Health Plans

ZS studies with health plans show VBC contracts drive differentiated patient outcomes

By Peter Manoogian, Anand Rampuria, Amy Goodman, Zoe Colman, and Brooke Kulusich

Oct. 24, 2023 | Article | 5-minute read

National health plan finds value-based care contracts drive differentiated patient outcome

Over the past 10 years, the healthcare industry’s transition from volume to value has been slower than many forecasted, and reported outcomes have been mixed. One frequently cited challenge is the diversity of health plan contracts that might be represented in one provider practice and providers’ desire to treat all patients according to the highest standard of care, regardless of any financial incentives.

Recent findings from our work with health plan clients provided strong evidence that value-based care (VBC), or risk-based, contracts can be associated with differentiated patient outcomes. These findings pose a critical question: Beyond the contract itself, what additional elements are needed to ensure VBC contracts actually shift provider behavior? In this piece, we’ll discuss the operational mechanisms health plan leaders in provider engagement, clinical programs and VBC innovation can implement along with contracts to shift patient outcomes.

“Beyond the contract itself, what additional elements are needed to ensure VBC contracts actually shift provider behavior?”

The impact of VBC status on medication adherence

Our approach leveraged third-party, payer-agnostic claims to analyze drivers of our clients’ performance relative to competitors for pharmacy medication adherence measures in the Centers for Medicare & Medicaid Services’ (CMS) Star Ratings program. We used advanced analytical models, including machine learning algorithms, to define various medication adherence patient journeys and the factors associated with positive or negative adherence for each cohort.


To dig into the role of VBC contracting at one client, we segmented providers who were participating in a VBC contract with our client versus all others. When we compared medication adherence rates between these provider segments, those who were in VBC contracts had significantly stronger adherence than others. (We defined adherence rates as the percentage of patients with a proportion of days covered greater than 80% in scope medications as defined by CMS medication adherence measures. Our analysis included diabetes, hypertension and cholesterol medication adherence measures. We found consistent results across these three measures.)

FIGURE 1: Medication adherence by provider contract type for a leading national health plan

Next, we conducted a deeper analysis of VBC providers to compare results across their individual patient panels, which included both patients covered by our client’s VBC contract and other payers and contract types. For the majority of these VBC providers, we observed higher adherence outcomes for those patients who were covered by our client’s VBC contract versus all other patients in each provider’s panel. In other words, patients who were covered by a VBC contract showed stronger adherence outcomes than other patients, even when they were treated by the same provider. This analysis showed statistically significant evidence of positive adherence outcomes linked to VBC contract participation.

FIGURE 2: VBC providers have higher adherence for patients covered by VBC contracts

It wasn’t just the contract itself driving these results. Enabling mechanisms such as data, operational model and individual incentive compensation are needed to deliver the last mile and shift practice patterns.

  • Enablers to support providers with data- and technology-driven insights and solutions

Health plans can support providers in VBC delivery by equipping them with the tools, data and resources they need to succeed. Data-driven insights into patients’ medical and social histories offer a complete picture of the patient and point to unmet needs in their care.


By investing in technology-enabled solutions that harness real-time data, automate workflows and streamline collaboration among the care team, health plans can empower providers to deliver optimal impact. In the example above, the health plans’ market-leading interoperability solutions play a key role in proactively flagging its patients at risk of non-adherence and sending this list to providers for additional outreach.

  • Ensure operating support for VBC objectives

In designing an effective VBC model, health plans should consider what operational support providers require. Elevating the roles of non-provider care team members such as case managers, patient liaisons and call center agents is key to create capacity and focus. These associates play a critical role in connecting patients with the care and resources they need. Health plans can inventory their current VBC operating models and consider how they can help provider practices put in place the necessary capabilities, processes and personnel.

  • Align individual provider incentives with shared goals

Aligning individual provider compensation with practice-level VBC contracts and objectives also can help obtain provider buy-in and drive behavioral changes. Despite the recent growth of VBC arrangements, the majority of individual provider compensation plans still put marginal emphasis on quality and VBC outcomes.

This approach is key for physicians, as well as for front-line, non-clinical and clinical staff. Provider practices should review incentive models to ensure practice-level performance goals flow down and align with individual incentives. 

Looking ahead

Our analysis provides encouraging evidence that VBC arrangements can drive differential outcomes. Looking ahead, we see growing momentum on the move to value—including CMS’s recent commitment to ensure the majority of beneficiaries are under accountable care by 2030.  Health plans and providers will need to continue to innovate and partner on a range of capabilities to successfully transition from volume to value—including data- and technology-driven insights, operating model and individual incentive opportunities. 

Add insights to your inbox

We’ll send you content you’ll want to read – and put to use.

About the author(s)