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Value-based care companies are a hot target for healthcare investors
Investors see opportunities in VBC players: But they’ll have to play the long game to achieve financial success. VBC models don’t produce results overnight. Healthcare private equity (PE) firms and other backers are homing in on value-based care (VBC) companies as key investment targets, according to Bain & Company’s Global Healthcare Private Equity and M&A Report 2023. To control spending, providers and payers are collaborating on VBC initiatives in which physicians are financially incentivized to deliver low-cost, quality care versus a higher volume of care services. The pandemic catalyst: Providers who only got compensated under a traditional fee-for-service (FFS) payment model suffered revenue losses due to abrupt reductions in patient visits. Investors quickly realized that providers would want greater financial protection against future FFS downturns.
Medigy Insights
Healthcare private equity firms and other investors are increasingly targeting value-based care (VBC) companies, according to a report by Bain & Company. To control spending, providers and payers are incentivizing physicians to deliver quality care at lower costs under VBC models. While VBC offers long-term financial benefits, it requires sustained efforts and patience to achieve success. The report also highlights the pandemic's impact on the sector, leading to providers seeking greater financial protection against future fee-for-service downturns.
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