EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.
How EY can help
-
EY and EY-Parthenon can help you devise a strategy to realize your ambition: powered by technology, shaped by your portfolio and executed by transformation.
Read more
Innovation and investment in value-based care are surging, with more than $25b in related merger and acquisition (M&A) activity in 2021, according to EY research. As market forces propel the US health care system to reward better health outcomes and value over volume, payers and providers are rethinking how to acquire the capabilities needed to keep pace.
Pressures spurred by consumer expectations, government policy and regulations, and the pandemic continue to accelerate the move to value-based care. Employers are also helping drive the transition by partnering with value-focused companies through sponsored plans or by enrolling with networks that are innovating to deliver better employee care at a lower cost.
Making a successful transition from fee-for-service to fee-for-value requires a mix of organizational capabilities, care management processes and technology. For most organizations, this involves such a fundamental shift in the way they operate that it’s unlikely to build all the capabilities in-house and keep up with changing market demands. But M&A isn’t the only answer either.
Health care executives need to guide the transition by first deciding what type of organization they should become to succeed in a market that rewards value-based care. Then they can identify the required capabilities and create the strategic roadmap:
- Define the value-based strategy and capabilities needed to achieve strategic goals.
- Consider where to invest organically and inorganically to acquire the capabilities.
- Tailor the integration approach to focus on the right priorities.
$25b in deals bring value-based health care capabilities
EY research identified 25 deals that targeted acquiring value-based care capabilities. Although a few megadeals focused on home care delivery networks, the remaining investments are spread across a broad mix of other capabilities needed to implement value-based care (VBC) models.