---
description: VBC adoption shows a wide gap between participation and risk-bearing with 60 percent of payments in value arrangements but only 14 percent in full capitation revealing that most providers take upside bonuses without accepting downside risk
type: claim
domain: health
created: 2026-02-17
source: "HCP-LAN 2022-2025 measurement; IMO Health VBC Update June 2025; Grand View Research VBC market analysis; Larsson et al NEJM Catalyst 2022"
confidence: likely
---

# value-based care transitions stall at the payment boundary because 60 percent of payments touch value metrics but only 14 percent bear full risk

As of the most recent HCP-LAN measurement, 59.5% of US healthcare payments are tied to value and quality in some form, while 40.5% remain pure fee-for-service. But the composition matters enormously: only 19.6% of payments are in risk-based arrangements, and just 14% flow through fully capitated models. Medicare Advantage leads with 64% of payments in value-based arrangements, while commercial and Medicaid lag at roughly half still in FFS. The VBC services market is projected to reach $4.45 trillion by 2030.

CMS is pushing aggressively -- 14.3 million Medicare beneficiaries are in ACOs as of January 2026, the mandatory TEAM bundled payment model launched covering $18B in hospital payments, and the 10-year LEAD model starts January 2027. CMMI's stated goal is 100% of Medicare beneficiaries in accountable care by 2030. But the gap between "touching value" and "bearing risk" reveals the core structural challenge: most providers are happy to accept upside bonuses for quality metrics while avoiding the downside risk that actually drives behavioral change.

Larsson, Clawson, and Howard frame this through three simultaneous crises: a crisis of *value* (20-40% of spending is wasted on low-value or inappropriate care), a crisis of *evidence* (only 3% of pharmaceutical trials compare multiple products), and a crisis of *purpose* (clinician burnout from managing complexity rather than caring for patients). Payment reform alone cannot solve these -- it requires a systems approach where outcomes measurement, payment alignment, digital infrastructure, and delivery organization all move together.

The Making Care Primary model's termination in June 2025 (after just 12 months, with CMS citing increased spending) illustrates the fragility of VBC transitions when the infrastructure isn't ready.

---

Relevant Notes:
- [[healthcare is a complex adaptive system requiring simple enabling rules not complicated management because standardized processes erode the clinical autonomy needed for value creation]] -- the systems framework for why payment reform alone fails
- [[four competing payer-provider models are converging toward value-based care with vertical integration dominant today but aligned partnership potentially more durable]] -- the structural models competing to deliver on VBC
- US healthcare incentives are fundamentally misaligned because every participant profits from sickness not health -- the underlying incentive structure that VBC attempts to correct
- [[the physician role shifts from information processor to relationship manager as AI automates documentation triage and evidence synthesis]] -- AI as infrastructure enabling the VBC transition
- [[CMS 2027 chart review exclusion targets vertical integration profit arbitrage by removing upcoded diagnoses from MA risk scoring]] -- CMS is tightening the FFS-to-VBC transition by closing profitable FFS-like mechanisms within MA, pushing the industry toward genuine risk-bearing
- [[medical care explains only 10-20 percent of health outcomes because behavioral social and genetic factors dominate as four independent methodologies confirm]] -- the 86% of payments not at full risk are systematically ignoring the factors that matter most for health outcomes

Topics:
- health and wellness
