The U.S. value-based healthcare service market size was estimated at USD 3.22 trillion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 7.5% from 2022 to 2030. Burgeoning pressure on the health system as a result of the constant increase in healthcare spending as a percentage of GDP and healthcare delivery costs are the key contributors to the rising penetration of value-based healthcare services in the industry. These 3 keywords are quite unlikely to be excluded by any government agency, or healthcare strategy provider on a transformation agenda. There is growing potential to implement a value-based healthcare system in the U.S. due to general areas of improvement such as the need for patient-centricity and uncoordinated treatment.
For instance, the rate of readmission for pneumonia and heart attacks among U.S. residents between 2011 and 2014 was 17%. With almost 250,000 fatalities in 2018, medical mistakes were the third greatest cause of mortality in the U.S., after heart disease and cancer. There is strong evidence that a significant portion of healthcare money is wasted on preventable medical problems or unnecessary treatments, highlighting the growing demand for value-based healthcare services.
The COVID-19 pandemic has greatly increased the financial, regulatory, and technology challenges that healthcare payers currently confront. The pandemic has improved payers' cash flow in the short term, but it has also brought about major operational and market changes for which payers must get prepared. The exchange market is also anticipated to expand as a result of payers, including United Healthcare, Anthem, Centene, and Oscar Health, reviving their interest in this market due to changes in COVID-19's enrollment patterns.
Pay for performance accounted for the largest market share revenue of over 28.00% in 2021 due to the rising shift from traditional fee-for-service toward payment for value-based healthcare programs. Furthermore, to reduce costs and improve healthcare for patients and society, the government has provided incentives that have driven payers to establish value-based pay-for-performance programs.
For instance, the Affordable Care Act has encouraged the Center for Medicare and Medicaid Services (CMS) to take the lead in value-based care by implementing a range of payment methods, such as several pay-for-performance programs. The Hospital Readmissions Reduction Program (HRRP), the Hospital Value-Based Purchasing Program (VBP), and the Hospital-Acquired Condition (HAC) Reduction Program are three Pay for Performance initiatives that have an impact on hospital reimbursement through Medicare. These programs accounted for nearly 40% of total spending, and CMS has established them as the primary means of financing healthcare.
On the other hand, patient-centered medical homes would register the highest market growth for value-based healthcare services during the forecast period. The ability of patient-centered medical home services to improve efficiency while providing medical assistance and reducing medical costs is one of the key factors influencing the market expansion. Additionally, this market would have significant support, as healthcare providers at both the private and public levels restructure their operations to line with value-based reimbursement and patient-centered medical home care models. For instance, Pfizer has several patient-centered medical home models with which it collaborates on care management programs (PCMH).
Medicare is gradually shifting away from fee-for-service compensation toward value-based models that promote cost-cutting and quality improvement, which is anticipated to drive market growth. The Medicare Advantage (MA) program, which enables Medicare beneficiaries to voluntarily join a commercial plan that provides health benefits, was established by the Balanced Budget Act (BBA) of 1997. In a related manner, the Centers for Medicare and Medicaid Services (CMS) and private insurers have enthusiastically endorsed a number of payment strategies for primary care doctors, specialists, and health systems in taking on financial risk for the individuals they treat.
These payment plans include, for instance, bundled payments, accountable care organizations, and the comprehensive primary care initiative. All of these models have been widely embraced in both traditional Medicare and Medicare Advantage, which is predicted to fuel market expansion. Some of these models were established by CMS through the Innovation Center, while others were produced by the private sector.
The increasing healthcare expenditure in the U.S. is a key factor driving the adoption of services for Home Health Care settings during the forecast period. For instance, as per the American Journal of Managed Care (AJMC) in 2021, there was a 19% cost decrease in home healthcare management, when comparing patients treated in a hospital environment versus those treated in a hospital-at-home setting.
Medicare reimbursements in the U.S. are extremely advantageous in terms of providing value-based healthcare for better outcomes for patients at a low cost. For instance, through December 31, 2021, the Center for Medicare and Medicaid Innovation adopted the initial Home Health Value-Based Purchasing Model. The concept was created to help Medicare-certified Home Health Agencies across the country improve the quality and efficiency of their treatment.
On the other hand, the institutional care model for healthcare is anticipated to be the growth driver for this market throughout the forecast period due to increasing technology, operational problems, rising consumer expectations, and new health conditions. As a result, there has been a continuous shift toward healthcare services that are value-based and patient-centered. Due to profitability, the number of patients treated, and lower financial risk, value-based healthcare services are driven by a focus on establishing integrated practice units, which measure outcomes and cost at the patient level, bundle prices, geographic expansion, and information technology platforms.
Companies that are primarily active in the U.S. have increased their partnerships among the providers as these partnerships allow partners such as manufacturers, payers, and provider organizations to co-develop programs, solutions, and initiatives collaboratively for the benefit of patients and healthcare systems.
Value-based partnerships assist with conveying the highest value incentive to the healthcare system and society by concentrating on improving patient results about the system and societal total costs. For instance, in June 2021, Humana acquired One Homecare Solutions (one home) from WayPoint Capital Partners to enhance value-based care in in-home healthcare services.
Furthermore, Signify Health announced its intention to merge with Remedy Partners in August 2019. Signify Health supports in-home care and offers care management services. With the aid of the merger, the two businesses are better able to integrate their technology, data, and network resources. This includes 9,000 credentialed providers, a combined countrywide partner network of more than 300 provider systems, 2,000 post-acute organizations, more than 200 community sites, and 9,000 accredited providers. Some prominent players in the U.S. value-based healthcare service market include:
Baker Tilly US, LLP
Siemens Medical Solutions USA, Inc.
Boston Consulting Group
Veritas Capital Fund Management, L.L.C.
NXGN Management, LLC.
Unlimited Technology Systems, LLC
ForeSee Medical, Inc.
Signify Health, Inc. (Sentara Healthcare)
Koninklijke Philips N.V.
The Commonwealth Fund.
Market size value in 2022
USD 3.46 trillion
Revenue forecast in 2030
USD 6.16 trillion
CAGR of 7.5% from 2022 to 2030
Base year for estimation
2017 - 2020
2022 - 2030
Revenue in USD billion and CAGR from 2022 to 2030
Revenue forecast, company ranking, competitive landscape, growth factors, and trends
Models, payers, providers utilization category
Key companies profiled
Baker Tilly US, LLP; Deloitte; Siemens Medical Solutions USA, Inc.; Boston Consulting Group
Change Healthcare; Athena Healthcare; Veritas Capital Fund Management, L.L.C.; UnitedHealth Group; NXGN Management, LLC.; McKesson Corporation; Genpact; Unlimited Technology Systems, LLC; ForeSee Medical, Inc.; Signify Health, Inc. (Sentara Healthcare); Curation Health; Koninklijke Philips N.V.
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This report forecasts revenue growth at the country level and provides an analysis of the latest industry trends in each of the sub-segments from 2017 to 2030. For this study, Grand View Research has segmented the U.S. value-based healthcare service market report based on models, payer category, and providers’ utilization category:
Models Outlook (Revenue, USD Billion, 2017 - 2030)
Pay for Performance
Patient-centered Medical Home
Payer Category Outlook (Revenue, USD Billion, 2017 - 2030)
Medicare and Medicare Advantage
Providers’ Utilization Category Outlook (Revenue, USD Billion, 2017 - 2030)
Home Health Care
Frontloading Skilled Nursing Visits
Specialized Frontloading Therapy Visits
b. The global U.S. value-based healthcare service market size was estimated at USD 3,221.02 billion in 2021 and is expected to reach USD 3,466.11 billion in 2022.
b. The global U.S. value-based healthcare service market is expected to grow at a compound annual growth rate of 7.5% from 2022 to 2030 to reach USD 6,162.63 billion by 2030.
b. Pay for performance dominated the Models segment of the U.S. value-based healthcare service market with a share of 28.35% in 2021. This is attributable to the growing shift away from traditional fee-for-service toward payment for value-based healthcare programs.
b. Some key players operating in the U.S. value-based healthcare service market include Baker Tilly US, LLP; Deloitte; Siemens Medical Solutions USA, Inc.; Boston Consulting Group; Change Healthcare; Athena Healthcare; Veritas Capital Fund Management, L.L.C.; UnitedHealth Group; NXGN Management, LLC.; McKesson Corporation; Genpact; Unlimited Technology Systems, LLC; ForeSee Medical, Inc.; Signify Health, Inc. (Sentara Healthcare); Curation Health; Koninklijke Philips N.V.
b. Key factors that are driving the market growth include improved chronic health condition patient management, the higher incidence of chronic non-communicable diseases, the rising demand for more integrated care delivery models, the demand for informed shared decision-making, personalized experiences, and choice among patients, as well as rising organizational restructuring efforts and rising government initiatives.
b. The COVID-19 pandemic has eventually accelerated the deployment of value-based healthcare service models, causing the launch of care delivery to more virtual models due to the declared necessity to focus efforts on patient activation and facilitate treatment of chronic, elective, and non-communicable illness situations.
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