Lessons Learned from the Transition from Volume to Value

Bonnie B. Blanchfield
Gregg S. Meyer
Anjali Thakkar
Michelle Pai Howell
Catherine J. Meyer
Peer-Reviewed Article
October 2020


This article describes factors that support health care organizations in transitioning from volume- to value-based payment.


While the financial challenges of COVID-19 may lead to greater appeal of value-based payment, many accountable care organizations (ACOs) have been reluctant to assume downside risk, which results in providers paying a portion of losses when costs increase. To learn what would make the transition from volume- to value-based payment more successful among hospitals and health systems, the authors reviewed findings of national surveys of ACO leaders as well as case studies describing the characteristics of ACOs.


The decision to enter into value-based contracts depends on organizational context, a variety of multidimensional factors, and is typically driven by key executives. Senior finance leaders were the primary driver of decisions to enter into ACO contracts, with practical assessments of financial risk being an important factor for their support. Other criteria that informed ACO decisions to move to value-based payment included: history of experience with risk, participation of other regional organizations, investments in infrastructure, potential for the transition to address other issues such as strained capacity, and financial position. This article outlines two pathways to move toward value-based payment and notes the key factors for success in transitioning payment models.


Health care organizations that are still primarily using volume-based payment may benefit from understanding the different pathways for a successful transition to value-based payment approaches. 

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