From Fee-for-Service to Value-Based Care: Insights from a Healthcare Pioneer

The American healthcare system stands at a critical juncture. Despite decades of innovation and investment, healthcare costs continue to rise while outcomes remain inconsistent. 

The solution, according to healthcare veteran Nicole Bradberry, lies in fundamentally restructuring how we pay for and deliver care, moving from a fee-for-service model to true value-based healthcare. 

With over 30 years of experience spanning major payers, ACO formation, and healthcare transformation, Bradberry offers unique insights into what works, what doesn't, and where the industry is headed.

The Origins of Value-Based Care: Learning What Payers Couldn't Do

Bradberry's journey into value-based healthcare began during her tenure at major insurance companies like Cigna and UnitedHealthcare. 

Working on affordability programs at a time when rising healthcare costs were forcing employers, especially small businesses, to drop coverage, she led initiatives that ultimately shaved approximately $1 billion off UnitedHealthcare's fully insured spending.

However, these successes revealed a critical limitation: payers struggled mightily with patient engagement. Despite investing heavily in clinical programs and employing talented nurses, engagement rates plateaued at just 10-12%. 

The realization was sobering, even the most sophisticated programs meant nothing if patients wouldn't participate in them.

This limitation led to a pivotal insight: the solution wasn't within the payer organization. It required getting closer to the individuals who held trusted relationships with patients, their primary care physicians. This understanding would become the foundation for the accountable care movement.

Building the ACO Infrastructure Before It Had a Name

In 2009, well before the Affordable Care Act established the framework for Accountable Care Organizations, Bradberry and colleagues founded Rice Health to focus on patient-centered medical home enablement. 

The concept was ahead of its time, bringing sophisticated medical cost management programs and wrapping them around physicians in ways that would allow them to operate differently and share in the rewards of improved outcomes.

The challenge was timing. Without formal risk-based payment models or regulatory support, gaining momentum proved difficult. While the company achieved notable successes, taking over primary care for Boston Medical Center and working with networks in Texas, the lack of meaningful financial incentives limited widespread adoption.

Everything changed with the Affordable Care Act and the launch of the Medicare Shared Savings Program in 2012. 

Suddenly, the infrastructure for value-based care existed. Bradberry founded Orange Health (later rebranded as Citra Health), which became one of the first ACO enablement companies in the country. 

The company built one of the first ACOs in North Florida and eventually managed approximately 12 ACOs nationwide before being acquired by Cedar Gate.

Why Florida Became an ACO Success Story

Florida's emergence as a value-based care leader wasn't accidental. Bradberry, who founded and still leads the Florida Association of ACOs after 13 years, identifies several factors that contributed to the state's success:

1. Longer history with managed care: Florida had experience with managed care models that other states lacked
2. Independent physician entrepreneurs: The market was led by physicians rather than hospital systems, avoiding some of the inherent conflicts of interest that hospitals face when they benefit from fee-for-service volume
3. Early adopters who proved the model: Successful organizations like Beach ACO and Millennium demonstrated that the model could work financially while improving care

The results speak for themselves. While national ACO savings rates have historically hovered around 30-40%, Florida has consistently achieved much higher success rates. 

In recent years, approximately 70% of Florida ACOs generated savings, with that number reaching 92% in the most recent reporting period.

The Doctor Dilemma: Engagement Without Burnout

One persistent challenge in value-based care is physician capacity. Primary care doctors were already overwhelmed, seeing more patients, dealing with increasing complexity, and having less time per patient. 

How could they possibly take on the additional work of population health management and care coordination?

The answer, Bradberry explains, isn't to transform doctors but to enable them to work at the top of their license. This means:

• Building teams around physicians: Care coordinators, population health analysts, and other specialists handle tasks that don't require a medical degree
• Providing better pre-visit preparation: When doctors walk into an exam room armed with information about prior diagnoses, care gaps, risk factors, and recent hospitalizations, they can practice more effective medicine in the same amount of time
• Shifting the financial model: Moving  tuesdaydollars from hospitals back to primary care creates the resources to build these supporting teams

The concept of "top of license" practice is crucial. Doctors went to medical school to diagnose and make clinical decisions. 

Everything else, scheduling, care coordination, medication reconciliation, patient outreach, can and should be handled by other team members. 

This approach makes doctors more efficient without requiring them to see more patients or work longer hours.

The Bridge Code Challenge: Transition or Trap?

As practices transition from pure fee-for-service to value-based care, CMS created "bridge codes", billing codes like Chronic Care Management (CCM), Remote Patient Monitoring (RPM), and Annual Wellness Visits (AWV) that help fund the infrastructure needed for population health management.

However, these codes present a critical strategic decision point. Some practices view them as simply additional revenue streams, another fee-for-service opportunity to maximize billing. This approach misses the point and can actually trap practices in a transitional state rather than moving them toward true value-based care.

The proper approach, according to Bradberry, is to:

1. Start with the end goal: Envision what the practice looks like when every patient is under a robust value-based care contract
2. Use bridge codes strategically: Treat the revenue from these codes as investment capital for building new workflows, hiring care coordinators, and implementing population health technology
3. Target the right patients: Focus these programs on patients who will benefit most from intensive management, not just those easiest to enroll
4. Negotiate better contracts: Use demonstrated capability in managing bridge code programs as leverage to negotiate more complete risk contracts with payers

The distinction is subtle but crucial. Bridge codes should fund transformation, not become the destination.

The Skilled Nursing Facility Opportunity

SNFs represent a massive untapped opportunity in value-based care, yet most remain locked in traditional per-diem models with misaligned incentives that prioritize bed days over patient outcomes.

The Value-Based Alternative:

• A facility with 5,000 attributed patients at $10,000 benchmark manages $50M in medical costs
• Long-term care patients with higher acuity: $60K-$100K benchmarks per patient

Proven Results:

• Sound Physicians (13,000 lives): $80M savings
• Long-term care facility (10,000 lives): $40M savings
• Bluestone (5,700 lives): $26M savings

SNF operators can capture these savings by forming or joining ACOs, creating entirely new revenue streams while delivering better care.

Why Healthcare Costs Remain High

Medicare Advantage Misalignment: Years of rules rewarding sophisticated risk coding over actual cost reduction. Organizations became expert at making patients "sicker on paper" without improving outcomes.

Consumer Disconnect: Employer-based insurance removed consumers from cost considerations, allowing unchecked cost increases through payer-provider negotiations.

Regulatory Constraints: The ACA eliminated high-deductible catastrophic options that could work for healthy populations managing routine care.

Input Costs: Medical devices and pharmaceuticals cost dramatically more in the U.S. than other developed countries for identical products.

The Prevention Frontier: Root Cause Healthcare

Current healthcare is fundamentally "sick care." Even value-based care primarily manages disease more efficiently rather than preventing it. A truly transformed system would:

• Make prevention the default, not an afterthought
• Cover "food as medicine" and "movement as medicine"
• Proactively address toxin exposure and nutritional deficiencies
• Focus on keeping people well, not treating them once sick
• Start in childhood with healthy habits around food, exercise, and screen time

AI's Healthcare Revolution

Current Applications:

• Patient Engagement: AI reaches entire panels for scheduling, care gaps, and preventive reminders
• Call Handling: Companies like SENA Health manage 80% of inbound calls, even with older populations
• Clinical Support: AI surfaces relevant patient data before appointments
• Patient Education: Translates complex instructions, explains medications, reduces readmissions

The adoption curve is steep. Even teenagers indicate they'd consult AI before human physicians for minor concerns.

The Path Forward

Successful Models:

• Build care teams around physicians
• Use bridge codes strategically to fund infrastructure
• Embrace risk-based contracts that align incentives
• Leverage AI to scale previously impossible interventions

Next Frontiers:

• Bring SNFs fully into value-based models
• Expand beyond illness management to true prevention
• Reduce fundamental healthcare input costs while improving outcomes

The Message: The time for waiting has passed. Tools and payment models exist to fundamentally improve care delivery and financial sustainability. Early adopters are proving the model works. The question is whether you'll lead or follow the transformation.