U.S. Value-based Healthcare Service Market Size, Share, Report 2025 to 2034

U.S. Value-based Healthcare Service Market Size and Growth 2025 to 2034

The U.S. value-based healthcare service market was valued at approximately USD 3.63 trillion in 2024 and is projected to climb to roughly USD 6.92 trillion by 2034, translating into a compound annual growth rate of 6.66% across the period from 2025 to 2034.

Nearly one in two Americans now lives with a chronic illness, from diabetes to heart failure, so the healthcare system urgently needs models that prevent complications, manage these conditions over years, and catch problems early-same objectives that guide value-based programs like Accountable Care Organizations, bundled-payer contracts, and patient-centered medical homes. Federal programs such as MACRA, the Medicare Shared Savings Program and a set of pilot projects under ACMI have sped up the shift by tying provider income to quality measures instead of volume, offering financial rewards when patients fare better. Evidence of that pay-for-performance approach comes from 2021, when MSSP ACOs alone saved Medicare roughly 1.9 billion dollars, a figure that speaks to both efficiency and patient care. The advancement of technology is essential for the growth of value-based care. The pandemic brought 63 times increase in telehealth visits which helped in chronic disease management, in retaining patients, and decreasing avoidable hospital stays by 25%. Now, there is real-time interoperability on the cloud which enables the collaboration of multiple provider teams to manage entire populations of over a million patients. In medical education, Stanford Medicine employs 360° cameras to capture recording clinical simulations which allows for remote participatory lessons for medical students around the globe.

The US healthcare scene is steadily moving away from the old get-paid-per-visit model and toward a value-based system that rewards real patient results. In this new setup, doctors and hospitals work together, use data smartly, and try to lift patient health while trimming costs at the same time. 

Major programs leading the charge are Accountable Care Organizations (ACOs), bundled-payment arrangements, and patient-centred medical homes, each spelling out clear goals and shared rewards. That push has gained extra muscle from rising rates of chronic illness, friendly new government rules, and the rapid growth of apps, telehealth, and other digital tools. Public and private insurers now nudge providers with risk-sharing deals, weaving value-based care deeper into the nation’s health-care makeover.

U.S. Value-based Healthcare Service Market Report Highlights

• The U.S. value-based healthcare sector will expand at a compound annual growth rate of 6.66% between 2025 and 2034, a trend fueled by unsustainable cost rises, regulatory realignment, and stakeholder preference for reimbursement tied to clinical outcomes.
• By component, the software sub-segment is likely to record the sharpest acceleration, with an 8.2% CAGR, as organizations increasingly deploy advanced analytics, population-health dashboards, and interoperable electronic-health-record platforms that meet federal interoperability mandates.
• By delivery-model, the accountable-care organizations (ACOs) are expected to grow at 7.8% per year, owing to their demonstrated capacity to curtail Medicare expenditures while elevating precautions such as hospital readmission rates and patient-reported outcome measures.
• By application, the chronic-care vertical should register a 7.9% CAGR, a progression underpinned by rising incidence of enduring maladies, including diabetes, ischemic heart disease, and obesity-related complications that contribute disproportionate costs to the system.
• By end users, the provider segment-hospitals, physician groups, and integrated delivery networks-forecasts steady growth of 7.6%, reflecting an accelerated pivot toward value-oriented contracts and capital investments in coordinated-care ecosystems.
• By deployment models, the cloud models are attracting accelerated adoption and are expected to expand at a greater-than-8% CAGR, largely because their elasticity, real-time analytics capabilities, and lower total-cost-of-ownership facilitate remote and team-based care delivery.

U.S. Value-based Healthcare Service Market Trends

• Expansion of Risk-Based Payment Models: Across the U.S. healthcare landscape, a notable development is the deeper adoption of risk-sharing payment contracts, with downside-risk agreements now at the forefront. Providers increasingly step beyond standard fee-for-service structures, accepting financial penalties when patient outcomes miss defined targets. This shift urges care teams to manage health more proactively, cut avoidable readmissions, and keep expenses in line. In 2024, the value-based healthcare market in the US is projected to be over $500 billion, with more than 65% of the medicare expenditure linked to the healthcare quality provided. As an example, UnitedHealthcare has reached an agreement to extend full risk capitation contracts to 1.5 million members in 2024.
• Integration of Digital Health and Data-Driven Decision Making: A second major trend is the deep roll-out of digital health tools and data analytics inside value-based care programs. Technologies such as telemedicine visits, remote monitoring dashboards, wrist-worn sensors, and smartphone health apps now support more ongoing, personalized contact with patients, especially those managing chronic conditions. EHRs, care-coordination platforms, and payer systems are becoming better connected through stronger interoperability standards, further smoothing communication across the treatment continuum. Because of these advances, data-driven tactics are fast becoming the backbone of any strategy aimed at meeting the quality and cost targets baked into value-based contracts. The United States has over 90% of hospitals using certified EHR systems which improves the speed of data sharing and coordinated care. Aetna reported $150 million in savings for 2024 due to better data exchange and interoperability in value-based care program.

Report Scope

U.S. Value-based Healthcare Service Market Dynamics

Market Drivers

• Focus on Patient Outcomes and Cost Containment: Value-based healthcare has gained momentum in the United States because policymakers, insurers, and providers agree that the system must achieve two goals at once: better patient outcomes and lower overall costs. Decades of the fee-for-service approach rewarded clinicians for the quantity, not the quality, of services delivered, encouraging fragmented treatment and procedures that patients did not necessarily need. In response, value-based care concentrates on coordinated, preventive, and efficient activities that span hospitals, outpatient clinics, and home support. As insurance premiums and taxpayer expenses climb ever higher, stakeholders feel urgent pressure to shift reimbursement so that providers earn more when patients stay well, rather than waiting until complications arise. Hospitals using value-based care have cut down avoidable readmissions by up to 20% and reduced unnecessary imaging costs by USD 3 billion a year. For instance, Kaiser Permanente made spending savings while expanding preventive health initiatives in 2024.
• Government and Payer Incentives for Value-Based Models: Government programs and insurance-company rules are pushing healthcare providers to think less about the number of patients they see and more about keeping those patients healthy. Federal schemes such as bundled payments, Accountable Care Organizations, and patient-centered medical homes change the old pay-per-visit model by rewarding doctors and hospitals that deliver better care at a lower cost. When clinics hit quality targets or earn high patient survey scores, they pocket bonuses instead of splitting a pie that gets bigger every time someone walks in the door. Also, more than 58% of private U.S. insurer spending was value-based in 2024. For instance, Humana oversaw more than 2.1 million members in value-based care programs and made significant investments in training and technology for providers.

Market Restraints

• Complexity in Implementation and Transition: A key hurdle facing value-based healthcare in the United States is the intricate process of moving away from the long-standing fee-for-service reimbursement system. Such a pivot demands substantial overhauls in technology, daily workflows, and the very culture of the organization. Clinicians and administrators must learn to coordinate care across settings, deploy sophisticated data-analytics tools, and prepare staff for risk-bearing payment arrangements. Many independent practices and smaller clinics simply do not have the capital or technical expertise to undertake these changes in a seamless manner. At the same time, Over 1,300 U.S. hospitals have joined the Medicare bundled payment programs, yet only 48% of these hospitals are net saving, and this sad reality captures the inefficiencies in these provider-based, multi-hospital systems.
• Data Integration and Interoperability Challenges: A major ongoing barrier to effective value-based care is the fragmented system of data sharing and interoperability among providers, payers, and patients. For care teams to coordinate seamlessly, measure outcomes reliably, and manage populations effectively, they need accurate health information in near real-time. Yet many organizations still rely on discrete electronic health record (EHR) systems that communicate poorly-or not at all-with one another. Because of this limited connectivity, patient records remain siloed, complicating efforts to trace care paths, assess provider performance, or flag individuals at risk. 70% of U.S. healthcare executives in 2023 said reporting accuracy and privacy issues are the leading hurdles to value-based care. These issues alone have racked up over 1 billion in missed savings due to inaccurate performance reporting.

Market Opportunities

• Expansion of Personalized and Preventive Care: The movement toward value-based healthcare creates an ideal environment for broadening personalized and preventive care initiatives. By financially incentivizing outcomes rather than volume, contemporary reimbursement frameworks encourage clinicians to focus on early identification, lifestyle modification, and the proactive oversight of chronic diseases. This macro-policy adjustment is inherently compatible with the construction of tailored clinical pathways that integrate genetic predispositions, behavioural routines, and past clinical trajectories. 64 million Remote Patient Monitoring systems are used by American patients, and recent trends show that there is a 15 to 20% reduction in readmissions under the integrated value-based programs.
• Leveraging Technology for Care Coordination and Efficiency: The contemporary landscape presents a compelling angle for health systems to harness advanced digital architectures to refine care cohesion, activate patient partnership, and rationalize workflows. Cloud-fortified health ecosystems, machine-learning-infused analytics, and harmonized health record systems facilitate frictionless exchanges among multidisciplinary teams, fortifying the guarantee that each patient encounters the correct intervention exactly when it is indicated. Virtual visits extend this reach to traditionally underserved populations, such as residents of geographically isolated regions and low-income neighborhoods, reducing avoidable admissions and sustaining continuity across the care continuum. Concurrently, In the United States, high-risk patient group hospitalizations have been cut by nearly 18%, and some accountable care organizations (ACOs) even recouped over $150 per member per month for managed care spending due to focused interventions.

Market Challenges

• Misalignment of Incentives Across Stakeholders: A persistent hurdle in the U.S. value-based healthcare landscape is the clashing incentive structures that exist among providers, insurers, and patients. Although value-based care aspires to elevate quality and efficiency above volume, each stakeholder interprets and rewards value in distinct, sometimes contradictory, ways. Patients, in turn, may drift in and out of these programs because they do not realize how lower cost-sharing or out-of-pocket savings reward preventive action, or because changing established habits feels daunting. In the United States, the value-based healthcare service market is to reach around 4.01 trillion dollars by 2024, which indicates the enormous market potential, however, poorly aligned incentives and inadequate communication frameworks stifle outcome effectiveness.
• Limited Access to Real-Time, High-Quality Data: Nonetheless, multiple major health systems opt for in-house deployment in order to maintain stricter governance over sensitive patient data and to adhere to highly prescriptive internal data protection protocols. Fragmentation between electronic health record platforms blocks the seamless sharing of patient information-especially when a patient moves from one care setting to another. Moreover, delays or errors in claims files and clinical notes can skew performance reports, falsely weight risk categories, and waste chances for early intervention. Without a dependable data backbone, providers fall short of the obligations in value-based contracts and the dual goals of high-quality care and sound finances suffer.

U.S. Value-based Healthcare Service Market Segmental Analysis

Model Type Analysis

Accountable Care Organizations: Accountable Care Organizations (ACOs) stand out as a cornerstone of value-based care across the American health system. An ACO is essentially a voluntary alliance of physicians, hospitals, and ancillary providers who agree to share patient data and treatment plans in order to streamline, safe, and cost-effective care for Medicare beneficiaries. By reducing redundant tests and intercepting errors before they escalate, ACOs aim to spare patients unneeded interventions and curtail overall spending. Providers who meet predetermined quality metrics and demonstrate savings subsequently divide the surplus revenue, creating a compelling financial incentive. As an illustration, the Medicare Shared Savings Program (MSSP) managed to save Medicare 4.3 billion dollars in 2022 which drives the point that ACOs can create a great deal of value through care coordination and managed spending. 84% of its 482 ACOs achieved savings, and 63% of participants earned shared savings.

Patient-Centered Medical Homes: Patient-Centered Medical Homes (PCMHs) shift the spotlight squarely onto primary-care teams and the continuity of care they cultivate over time. Grounded in a holistic, multidisciplinary philosophy, the PCMH model organizes resources around each individual, especially those managing complex, persistent diseases. By fostering regular outreach, coordinated referrals, and symptom-specific education, PCMHs tend to lift patient satisfaction, curb avoidable hospital readmissions, and improve clinical control for conditions like diabetes and heart failure.

Bundled Payment Models: In Bundled Payment Models, the payer issues one fixed fee that covers every procedure, follow-up visit, and rehabilitation session linked to a single clinical episode—think hip replacement or cardiac bypass surgery. 

Others: The Others category catalogues an array of newer experiments, from global capitation and shared-savings arrangements to mixed-value contracts that blend features of the foundational models.

End-user Analysis

Providers: Hospitals, clinics, and integrated health systems constitute the core constituency of value-based care programs. Charged with delivering consistent, high-quality treatment, these entities must also keep overall spending within fixed budgets. Rising demands for better clinical results, paired with public scrutiny of wasteful procedures, push them to deploy sophisticated electronic health records, centralized care coordinators and population-health dashboards. Because this segment commands the largest slice of the market, observers forecast steady, if cautious, expansion as providers pivot away from traditional fee-for-service reimbursement.

Payers: Insurers, including commercial plans and federal programs like Medicare and Medicaid, fill the twin roles of architect and underwriter for value-focused payment models. They establish incentives such as bundled episodes, gain-sharing pools and capitated risk contracts that financially reward caregivers who deliver quality at lower cost. Equally, payers channel resources into advanced data analytics that track clinical outcomes, measure patient compliance and project savings. By doing so, they set uniform benchmarks, ease inter-provider comparability and steadily push the entire system toward more collaborative, outcome-driven practice. For instance, in Maryland’s global budget model—a blend of fee-for-service and capitation where a per-hospital, yearly budget is set for a defined population—Medicare has restrained over 1.4 billion dollars in spending over five years by curtailing avoidable procedures and readmissions.

Patients: Value-based care relies on the assumption that patients will act on the incentives built into the model, and evidence suggests they are doing just that. Consumer-friendly technologies, clearer health records, and dedicated care teams now place patients in the center of the decision-making process, allowing them to shape weekly goals and long-term plans. 

Application Analysis

Chronic Care: Chronic care dominates the healthcare technology market by volume, largely because illnesses such as diabetes, heart failure, hypertension, and chronic obstructive pulmonary disease (COPD) are spreading at an alarming rate. Together, these conditions consume a large share of hospital budgets and require intricate, continuous management rather than episodic treatment. Value-based reimbursement fits chronic care perfectly, since it rewards regular monitoring, seamless care coordination, and active patient participation. By using real-time data and tailored plans, clinicians are financially motivated to head off complications, minimize revisits, and secure durable health gains for patients.

Acute Care: Acute care, in contrast, addresses severe or time-sensitive problems that demand immediate medical attention, including emergency surgery, traumatic injuries, or serious infections. Under value-oriented pay models, acute episodes are now judged not only on clinical success but also on their overall cost and the speed with which patients return to normal activity. Bundled payments are widely applied in this space, especially for predictable surgical paths such as knee replacements or cardiac stenting, since they urge hospitals and surgeons to keep expenditures in check for the entire episode, from pre-admission testing through rehabilitation. Likewise, Medicare’s BPCI initiative for Bundled Payments for Care Improvement lowered payments for episodes of care like knee replacements. Payments for these episode aggregates dropped by 444 dollars per episode, primarily due to reduction in post-acute care and readmissions.

Preventive Care: Preventive care has moved to the forefront of modern medicine, emphasizing early detection and intervention to stop minor health issues from evolving into serious diseases. Core elements include routine screenings, up-to-date vaccines, annual physical exams, and personalized guidance on nutrition and exercise.

U.S. Value-based Healthcare Service Market Top Companies

• Optum
• CVS Health (Aetna & Oak Street Health)
• Cigna
• Anthem (Elevance Health)
• Humana
• Kaiser Permanente
• Evolent Health
• Lumeris
• Health Care Service Corporation (HCSC)
• Cerner Corporation (Oracle Health)
• Epic Systems Corporation
• Health Catalyst
• Innovaccer
• IBM Watson Health
• Allscripts Healthcare Solutions 

Recent Developments

• January 2025: Optum Rx will implement the Clear Trend Guarantee, a pharmacy pricing model that bundles retail, home delivery, specialty medications, and rebates into one per-member monthly rate. By tying that rate to clinical outcomes in the plan population, Optum hopes to enhance price transparency, enable shared savings, and channel prescriptions through pathways that are both efficient and evidence based.
• March 2024: UnitedHealth Groups Optum added to its value-based agenda by bringing more partner physician practices into its network and launching new digital care-coordination tools for clinicians and patients. Together these steps support the Companys goal of moving more than 75 percent of its care encounters to value-based arrangements by the end of 2025.
• January 2024: CVS Health began opening 50 additional value-based primary-care clinics under the Oak Street Health banner, each focused on preventive services and on managing chronic conditions. The new sites will serve Medicare Advantage members through risk-sharing contracts that reward providers for achieving quality benchmarks while controlling total spending.

Market Segmentation

By Component

• Software
• Services 
• Platforms

By Model Type

• Accountable Care Organizations (ACOs)
• Patient-Centered Medical Homes (PCMH)
• Bundled Payments
• Others

By Payer Category

• Medicare and Medicare Advantage
• Medicaid
• Commercial

By Deployment Mode

• On-premise
• Cloud-based

By Application

• Chronic Care
• Acute Care
• Preventive Care

By End User

• Hospitals & Providers
• Payers & Insurance Companies
• Patients