The Shift to Value-Based Healthcare: Preparing Future Leaders for Career Longevity

Healthcare in America is always changing. 

“Value-based care is steadily gaining ground across the healthcare industry. With payers, providers, investors, patients and technology companies joining in the effort, there are no signs that value-based care adoption will slow down,” writes Michael Pattwell, principal consultant at healthcare technology company Edifecs.

Healthcare’s overlapping segments require expertise in the coordination of services, reduction of potential redundancies, elimination of errors that lead to waste, avoiding over-prescribing medications, decreasing fraud, and increasing access for marginalized and underserved communities. 

An MBA in Healthcare Administration from Baylor’s Hankamer School of Business prepares leaders and future leaders with the expertise they need to succeed in spite of continued industry and political changes.

While some might read “value-based healthcare” and think “cheaper or more efficient,” CMS defines it as “health care that is designed to focus on quality of care, provider performance and the patient experience.” 

The “value” in value-based care refers to what is most important to the individual client, that is, what they – rather than the insurance company or government – value the most. The American Medical Association says value-based care is “aligning incentives and payment” toward more “evidence-based, preventative and whole-person care.” 

This shift to value-based care, currently happening in the world’s wealthier nations, is being driven by numerous factors, including rising healthcare costs, policy and regulatory changes, advances in technology, patient expectations and involvement, provider incentives and accountability, and global influences. Potential applicants seeking a world-class education for a healthcare career will find Baylor’s Executive MBA among the best healthcare MBA programs in the U.S. 

1. Rising healthcare costs

The need to understand what drives the cost of healthcare cannot be overstated. It affects those involved in planning care and those delivering it. This is the knowledge base required to effectively manage administration in a healthcare entity. 

“This spectrum includes all stakeholders, including, but not limited to providers, governmental healthcare programs, commercial payors, ancillary providers and those involved in the manufacturing, marketing and distribution areas,” said Pat Souter, JD/LLM, adjunct faculty at the Business School. “It is not as simple as assuming only the typical components of cost like inflation. Governmental and payor mandates, the cost of innovations, insurance liability coverage costs and addressing the need to provide additional services all equate with such rising costs.”

Forest Kim, PhD, executive director and clinical associate professor at the Robbins Institute for Health Policy and Leadership at the Business School, further emphasized the issue.

“The current, predominantly fee-for-service payment model has resulted in paying providers for output versus paying them for quality outcomes or for keeping patients well,” Kim said. “This has contributed to growing national health expenditures of $4.9 trillion, representing almost 18 percent of Gross Domestic Product, with variable quality of care.”

2. Policy and regulatory changes, 

Because American healthcare is regulated at federal, state and local levels, understanding changes as they happen is a goal for all Healthcare MBA students. The acronyms alone – ACA, MACRA, HSA, CMS, DHHS – are just a start of learning the many connected agencies involved in the delivery of care and reimbursement for health services. 

“Our program explores the regulatory nature of healthcare administration, providing a level of knowledge to define these acronyms and their underlying subject matter,” Souter said. “One possessing this information will then have a better grasp on the policy and regulatory environment and be able to anticipate changes that are commonly made by federal and state authorities and proactively react to them.”

As Americans grow more concerned about the growth of the federal deficit and the stability and solvency of long-depended-upon government programs like Medicare and Medicaid, there is renewed talk about reducing costs. 

“The One Big Beautiful Bill Act, endorsed by President Trump and passed by the House of Representatives, contains major cuts to Medicaid, which would disrupt value-based care models in state Medicaid programs,” Kim said.

3. Tech advancements

Cost increases lead to cost-cutting, and cost-cutting is one advantage of technological advances. The digital signing service Docusign says, “One of the simplest and most effective ways to cut costs within the company with the support of technology is to reduce material costs.” 

4. Evolving patient expectations and active participation in their own healthcare

Value-based care requires more than system changes; it also requires behavioral changes. In Baylor’s Robbins Healthcare MBA program, Ann Mirabito, PhD, associate professor of Marketing at the Business School, teaches her classes three ways to influence behavior: force, education and incentives. 

“In healthcare, force often backfires,” she said. “It may get compliance, but at the cost of trust. Education doesn’t mean overwhelming patients with information; it means delivering the right message to the right person at the right time, in the right way. That’s something we teach our students how to do. And incentives aren’t about manipulation – they’re about understanding what’s actually, rather than apparently, blocking behavior change.” 

5. Provider incentives and accountability

“Incentives matter is an economic truism,” Kim said. 

Healthcare MBA students learn how provider reimbursements affect value-based care models addressing healthcare costs, quality and access.

“Students learn to evaluate provider financial risk under different payment models,” he said. “For example, some value-based care models include both upside (i.e., rewards) and downside (i.e., penalties) for the amount and quality of care a provider gives.”

6. Global influences

The shift to value-based care globally is moving slowly and is currently seen mostly in wealthy countries. 

“Most VBHC initiatives were found in high-income countries, especially the U.S., with far fewer in middle-income nations,” writes Briana Contreras. 

But as more countries adopt a shift, there are potential benefits to US consumers. 

“Healthcare innovation is dependent on the cross-border exchange of information to develop best practices,” Souter said. “It is not just that other countries benefit from American advances. Rather, those countries provide the United States with their innovations and expertise, directly impacting our healthcare system.” 

Why a Robbins Healthcare MBA from Baylor?

With many schools from which to choose, why the Robbins Healthcare MBA?

• Robbins MBA students learn tools to help people make better decisions. “We equip students with tools to uncover barriers and design solutions that make healthy choices more attainable and sustainable,” Mirabito said.
• They learn to take a systems perspective. “They learn how to examine the social, economic and political forces that shape our healthcare system,” Kim said. “This includes both traditional fee-for-service and newer value-based reimbursement models.”
• They learn to comprehend the interrelated factors. “Students in Baylor’s Robbins Healthcare MBA examine health policies at the national, state, and local level, and their impact on our healthcare system’s shift to value-based care,” Kim said, “while examining and understanding how technology enables healthcare disruption.” 

The Baylor Executive MBA in Healthcare Administration is structured for small-cohort classes, one weekend a month in Dallas. Learn to analyze real-world case studies, develop a servant-leader mindset and present yourself like an executive. Click here for more information about Baylor's Executive MBA (EMBA) for healthcare professionals.

What’s Next?

As policies in healthcare affect the trajectory of the transition to value-based care, economics come into play as well. Forest Kim provides his expertise on the 5 major focus areas in the economics of healthcare.

Baylor Executive MBA’s residencies provide real-world insights for students in the healthcare field. Learn more about Shawn Williams’ experience and how it shaped his career.

Value-based healthcare has opened the door to more impactful healthcare on the home front. Angel Vargas discusses how his MBA from Baylor helped him break into this field.

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