Harvard Business Review

Turning Value-Based Health Care into a Real Business Model

By Laura S. Kaiser and Thomas H. Lee, MD 

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ARTICLE SUMMARY

"In short, we see a compelling business case for acting now to achieve value-based care without worrying about when the market will make the shift."

The shift from volume-based to value-based health care is inevitable. Although that trend is happening slowly in some communities, payers are increasingly basing reimbursements on the quality of care provided, not just the number and type of procedures. But because most providers’ business models still depend on fee-for-service revenues, reducing volume (and increasing value) cuts into short-term profits. How, then, are innovative providers redesigning care so that, despite financial pain in the short term, they achieve long-range success?