Honest Health Whitepaper
Executive summary
Enrollment in Medicare Advantage is expanding rapidly as the aging population continues to grow. Often referred to as the “Silver Tsunami,” this demographic shift is driving significant changes in the healthcare landscape. As of 2025, more than 33 million people — over half of all eligible Medicare beneficiaries — are enrolled in Medicare Advantage plans, more than doubling over the past decade[1]. The program’s extra benefits, care coordination, and low out-of-pocket costs make it an attractive option for seniors. However, for many health systems, realizing the program’s full potential remains complex and challenging.
Administrative burdens, high denial rates, and contractual challenges have led some executives and providers to leave these plans altogether.
Despite these barriers, there is a path to profitability if health systems can adapt to this new landscape.
At Honest Health, we believe health systems can win in Medicare Advantage with bold thinking, aligned partnerships, and strategic investment in clinical and financial infrastructure. Our experience shows success occurs when health systems place disciplined focus on four key areas:
- Precise financial risk management
- Strengthened clinical services and documentation integrity
- Provider engagement with actionable data and aligned incentives
- Assurances of financial safeguards
With the right strategies — and the right partner — health systems can move from uncertainty to sustained growth in Medicare Advantage.
The challenges of full-risk contracts
Participating in Medicare Advantage means adapting to a payment model that fundamentally differs from Traditional Medicare. Health systems are required to meet rigorous administrative requirements — such as prior authorizations and claim reviews — while often receiving lower reimbursement rates. These demands create downward pressure on revenue, even as expectations for care access and quality continue to rise.
Without the right infrastructure in place, the impact of Medicare Advantage participation is both operational and financial. Many physician groups face challenges in accurately documenting patient complexity, leading to missed reimbursement opportunities and limited resources to invest in care improvements. Yet building the necessary administrative support requires significant investment.
A 2024 Healthcare Financial Management Association (HFMA) survey highlights the strain2:
- 75% of healthcare finance leaders have hired additional staff to manage insurance denials
- 63% have expanded teams dedicated to accounts receivable follow-up
- 87% of CFOs report that strained payer-provider relationships have negatively affected patient care
This data highlights a broader challenge: As Medicare Advantage’s popularity increases, health systems must evolve their internal processes and capabilities to navigate risk effectively and protect clinical quality.
Beyond administrative strain, many provider organizations feel caught in an adversarial dynamic with payers — battling for data, struggling to understand performance targets, and unable to act on stale reports. These misalignments erode trust and stall progress. For value-based models to work, collaboration must replace friction.
The realities of financial strain
Major health systems, including Chicago-based CommonSpirit, have reported losses in the hundreds of millions tied to Medicare Advantage participation. Recovery only followed after implementing focused, strategic interventions3. This underscores the importance of addressing Medicare Advantage challenges head-on — with the right infrastructure, partnerships, and risk strategies from the start.
Just as important is finding partners who foster transparency, timely data sharing, and mutual accountability — creating alignment, not antagonism.
Core Competencies for Risk-Bearing Success
Health systems can capitalize on Medicare Advantage’s economic potential when they successfully shift their mindset from traditional fee-for-service payment models and focus on four key areas.
Key Area #1. Risk management expertise
Full-risk contracts offer upside opportunity but also come with financial exposure. Success starts with understanding your organization’s readiness and ensuring the right people, processes, and platforms are in place:
- Build teams with actuarial expertise to mitigate and monitor risk exposure, while anticipating and analyzing cost trends
- Develop advanced financial analytics to support real-time strategic adjustments and ensure sustainability in full risk contracts
- Equip physicians with performance dashboards to guide data-informed decision-making during the point of care
Key Area #2. Strengthening care delivery and documentation
Aligning reimbursement with the complexity of care requires accurate risk adjustment and collaborative care coordination:
- Identify and proactively manage high-risk, high-need patients to prevent complications
- Enhance care transitions to reduce unnecessary utilization and readmissions
- Ensure workflows support seamless coordination across all payers and patient types, reducing the burden of managing multiple models.
- Prioritize documentation integrity to ensure effective care delivery, resulting in appropriate reimbursement
Consider this an evolution of case mix index (CMI) and high-spend patients in hospitals; however, risk capture follows the patient across the entire care continuum.
Key Area #3. Physician buy-in is the catalyst for change
Behavioral change is one of the most challenging obstacles in any transition, and securing physician adoption of value-based care and Medicare Advantage is no exception.
Establishing buy-in is essential to transforming care. To lead meaningful change, executives must clearly articulate the value of the shift and provide consistent support to physicians throughout the process.
Despite good intentions, many employed physicians never see the financial upside of value-based contracts — reducing their motivation to meaningfully engage. Inconsistent or misaligned incentives, particularly when disconnected from clinical realities, erode trust. To shift behavior, providers must understand how their actions drive outcomes — and how those outcomes translate into rewards.
- Align incentives to reward measurable outcomes — and ensure those rewards are visible and meaningful to the clinicians delivering care
- Communicate clearly and consistently
- Offer meaningful data to empower physicians and enhance patient care
Key Area #4. Strategies to Safeguard Financial Performance
Even with strong execution, risk-bearing contracts can be risky. Financial protections help stabilize performance and preserve long-term sustainability:
- Anticipate revenue delays, utilization spikes, claim disputes, and market fluctuations
- Balance long-term investment with near-term stability
- Partner with experienced enablement organizations that share financial risk and offer aligned incentives
Importantly, risk protection isn’t just about the balance sheet — it’s also about physician bandwidth. Reducing complexity and offloading administrative burden can preserve capacity, prevent burnout, and improve care continuity.
Build or Buy?
Health system leaders face a critical decision: invest in building Medicare Advantage capabilities internally or partner with an experienced enablement organization. While developing these capabilities in-house is possible, success hinges on how quickly and effectively the system can scale — and whether it can manage the complexity without diverting resources from core clinical priorities.
The role of technology in scalable success
Technology is the backbone of high-performing Medicare Advantage strategies — but it’s not about having more tools. It’s about having the right infrastructure to support scale, accuracy, and clinical alignment.
The challenge? Most health systems weren’t built for risk. Legacy platforms can’t deliver the insights or interoperability needed to manage value-based care effectively. As a result, many organizations face a choice: invest heavily to build internal capabilities or partner with an enablement organization that brings proven technology to the table.
To succeed at scale, leading systems focus on:
- Clinical diagnosis and documentation integrity (CDDI) platforms that ensure risk is captured completely and compliantly
- Timely, point-of-care insights that help physicians make smarter decisions and improve patient outcomes
- Integrated analytics engines that transform complex data into clear, strategic insights for care and performance management
- Financial intelligence systems that predict utilization trends and monitor contract performance
Whether built internally or accessed through the right partner, these technologies help health systems move from reactive to proactive — reducing friction, preserving clinician bandwidth, and driving better outcomes for patients and organizations alike.
With the right infrastructure — and the right partner — technology becomes more than an investment. It becomes a strategic advantage.
Find the right Medicare Advantage partner
Building internal Medicare Advantage capabilities is possible — but often demands significant time, capital, and organizational focus. For many health systems, partnering with an experienced enablement organization offers a faster, more sustainable path to success.
Honest Health was purpose-built to support that path. Our approach is grounded in physician leadership, practical experience in risk-based models, and proven tools that help health systems manage complexity without losing focus on care delivery.
Health systems that partner with Honest Health benefit from:
- Risk-sharing and financial protections that promote stability and support long-term planning
- Streamlined operations that reduce administrative burden and enhance documentation and care coordination
- Technology and analytics platforms that deliver real-time, actionable data to support performance
- Aligned incentives that reach the point of care and support physician engagement
- A track record of scalability across diverse markets and system structures
With the right partner, health systems don’t have to build everything from scratch — they can move forward with confidence, equipped with the infrastructure, insight, and alignment needed to make Medicare Advantage work.
Accelerating growth with Medicare Advantage
Medicare Advantage brings real challenges — but also real rewards. With the right strategies, infrastructure, and partnerships, health systems can move beyond uncertainty and turn Medicare Advantage into a powerful engine for long-term sustainability and clinical excellence.
Honest Health offers proven experience, physician-led insight, and technology-backed solutions to help health systems succeed in Medicare Advantage and beyond. Together, we can turn complexity into clarity — and build a stronger future for healthcare.
Ready to explore what’s possible in Medicare Advantage? Learn more at partnerwithhonest.com
Sources
2 https://www.hfma.org/revenue-cycle/bridging-the-payer-provider-divide/