Value-Based Care as Integrated Care

These arrangements differ from the more common ‘fee-for-service’ model, in which the insurer is billed for each service rendered by the provider. Under this arrangement, the insurer is the one bearing nearly all financial risk.

As with anything, there are some downsides to value-based care. First, because the financial risk is shifting from the insurer to the provider, the provider needs to be compensated for taking on that risk, meaning they might need to charge higher rates overall. Risk-bearing is a core strength for insurance companies; they’re good at measuring risk ... See more

Value based care is a way that insurers agree to compensate providers for their services, in which the provider takes on some financial risk, and receives some financial upside in return.

This is not to say that fully vertical systems are a panacea: they of course have their own drawbacks. For one, they limit patient choices (because your insurance dictates a narrow range of providers that you can see). However, value-based care contracts that create only a partial alignment between payers with providers contain many of the same dra... See more

The second downside is that, because providers are now incentivized to provide care more cheaply, they may under-treat patients, or recommend against necessary treatments.