A recent joint report by the National Association of Accountable Care Organizations (NAACOS) and Innovaccer Inc., a healthcare artificial intelligence (AI) company, found tangible evidence that the U.S. healthcare delivery system is indeed moving toward value-based care (VBC). Fifteen years after the passage of the Patient Protection and Affordable Care Act (ACA), which promoted VBC through the advent of ACOs and other alternative payment models, there is finally evidence that providers are actually moving in that direction. This Health Capital Topics article reviews the joint report on “The State and Science of Value-based Care 2025.”

VBC is a healthcare model that shifts the focus from the volume of services provided to the quality and outcomes (i.e., value) of patient care. Instead of being paid for each test or procedure (i.e., fee-for-service, or FFS), providers are incentivized to keep patients healthy, effectively manage chronic conditions, and prevent complications. This approach aims to improve patient health, enhance the patient experience, and reduce overall healthcare costs by promoting coordinated, preventive, and patient-centered care.¹ While the trend toward VBC initiatives is not new, nor is the policy movement away from FFS arrangements, there has been much talk but seemingly little action in the past 15 years.

The joint report “examines the evolving landscape of healthcare payment models and [VBC] across U.S. healthcare.”² Nearly 170 leaders at 142 healthcare organizations across care settings were surveyed on “the progress, pain points, and investment signals driving [VBC] strategies forward.”³ As of 2025, over 60% of organizations have increased their participation in VBC programs, highlighting the momentum behind the shift toward VBC.⁴ Notably, 30% of surveyed organizations indicated that a quarter of their revenue is tied to VBC contracts, and over 20% stated that at least half of their revenue comes from fully capitated or downside risk contracts, “a strong indicator of advancing maturity in VBC adoption.”⁵ Nearly 65% of leaders expect to see revenue gains from VBC in 2025 compared to 2024.⁶

The report also surveyed leaders about what is keeping them from further VBC adoption. The top barriers to VBC adoption were reported to be, perhaps unsurprisingly:

1. Financial risk (87%);
2. Provider readiness (80%);
3. Lack of interoperability (75%); and
4. High cost of technology (67%).⁷

In order to propel VBC adoption, 74% of responding organizations asserted that additional financial support is needed.⁸ However, the needed capital does not appear to be a complete bar to VBC for organizations, as over 50% of survey respondents plan to increase their investment in technology solutions in 2025 to better support their VBC efforts.⁹ Top among those priorities are:

1. Data analytics and AI, with 31.2% of organization investing; and
2. Care management solutions, with 30% of organizations investing.¹⁰

As regards AI, approximately 65% of respondents are optimistic about AI’s “potential to enhance predictive and prescriptive analytics in [VBC] arrangements.”¹¹ Overall, it seems that the use of technology to make sense of all the health data being captured from patients, which is crucial to identifying the appropriate treatment plan and actions for each individual patient, may be the key to full-fledged, long-term acceptance of VBC.

These trends are particularly encouraging given that the Centers for Medicare and Medicaid Services (CMS) Innovation Center announced on May 13, 2025 that alternative payment model participants may be required to accept downside risk in their VBC arrangements going forward.¹² In other words, the shift toward VBC is accelerating, regardless of provider readiness.

The report authors summarize that the “study reveals an industry in transition, with organizations showing measured progress despite significant operational and financial challenges.”¹³ President and CEO of NAACOS, Emily D. Brower, noted that “[t]his report highlights how technology, collaboration, and infrastructure can support providers in accountable care to drive innovation in care delivery.”¹⁴ The cofounder and CEO of Innovaccer, Abhinav Shashank, added: “[a]s the shift to [VBC] accelerates, the research highlights a critical truth: successful transformation demands more than just intent, it requires deep investments in data, technology, and partnerships.”¹⁵