Value-based care is emerging across many specialties, but its success varies widely by clinical and economic context. This piece focuses on three areas, kidney care, cardiology, and behavioral health, where these contexts are particularly prevalent.

With over 160 specialties and sub-specialties in the US, there has been no shortage of venture-funded, value-based specialty care organizations over the last ten years. Examining these specialties, there are several factors that make for an attractive opportunity:

• High-cost: If the specialty is costing insurers and patients a lot of money, there is more opportunity for savings.
• Variable cost: If there’s a significant difference in the amount of money spent on different care pathways, there is more opportunity to reduce costs.
• Variable quality: If there’s a significant difference in the quality of care and patient experience across different care pathways, there is more opportunity to improve quality.
• Discrete condition: If the condition is clearly defined and self-contained, it's easier to attribute costs and outcomes to a specific care team, enabling cleaner accountability under risk-based models.
• Independent specialty: If the specialty is owned and operated independently, rather than by a health system, the independent specialists are more likely to transition to risk.
• CMMI model: The factors above contribute to CMMI’s creation of models, and these models spur innovation.

Throughout this piece, I will highlight the importance of the first bullet, high-cost, because specialties that drive disproportionate spend create the clearest opportunity for value-based models to meaningfully reduce total cost of care.

If a statistic in this section does not have a source, it comes from this PDF 👇

William Blair Report on Specialty Value-Based Care.pdf

Kidney care

Kidney care is well-suited for risk-based models because it is a high cost and discrete condition. In these risk-based models, nephrologists deserve accountability for total cost of care due to the discrete nature of the condition, which policy makers and CMS have recognized.

First, let’s take a look at the cost. Medicare is spending over $50B per year on End-Stage Renal Disease (ESRD), which is roughly 1% of the overall federal budget. The average ESRD patient on dialysis costs roughly $100K per year, and there are roughly 800K ESRD patients (68% of whom are on dialysis).

Next, looking at the condition, Chronic Kidney Disease (CKD) (the precursor to ESRD) affects roughly 15% of the population and is much more prevalent in Medicare (38%). Despite its prevalence, it is estimated that 90% of patients with CKD don’t know about their condition. Kidney disease is a discrete disease state where a specialized care model improves outcomes, reduces costs, and increases patient satisfaction. Deploying this specialized care model, nephrologists often are the quarterbacks of the condition as a relatively independent specialty (not employed by health systems). This dynamic is dissimilar to a condition like diabetes, where Primary Care Physicians (PCPs) manage the condition because of its prevalence, familiarity, and straightforward management protocols. In this care journey, nephrologists and care managers can positively impact care in a number of areas:

• Slowing disease progression
• Increasing optimal starts (beginning dialysis with a permanent vascular access already in place, rather than a catheter)