Jason Howard, President, and Michael Burris, SVP, offer an Honest Perspective on how health systems and hospitals should weigh building in-house capabilities versus partnering to enable value-based care
As pressures mount across the healthcare landscape, health systems and hospitals are rethinking their care models, financial strategies, and long-term sustainability plans. How they go about it — and how quickly they can execute — may determine whether they keep pace or fall behind.
For many, the shift to value-based care is already underway. Health systems, hospitals, and providers are now at a critical crossroad: Should they build internal capabilities to support value-based care transformation or partner with an experienced enablement organization to accelerate their progress and reduce risk?
The market’s demand for a new approach
The demand for transformation isn’t theoretical. Multiple converging forces — demographic, clinical, and financial — are making the traditional fee-for-service model increasingly untenable.
With 10,000 people turning 65 every day and 60% of U.S. adults living with at least one chronic condition, the “silver tsunami” is driving higher demand for complex care management and Medicare-focused innovations.
The Centers for Medicare and Medicaid Services continues to prioritize the alignment of Medicare patients and accountable care relationships and evolve delivery models through its Innovation Center.
Rising labor costs, annual primary care subsidies of $250,000 per physician, low-value utilization, and delayed reimbursements have put many systems in a position where long-term sustainability is at risk.
Ultimately, as care becomes more complex and reimbursement less predictable, the traditional fee-for-service model is increasingly difficult to defend. Value-based care offers a compelling answer, but delivering on its promise requires health systems, hospitals, and providers to address significant internal and external challenges.
The complexities of value-based care adoption
Value-based care offers clear benefits: improved patient outcomes, more sustainable revenue models, empowered providers and care teams, and better alignment with long-term population health goals. However, the transition can be layered in complexity and must be executed in a way that aligns financial, operational, and clinical domains.
The shift often requires significant upfront investments with uncertain returns in the early years. With little room to absorb financial missteps, taking on downside risk, standing up new capabilities, and redesigning compensation models without a clear return pathway can present intimidating exposure for participants.
Compounding these financial pressures is the mounting administrative burden — from complex documentation and compliance requirements to the growing volume of payer program requirements —which consumes valuable clinical and operational capacity.
At the same time, many legacy technologies and workflows often aren’t equipped to support value-based care and risk-based arrangements. Integrating new platforms and real-time data analytic capabilities, aligning team-based care processes, and scaling care coordination often require not just new tools but a rethinking of how care is delivered across the continuum.
Furthermore, change management is frequently overlooked in navigating the shift to value-based care despite its significant influence on an organization’s success. Physician engagement and alliance are paramount, but traditional incentives and long-standing practice norms can be difficult to change. Without buy-in at every level, even the most well-designed models struggle to gain traction.
Build or buy? A decision that defines the path forward
For most organizations, the choice isn’t whether to pursue value-based care — it’s whether to build the infrastructure internally or partner to accelerate the transition.
Building internally has its advantages. It allows health systems and hospitals to tailor models to their specific context, maintain full control, and align initiatives with their unique culture. However, it also requires significant and sustained investment in time, talent, and capital. For organizations already strained for resources, the risk of stalled progress or missed milestones is high and can erode trust and momentum – and be a costly decision for leaders.
Buying, or more accurately, partnering, can offer a faster, more efficient, and more confident path. The right partnership can bring established tools, tested care models, payer relationships, contracting expertise, and operational infrastructure that is difficult and costly to scale in-house.
For example, partners that offer clinical documentation integrity (CDI) programs can play a pivotal role in bolstering an organization’s performance across clinical, financial, and operational pillars. Accurate and timely documentation is not only critical to deliver a high level of patient care, but it also supports appropriate reimbursement and strengthens performance in quality metrics, risk adjustment accuracy, and population health analytics. When CDI is integrated into broader care redesign efforts, it becomes a catalyst for more aligned, efficient, and accountable care delivery, which results in a more positive outcome for patients.
The most effective partners understand how to embed these solutions within a health system’s existing structure — complementing, rather than replacing, what works today. When deployed in tandem with dedicated support teams, data-driven tools, and a collaborative model, a partner’s capabilities can help health systems, hospitals, and providers move toward sustained, measurable outcomes, reducing the risk of costly missteps and allowing internal teams to focus on what they do best: caring for patients.
Partnering for performance: What matters most
The right partner should bring real-world experience, trusted infrastructure, and measurable impact. Leaders should consider these qualifications when partnering with a strategic enablement partner:
- A track record in shared and full-risk arrangements, including strategies to minimize downside exposure
- Deep payer relationships and expertise in contracting, reimbursement optimization, and cost containment
- Proven ability to integrate with existing teams and workflows, not disrupt them
- Scalable care coordination, data, and population health capabilities tailored for Medicare and complex care patients
- Tools and strategies to reduce administrative burden, such as CDI programs that iterate and improve accuracy and performance
- Commitment to clinician engagement, aligned incentives, and change management support
- Transparent performance metrics with shared accountability for outcomes
Build vs. buy: Strategic considerations for VBC infrastructure
There’s no one-size-fits-all approach to value-based care transformation. This comparison outlines key considerations to help leaders evaluate the best path forward. Consider that many successful health systems and hospitals leverage a hybrid approach: building core competencies while partnering for speed and scale.
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Build Internally |
Buy from a Partner |
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Control over model design |
Accelerated implementation |
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Aligns with unique culture and workflows |
Access to established infrastructure & expertise |
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High upfront and ongoing investment |
Protections; lower initial investment; shared risk |
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Longer time to scale |
Faster path to measurable outcomes |
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Risk of delayed ROI or internal fatigue |
Complementary support to internal teams |
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Requires hiring and training new capabilities |
Proven models, tools, and payer relationships |
A call for strategic clarity
The industry’s direction toward value-based care is clear, but the real question is how to make it work.
Achieving success requires more than aspiration: It requires strategic clarity, operational focus, and a willingness to rethink legacy assumptions.
Importantly, health systems and hospitals must properly assess their value-based care readiness and identify the necessary capabilities to succeed. Whether building internally or seeking a partner, the goal should be the same: delivering high-quality, patient-centered care in a financially sustainable model that is rewarding for all.
As leaders, we must be pragmatic about the challenges — and bold about the opportunities. The organizations that succeed in this transition will be those that move decisively, remain grounded in mission, and are willing to evolve with purpose.
Ready to determine what it will take to succeed? Start with our Value-Based Care Readiness Checklist, or connect with Honest Health to discuss the capabilities required for long-term stability in value-based models.