U.S. Value-based Healthcare Service Market – By Models (Accountable Care Organization, Patient-Centered Medical Home, Pay for Performance, Bundled Payments), Deployment Mode (Cloud, On-premises), End-use (Providers, Payers) & Forecast, 2024 – 2032

U.S. Value-Based Healthcare Service Market Size

U.S. Value-Based Healthcare Service Market was valued at USD 3.6 trillion in 2023 and is anticipated to witness growth at a CAGR of 6.2% over the forecast period. The market is witnessing significant growth, driven by the shift towards improving patient outcomes while reducing healthcare costs. One of the key trends is the adoption of advanced healthcare technologies, such as telemedicine, electronic health records (EHRs), and data analytics, which facilitate better patient management and care coordination.
 

Another prominent trend is the increasing focus on patient-centered care models. Initiatives like patient-reported outcomes measures (PROMs) are gaining traction, allowing healthcare providers to tailor treatments based on patient feedback and preferences. For instance, the Centers for Medicare & Medicaid Services (CMS) in the U.S. has been instrumental in promoting value-based care through programs like the Medicare Shared Savings Program (MSSP) and the Hospital Readmissions Reduction Program (HRRP). These programs incentivize healthcare providers to reduce readmissions and improve care quality.
 

Furthermore, there is a growing emphasis on population health management, where healthcare providers focus on preventive care and chronic disease management for specific patient populations. According to a study published by Health Affairs, value-based care models have resulted in a 5.6% reduction in hospitalizations and a 9% reduction in emergency department visits, highlighting their impact on improving patient outcomes.
 

Value-based healthcare service is a healthcare delivery model where providers, including hospitals and physicians, are paid based on patient health outcomes. This approach focuses on the quality of care provided, rewarding providers for efficiency and effectiveness rather than the volume of services delivered.
 

U.S. Value-based Healthcare Service Market Trends

Increasing healthcare costs are a significant driver for the U.S. value-based healthcare service industry, as stakeholders seek sustainable solutions to manage expenses while enhancing patient care. In 2021, U.S. healthcare spending reached approximately $4.3 trillion, representing 18.8% of the nation's GDP, according to the Centers for Medicare & Medicaid Services (CMS). This surge in costs underscores the urgent need for more efficient healthcare delivery models, prompting a shift from fee-for-service to value-based care.
 

• Value-based healthcare aims to reduce expenditures by focusing on quality over quantity, encouraging preventive care, chronic disease management, and patient-centered approaches. For example, the Medicare Shared Savings Program (MSSP), a cornerstone of value-based care, reported that accountable care organizations (ACOs) generated $1.9 billion in total net savings to Medicare in 2021. This program incentivizes ACOs to meet quality and cost benchmarks, illustrating the potential for value-based models to curb rising healthcare costs.
   
• Telehealth and remote patient monitoring have also gained traction as cost-saving measures within value-based care. The COVID-19 pandemic accelerated the adoption of these technologies, with telehealth visits increasing by 63-fold. These technologies enable continuous patient monitoring and timely interventions, reducing hospital admissions and emergency room visits, thus lowering overall healthcare costs.
   
• Furthermore, data analytics and artificial intelligence (AI) play critical roles in the value-based care landscape. By leveraging big data, healthcare providers can identify high-risk patients, predict disease progression, and personalize treatment plans. For instance, a study published in Health Affairs in 2021 highlighted those predictive analytics reduced hospitalizations for patients with chronic diseases by 15%, translating to significant cost savings.
   
• The rise in healthcare costs has prompted payers and providers to embrace value-based care models as a viable solution. By focusing on outcome-driven practices and leveraging technological advancements, value-based healthcare aims to deliver high-quality care while containing costs, ensuring a more sustainable and patient-centric healthcare system in the U.S. As these models continue to evolve, they are expected to play an increasingly vital role in addressing the financial challenges faced by the U.S. healthcare system.

U.S. Value-based Healthcare Service Market Analysis

The U.S. market by models is divided into accountable care organization, patient-centered medical home, bundled payments, pay for performance, and shared savings. The accountable care organization segment dominates the market with a revenue of around USD 1.3 trillion in 2023.
 

• A major trend is the increasing adoption and expansion of ACOs across the U.S., supported by federal initiatives such as the Medicare Shared Savings Program (MSSP). In 2023, the MSSP reported that ACOs generated $1.9 billion in total net savings to Medicare, highlighting their impact on cost reduction. Additionally, there is a growing emphasis on using advanced data analytics and health IT systems to improve care coordination and patient outcomes. For example, predictive analytics and artificial intelligence (AI) are being leveraged to identify high-risk patients and tailor interventions, resulting in more personalized and efficient care.
   
• Another significant trend is the shift towards more sophisticated value-based contracting models. ACOs are increasingly engaging in downside risk arrangements, where they are financially accountable for any losses, not just for shared savings. This trend encourages even greater efficiency and commitment to high-quality care. The Blue Cross Blue Shield Association reported that ACOs involved in downside risk contracts saw a 6% reduction in healthcare spending compared to those in upside-only arrangements.
   

U.S. value-based healthcare service market by deployment mode is bifurcated into cloud and on-premises. The cloud segment dominated the market with a revenue of around USD 2 trillion in 2023.
 

• The increasing adoption of cloud-based solutions due to their cost-effectiveness and flexibility. Cloud platforms eliminate the need for extensive on-premises infrastructure, reducing capital expenditures and allowing healthcare providers to scale resources according to demand.
   
• Another trend is the integration of advanced analytics and artificial intelligence (AI) within cloud platforms, which facilitates improved data management and clinical decision-making. For instance, cloud-based analytics can aggregate and analyze large volumes of patient data to identify trends, predict outcomes, and personalize treatment plans.
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• Security and compliance are also significant trends in the cloud segment. With stringent regulations like HIPAA in the U.S., cloud providers are enhancing their security measures to protect sensitive patient data. Cloud services now offer advanced encryption, access controls, and regular compliance audits to meet regulatory requirements, thereby gaining the trust of healthcare providers.
   

U.S. value-based healthcare service market by end-use is bifurcated into providers and payers. The providers segment dominated the market in 2023 and is predicted to rise rapidly during the forecast period with a CAGR of 6%.
 

• One prominent trend is the increasing adoption of value-based care models by hospitals and physician groups, which emphasize patient outcomes and care coordination. For instance, the Centers for Medicare & Medicaid Services (CMS) reported that by the end of 2023, over 50% of Medicare beneficiaries were enrolled in value-based care programs, reflecting a significant shift towards performance-based reimbursement models.
   
• Healthcare providers are also increasingly leveraging technology to enhance care delivery and improve patient outcomes. The integration of electronic health records (EHRs) and data analytics is enabling providers to better track patient health metrics, manage chronic conditions, and reduce unnecessary hospitalizations.
   
• Another key trend is the focus on patient-centered care, where providers are adopting comprehensive care management programs to address the needs of high-risk patients. For example, the use of remote patient monitoring and telehealth services has surged, allowing providers to maintain continuous patient engagement and reduce the need for in-person visits.
   

East South-Central value-based healthcare service market accounted for USD 877.3 billion in revenue in 2023 and is predicted to witness substantial market growth over the analysis timeline.
 

• The East South-Central zone, encompassing states like Alabama, Kentucky, Mississippi, and Tennessee, dominated the U.S. value-based healthcare service market due to several key trends and initiatives. One major trend is the region's aggressive adoption of value-based care models, driven by both state policies and federal incentives. For example, Kentucky's Medicaid program has increasingly shifted towards value-based payment structures, with the state’s Medicaid Managed Care Organizations (MCOs) implementing value-based contracts to improve care coordination and outcomes.
   
• Another significant trend in the East South-Central zone is the growth of integrated care networks and Accountable Care Organizations (ACOs). Tennessee has seen substantial investments in ACOs, which focus on improving care coordination and reducing costs through comprehensive care management. In 2023, Tennessee's ACOs achieved an average of ~7% savings on Medicare spending, demonstrating the effectiveness of these models in the region.
   
• Additionally, there is a growing emphasis on addressing health disparities and improving access to care in rural areas. The region has seen an increase in community health programs and partnerships aimed at reducing healthcare inequities. For example, Mississippi has launched initiatives to enhance access to preventive care and chronic disease management in underserved communities.
   

U.S. Value-based Healthcare Service Market Share

Companies primarily active in the U.S. have increased their partnerships with providers because these partnerships allow partners such as manufacturers, payers, and provider organizations to collaborate on programs, solutions, and initiatives that benefit patients and healthcare systems.
 

Value-based partnerships help to deliver the highest value incentive to the healthcare system and society by focusing on improving patient outcomes and total societal expenses. For example, in June 2021, Humana purchased One Homecare Solutions (one home) from WayPoint Capital Partners to improve value-based care in in-home healthcare services.
 

U.S. Value-based Healthcare Service Market Companies

Some of the eminent market participants operating in the industry include:

• Aetna Inc.
• Anthem Insurance Companies, Inc.
• Athena Healthcare
• Change Healthcare
• Curation Health
• ForeSee Medical, Inc.
• Genpact
• Kaiser Permanente
• Koninklijke Philips N.V.
• McKesson Corporation
• MVP Health Care
• Signify Health, Inc.
• UNITEDHEALTH GROUP
• Unlimited Technology Systems, LLC
   

U.S. Value-based Healthcare Service Industry News:

• In September 2023, Walgreens and Pearl Health established a cooperation, to expand value-based care with community-based primary care providers.
   
• In April 2023, CVS Health, a pharmacy company, announced a collaboration with Catholic Health, a healthcare company, and Catholic Health Physician Partner's ACO. The collaboration aimed to improve value-based care and access to healthcare for Medicare beneficiaries across the Catholic Health Physician Network in New York, USA.
   

U.S. value-based healthcare service market research report includes an in-depth coverage of the industry with estimates & forecast in terms of revenue in USD Million from 2021 to 2032 for the following segments:

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Market, By Models

• Accountable care organization
• Patient-centered medical home
• Pay for performance
• Bundled payments
• Shared savings

Market, By Deployment Mode

• Cloud
• On-premises

Market, By End-use

• Providers
• Payers

The above information is provided for the following zones:

• East North Central
• West South Central
• South Atlantic
• North East
• East South Central
• West North Central
• Pacific Central
• Mountain States