value-based models, trying to find ways to game the system,” he says. “For example, CMS risk adjustment. It encouraged a perverse incentive for upcoding—giving the patient a more severe diagnosis that would lead to higher reimbursement. When CMS saw this happening, they adjusted the parameters, and that cratered payments while everyone had to adjust to the new rules. It’s these changes that get people. The rules change because people are gaming the system. We have to get it right and stop creating perverse incentives for how we pay people. That has always been the root cause of things not aligning for better outcomes at better costs.”

Another challenge is the sheer volume of data.

“Data is foundational, but data is useless unless it can be turned into actionable insights,” says Snow.

You can spend millions, even billions, on building an EMR system but if it doesn’t bring the right data to you, it creates holes in your ability to care for the patient.

“You need a way, and we do this, to bring the data onboard, homogenize it, stitch it to each individual member so you can do analytics across the entire spectrum, have a full view of the patient, and identify real gaps in care.”

Automation and AI can play a part in this, Snow says.

“We’re not pretending to be doctors. We’re making the data more and more powerful and easier to use,” he says.

Cedar Gate recently used their AI to look at a large member population to surface patients who had not yet been diagnosed with type-2 diabetes but who were likely to be diagnosed in the next 12 months. Based on analytics and claims data, they were able to correctly predict 83% of the patients who were diagnosed in that timeframe.

“Having those insights can make a material difference in patient outcomes, in the cost and quality of care, when applying those things to a chronic disease,” says Snow. “In a fee-for-service model, if you apply this information and intervene to prevent early onset diabetes, you lose money because fee for service rewards sick care, where value-based care rewards you for better outcomes, for keeping them out of the hospital.”

To get there, the people who hold the purse strings need to see the value in this sort of shift, Snow notes. That includes the federal government, CMS, states and Medicaid, commercial payers, and self-insured employers taking full responsibility for their employees and their families. When the people paying for care fundamentally shift the way they reimburse care, everyone in the system can innovate to find ways to succeed in the new models.

Snow notes that it’s possible to get to 80% value-based care by 2030 and this would have a meaningful impact on the industry.

“I’ve been tilting at this windmill since 1980,” he says. “We were passionate and had a noble cause, but we need to evolve to that next mode of care. It’s a heavy lift, but there’s no question in my mind we need to get there.”

Matt Phillion is a freelance writer covering healthcare, cybersecurity, and more. He can be reached at matthew.phillion@gmail.com.