In healthcare, value-based care (VBC) is more than a familiar phrase. It represents a commitment to better patient outcomes and more thoughtful use of resources. Yet as the industry shifts from fee-for-service (FFS) reimbursement to value-based contracts, a significant gap persists.
We often focus on contract design, aligned incentives, shared savings, and risk-bearing arrangements. But far less attention is given to the operational structure healthcare organizations need to actually support these models. In our 2025 provider survey, nearly two-thirds said VBC analytics are critical to their future, yet more than half cited data quality and interoperability as barriers, revealing how value-based ambitions are still constrained by FFS-era operations.
To make VBC succeed, organizations must invest in the day-to-day tools and processes that bring these models to life.
Why incentives aren’t enough to achieve VBC outcomes
The move to value-based contracts is meant to align everyone around shared goals: improving quality, lowering costs, and enhancing patient experience. But changing how providers are paid doesn’t automatically change how care is delivered.
The real opportunity isn’t just in rewriting contracts. It’s in redesigning operations to match how care is delivered today, not how it was reimbursed yesterday. When organizations update their operating model, not just their incentive model, VBC becomes achievable instead of aspirational.
What high-performing value-based operations look like
Organizations that excel in VBC take a distinct approach. Their operations are built on integrated clinical, operational, and financial workflows that engage everyone involved in care delivery, providers, payers, and patients. Teams are accountable for improving care coordination across providers and settings, not just managing handoffs. Performance is monitored in near real-time, rather than only after the fact. And their operating model scales, supporting both growth and protection from downside risk.
Here’s what that looks like in practice:
1. Integrated workflows from data infrastructure and analytics
Successful value-based operations depend on clinical, financial, and operational teams working together. Silos undermine performance. Without actionable insights, even well-aligned incentives fail to drive improvement. Activities like care navigation, post-acute coordination, and utilization management are not separate tasks, they are interconnected. Advanced analytics integrate data to identify high-risk patients, track performance metrics, and monitor quality and cost outcomes. This also enables seamless data sharing between teams, making collaboration routine.
2. Clear accountability across teams to drive care coordination
In FFS environments, accountability is transactional: Was the visit completed? Was the claim submitted? VBC shifts accountability to longer-term outcomes: Were readmissions avoided? Was chronic disease managed effectively over the year? Did total cost of care (TCOC) improve?
This requires accountability that is visible and continuous. Teams need to “own” results such as leakage, utilization, and post-acute variation, not simply review data 60-90 days after the fact. Achieving this means building care management teams, deploying population health tools, and integrating workflows to ensure patients receive appropriate, timely, and efficient care. When accountability is unclear, issues persist until they become costly; when it is clear, teams act early.
3. Near real-time performance visibility
Retrospective reporting is too slow for VBC. By the time a monthly or quarterly report arrives, the opportunity to intervene has passed. Organizations that lead in VBC use near real-time data to support everyday decision-making. They track performance against key value-based metrics with near real-time visibility. When emerging risks such as potential readmissions surface, care teams gain timely insight and can intervene before issues escalate.
4. Scalable playbooks for driving growth and managing risk
Managing risk effectively requires operational models that scale. High-performing organizations develop repeatable playbooks for activities such as care coordination, risk adjustment, and population health management. Accurately tracking shared savings, distributing incentives, and managing risk pools demand robust administrative processes. Organizations need the operational capacity to oversee these complex financial arrangements transparently and efficiently.
These playbooks must work across new markets, new service lines, or new patient populations. They need to support both upside arrangements (shared savings) and downside arrangements (loss protection). And they must be flexible enough to adapt as the organization grows while remaining grounded in proven practices.
Why VBC fails when treated as a payment model instead of an operating model
True success in VBC requires a holistic commitment to operational change, patient engagement, and continuous performance improvement. It demands a fundamental redesign of how clinical, financial, and data teams collaborate.
When VBC is treated as a reimbursement strategy rather than an operating model, predictable problems emerge:
- Visit-based workflows: Trying to manage outcomes with workflows built around visits and claims, rather than patient journeys, leads to missed opportunities for intervention. Organizations end up reacting to activity instead of managing population-level needs.
- Delayed reporting: If care teams do not see the drivers of cost and quality until 60-90 days after the fact, they cannot intervene effectively. Retrospective reporting locks teams into a cycle of late awareness and limited impact.
- No ownership of key metrics: When no one “owns” metrics such as leakage, utilization, or post-acute variation, issues persist without timely action. Assigning metrics is not the same as establishing true accountability.
- Siloed data and teams: Without operational integration, even strong analytics or advanced tools cannot overcome fragmented processes. If teams cannot act together on shared insights, the organization cannot meaningfully influence outcomes or cost.
The operational architecture problem
Accountable Care Organizations (ACOs) and Clinically Integrated Networks (CINs) are responsible for improving 90-day outcomes. Yet control is often lost the moment a patient enters a post-acute setting. Real-time visibility disappears. Clinical context is fragmented. What remains is retrospective readmission data that arrives long after meaningful intervention was possible.
This is not a contract design problem. It is an operational architecture problem.
VBC requires an operating model built for continuity, actionability, and coordination. That includes:
- Care coordination infrastructure: Systems that function across organizational boundaries, not just within hospital walls. Effective VBC depends on shared visibility, shared communication channels, and shared accountability across all sites of care.
- Observable accountability: Mechanisms that make responsibility and action visible in real time, not only through retrospective reports. Teams need clarity about who is acting, when, and with what effect.
- Workflows designed for continuity: Processes that follow the patient journey end-to-end, rather than treating each setting or encounter as an isolated transaction. Continuity is essential for preventing readmissions, reducing variation, and delivering consistent outcomes.
The role of technology and AI, effective only when operations are ready
Healthcare organizations are rapidly adopting AI to support care coordination, population health, and predictive risk management. But technology is not a cure-all. If the underlying operations are not designed for VBC, AI simply accelerates existing dysfunction.
But insights alone do not change outcomes. If those signals are not connected to accountable teams and proactive workflows, they remain unused, and nothing improves for the patient.
Technology should enable value-based operations, not attempt to replace them. When operations are aligned around integrated workflows, real-time visibility, and clear accountability, AI becomes a force multiplier. When they are not, AI only makes inefficiencies move faster.
What high-performing organizations do differently
These are not add-ons or pilot initiatives, they are built into how the organization operates every day:
- Embedding care navigation and post-acute coordination: These functions are not bolted onto existing workflows. They are core operational capabilities, integrated into daily clinical practice to ensure patients receive the right support across settings.
- Aligning all stakeholders to shared goals: Primary care providers, specialists, hospitals, and post-acute partners are all accountable for outcomes. Alignment is not philosophical, it is operational, with shared incentives, shared visibility, and shared responsibility.
- Building scalable playbooks: Teams rely on proven strategies for managing both upside and downside risk. These playbooks are adaptable to new populations, new markets, and new service lines, enabling consistency as the organization grows.
The path forward: Redesigning for value
The transition to VBC is difficult not because the incentives are unclear, but because the operating model has not caught up. You cannot run VBC on FFS operations and expect different results.
To deliver on the promise of VBC, organizations must:
- Redesign workflows around patient journeys: Move beyond visit-based, transactional processes. Build continuity, proactive outreach, and follow-through into every stage of the patient experience.
- Establish real-time visibility and accountability: Use technology to track outcomes as they happen, and assign clear ownership for key metrics. Teams need timely insight and defined responsibility to act effectively.
- Integrate clinical, financial, and data teams: Break down the silos that keep these groups operating independently. Unified, outcome-driven teams are essential to managing TCOC and improving quality.
- Invest in scalable care coordination infrastructure: Build systems that work across settings, partners, and geographies, not just within the walls of a single facility. Coordination must extend wherever the patient goes.
- Treat VBC as an operating model: Recognize that success depends on redesigning how the organization works, not just how it gets paid. VBC requires structural, cultural, and operational alignment, not contractual compliance.
Summary and implications for value-based operations
VBC requires more than new contracts, it calls for integrated operations, near real-time data, and clear accountability. Milliman MedInsight solutions are designed to directly support these core elements, helping organizations turn value-based strategy into day-to-day execution:
- The VBC Platform brings together cost, quality, utilization, and attribution insights. By unifying data and analytics across functions, teams can coordinate care management, financial oversight, and performance improvement using a shared source of truth rather than disconnected tools.
- With VBC Contracts, organizations can monitor performance against contract-specific benchmarks and measures as they evolve. This supports observable accountability by clarifying ownership of key metrics such as TCOC, leakage, and quality performance, enabling teams to take action before issues become rooted.
- ACO Builder supports the development of scalable, repeatable strategies by helping organizations design high-performing networks, evaluate provider combinations, and forecast financial outcomes. These capabilities allow leaders to apply proven playbooks consistently as they expand into new markets, populations, and risk arrangements.
Together, these solutions help organizations operationalize the principles outlined in this framework, transforming VBC from a payment strategy into a sustainable operating model. By aligning technology with redesigned workflows and accountability structures, organizations can deliver better outcomes, improve efficiency, and manage risk with confidence.
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