We want to congratulate our companies HarmonyCares and Aledade, Inc. for all their success and contributions to lowering cost of care and improving quality, as demonstrated by their recent ACO Reach and MSSP results. Read more about where we see value-based care startups going in the future in Cici Lemke Ceralde's post below. #ValueBasedCare #VBC #ACO #HealthCare
I've been spending some time this year looking over both the business and quality results coming out of startups in the value based care world, and thinking about what may come next for this market. With results from value-based care often coming in mixed, it was refreshing to see CMS report over $1.6B in savings and (somewhat) improved quality metrics from the 2023 ACO Reach program. And it was particularly exciting for me to see so many startups driving this performance. It is clear at this point that value-based arrangements from Medicare and Medicare Advantage plans have made providing primary care to these populations much more economically viable for providers (just look at some of Aledade's materials for case studies!), but many value-based care startups are confronted with high startup costs (if building brick-and-mortar clinics), high costs of service, and modest gross margins. This isn’t the typical financial profile of a hypergrowth venture backed startup, and some of the first generation of value-based care companies have experienced growing pains as they race to scale these businesses. Three things are on my mind for the next generation of value-based care companies: 1. How they can scale patient panels and turn on risk-based contracts faster, and limit the need for brick-and-mortar with increasing digital and home-based services 2. How they will successfully tackle new risk pools, particularly going beyond managing some of the most common chronic conditions and tackling specialty spend 3. What strategies they will use to manage growth; it seems to me regional concentration a-la traditional healthcare systems may offer better economics and faster paybacks than multimarket hypergrowth