GLOBAL VALUE-BASED HEALTHCARE MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024-2031)

Global value-based healthcare market was valued at US$ 12.18 Bn in 2023 and is expected to reach US$ 43.39 Bn by 2031, growing at a compound annual growth rate (CAGR) of 17.2% from 2024 to 2031.

Global value-based healthcare market has been witnessing significant growth in the past years. Value-based healthcare is an approach where reimbursement of healthcare services is based on patient health outcomes instead of fee-for-services. It aims to improve quality of care and reduce healthcare costs. Factors such as rising healthcare costs, growing focus on patient-centric care, higher prevalence of chronic diseases, and government initiatives to promote quality and efficient care delivery are fueling the demand for value-based healthcare solutions across the world. Furthermore, integration of advanced technologies including big data analytics, artificial intelligence (AI) and block chain is helping providers shift from volume to value. 

Global Value-Based Healthcare Market- Regional Insights

• North America is expected to be the largest market for value-based healthcare during the forecast period, accounting for over 35.7% of the market share in 2024. The North America value-based healthcare market is driven by factors such as growing prominence of accountable care organizations, and shift towards alternative payment models by public and private payers.
• Asia Pacific market is expected to be the second-largest market for value-based healthcare market, accounting for over 25.2% of the market share in 2024. The Asia Pacific value-based healthcare market is driven by factors such as rising healthcare costs which are putting pressure on governments and payers to curb expenditure.
• Europe market is expected to be the fastest-growing market for value-based healthcare market, with a share of 19.0% during the forecast period. The Europe value-based healthcare market is driven by rising demand to contain healthcare expenditures and improve patient outcomes. High costs that are associated with chronic diseases and an aging population are major factors supporting new payment models.

Figure 1. Global Value-Based Healthcare Market Share (%), By Region, 2024

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Analyst View: Global shift towards value-based healthcare models is being driven by the need to curb rising healthcare costs and improve patient outcomes. More countries are  experimenting with payment mechanisms that reward healthcare providers for patient wellness rather than volume of procedures. This transition from fee-for-service to outcomes-based reimbursement will likely accelerate over the forecast period. However, moving to value-based care also presents challenges for providers unused to assumption of financial risk. Establishing appropriate quality metrics and collecting relevant data on total patient costs requires substantial investment in technology and care coordination infrastructure. Data privacy concerns could also slow adoption in some regions.

Global Value-Based Healthcare Market- Drivers

• Shift from fee-for-service to value-based payment models: The healthcare payment system across many countries is gradually shifting from traditional fee-for-service models to value-based payment models where the focus is more on health outcomes rather than service volume. This transition is a key driver for the growing global value-based healthcare market. Under the fee-for-service system, healthcare providers are paid for each test and procedure, which encourages increased volume of services but does not consider quality and health outcomes of patients. However, value-based models link payments to quality metrics and overall care of patients. For example, providers may be paid based on preventing complications, readmissions, managing chronic illnesses, patient satisfaction rather than on a per-visit basis. This promotes higher value and affordable care over time.
• Government initiatives: Government initiatives are playing a major role in driving the growth of the global value-based healthcare market. Many governments around the world are pushing for healthcare models that improve patient outcomes and lower costs. For instance, on December 31, 2021, the Center for Medicare and Medicaid Innovation adopted the initial home health value-based purchasing model. The concept was created to help medicare-certified home health agencies across the country improve the quality and efficiency of their treatment.
• Adoption of advanced technologies: The healthcare industry worldwide has witnessed a dramatic shift towards value-based models of care delivery over forecast years. Advanced technologies are playing a key role in enabling this transition by improving outcomes and lowering costs. For instance, artificial intelligence and machine learning (ML) are being utilized for personalized treatment recommendations, predictive analytics, and precision medicine. Healthcare providers can gain deeper insights into individual patients through analysis of their vast EHR and genomic data. This helps deliver more proactive, preventive, and coordinated care.

Global Value-Based Healthcare Market- Opportunities

• Big data integration: Big data integration presents a great opportunity for value-based healthcare globally by helping move from volume to value-driven care. As healthcare systems generate immense datasets from clinical, financial, operational, and patient-reported sources, integrating these disparate sources can provide invaluable insights to optimize value-based care models. By analyzing patterns and making connections across large volumes of patient data, providers can gain a more comprehensive view of health outcomes, costs, and experiences. This enables more precise risk stratification, early detection of high-risk patients, and targeted intervention strategies. Care teams can be better informed to improve quality of care and patient satisfaction, while controlling unnecessary costs for both providers and payers.
• Increase in healthcare IT expenditure: Increasing healthcare IT expenditure presents a great opportunity for the global value-based healthcare market to grow exponentially in the near future. As the whole world is battling the ongoing pandemic, the fundamental importance of investing in healthcare infrastructure and digitizing healthcare services has become abundantly clear. Governments across the world are allocating higher budgets for modernizing their existing healthcare systems by using digital and technological tools.

Global Value-Based Healthcare Market- Trends

• Remote patient monitoring: Increasing trend of remote patient monitoring is greatly influencing the global value-based healthcare market. With remote patient monitoring, healthcare providers can continuously track patients' vital signs and health metrics outside of conventional clinical settings which helps manage chronic diseases more effectively. This allows high risk patients to remain at their homes under close supervision without requiring frequent visits to overwhelmed hospitals or clinics. Doctors and nurses can monitor symptoms remotely and take necessary actions accordingly before conditions deteriorate. This not only improves patients’ quality of life but also reduces healthcare costs significantly by preventing avoidable hospital admissions and emergency room visits.
• Precision medicine: The precision medicine trend is having a significant impact on the global value-based healthcare market. Precision medicine is an emerging approach for disease treatment and prevention that takes into account individual variability in genes, environment, and lifestyle for each person. This allows doctors and healthcare providers to better predict prevention strategies, diagnoses, and treatment options that are tailored to an individual patient. With precision medicine, the focus is shifting from a one-size-fits-all approach to treating illnesses towards more customized care for patients based on their genetic makeup and other important biological factors. Healthcare providers are able to identify which treatments will work best for which patients and even tailor medical treatments to each person's specific needs. This trend towards personalized care enables more targeted interventions and better health outcomes for individuals, thereby leading to higher quality and value-based care overall.

Global Value-Based Healthcare Market - Restraints

• Resistance from healthcare providers: Healthcare providers are facing significant resistance to adopt value-based care models due to concerns over financial risks and changing care delivery processes. There is a deeply ingrained fee-for-service mindset among many physicians and healthcare systems who have practiced and operated under that model for decades. Switching to value-based arrangements that requires taking on new forms of risk that many providers are uncomfortable with, such as being accountable for the overall costs and quality of care for a population of patients rather than getting paid for each individual service. It also necessitates care coordination across settings and specialties, increased data tracking and reporting, and new focus on outcomes and preventative care rather than episodic sick visits. Making such fundamental changes to long-established clinical and business practices poses organizational, cultural and operational challenges.
• Counterbalance: To overcome this restraint, the key market players need to take initiatives in making the healthcare providers aware about the merits of adopting value-based healthcare and its advantages in the long run thereby aiding in the market growth.
• Lack of interoperability: Lack of interoperability between different healthcare systems and technologies is one of the major barriers restraining the growth of global value-based healthcare market. When medical information cannot be easily and securely accessed and exchanged between healthcare providers, payers and patients, it undermines the fundamental principle of delivering coordinated and high-value care. In a value-based model, cares providers are reimbursed that are based on patient health outcomes instead of traditional fee-for-service model. This requires accurate, comprehensive, and longitudinal data on individual patients that capture their medical history, treatments, outcomes and costs of care across multiple providers over time.

Figure 2. Global Value-Based Healthcare Market Share (%), By Providers, 2024

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Global Value-Based Healthcare Market- Recent Developments 

Service Launch

• On October 17, 2023, Ilant Health, a company purpose-built to partner with employers and government payers to improve obesity treatment through holistic, integrated, and value-based care, launched out of stealth with US$ 3 Mn in funding.
• On April, 26, 2023, Kaiser Foundation Hospitals and Geisinger Health, a healthcare provider, launched Risant Health and a definitive agreement to make Geisinger Health the first health system to join Risant Health to expand access to value-based care in more communities across the U.S.
• On February 15, 2023, Curitics Health’s co-founder launched Curitics Health, a new healthcare technology company that supports value-based care organizations in setting up programs for seamless patient care coordination and engagement and better health outcomes.

Business Development Activities by the Market Players

• On September 12, 2023, Walgreens, a pharmacy store chain, and Pearl Health, a leading provider enablement company, announced a partnership to accelerate the expansion of value-based care in collaboration with community-based primary care physicians.
• On April 19, 2023, CVS Health, a pharmacy company, announced that it had entered into collaboration with Catholic Health, a healthcare company and Catholic Health Physician Partner's ACO, to expand value-based care and health care access for Medicare beneficiaries across the Catholic Health Physician Network in the New York, U.S.
• On March 15, 2023, PointClickCare Technologies, a leading healthcare technology platform enabling meaningful collaboration and access to real‐time insights at every stage of the patient healthcare journey, announced the acquisition of Patient Pattern. The combination of PointClickCare Technologies and Patient Pattern, a software company, will further the companies' shared vision of enabling better care and outcomes for high-needs populations and provide care teams with the solutions they need to successfully operate at the top of their license.

Top Companies in Global Value-Based Healthcare Market

• Baker Tilly US, LLP
• Change Healthcare
• Athena Healthcare
• Curation Health
• UnitedHealth Group
• McKesson Corporation
• Deloitte
• Siemens Medical Solutions USA, Inc.
• Signify Health, Inc. (Sentara Healthcare)
• Humana
• NXGN Management, LLC.

Definition: Value-based healthcare (VBHC) is a comprehensive strategy that aims to ensure the health outcomes which is achieved in patient care and are proportionate to the costs incurred. Under the VBHC approach, the central performance metrics revolve around the improvement in patients' health and the efficiency by which effective care is delivered.