Thank you to B Capital’s Adam Seabrook for saying the quiet part out loud. We talk ad nauseam about value-based care at events and conferences, but the fee-for-service payment model continues to dominate. Most of us agree that value-based care is where healthcare should be going in the future, but progress has been slow because it’s easier said than done. It’s my personal view that until we can put pen to paper and explore what is required to invest in value-based care – longer timelines, heavier capital requirements, and so on – then the opportunity won’t get the allocation it deserves. And Adam has done that, while honestly asking the question of whether venture investors can make Power Law returns by investing in value-based care.
As a follow-up to this column, I’ve invited Adam and a panel of experts to join me on a LinkedIn Live to discuss venture capital and value-based care, as well as alternative funding sources. Stay tuned!
By Adam Seabrook
Adam Seabrook is a Partner at B Capital, where he’s been investing in disruptive healthcare technology companies for the last decade. Prior to B Capital he worked at two early stage healthcare companies.
The U.S. health insurance industry has been working on transferring financial risk to providers for at least two decades, even as progress has been slow1. The goal of all of this change is to better align provider incentives with the health outcomes of the patients they serve. If fee-for-service (FFS) entices providers to do as many exams and procedures as possible to maximize revenue, then value-based care (VBC) flips that incentive by encouraging providers to control the cost of care through a share of the profits derived from treating a population of patients efficiently. There’s more to gain than just affordability; there’s the potential to offer higher-quality care, as well as services that are not traditionally billable in a fee-for-service construct.
Analyzing the Trailblazers in VBC
For investors, it sounds like a lucrative opportunity and the proposition has attracted billions of dollars of venture and growth capital. Let’s take a snapshot of the largest companies in the value-based care arena, and the capital they’ve accumulated to date:
Note: Equity only; source: PitchBook
Become a paid supporter to see more
This newsletter is made possible by the paid contributions of users like yourself. Join hundreds of other healthcare professionals, investors, and entrepreneurs that have access to all of our analysis, reporting, opinions and interviews
UpgradeA subscription gets you:
- Subscriber-only posts and full archive
- Post comments and join the community
- Deep dive content and analysis
- Access to remote and in-person events