The VBC Paradox: How Health Systems Can Balance Inpatient Revenue With Value

When the conversation shifts toward value-based care (VBC), hospital systems find themselves in a delicate balancing act. On one hand, VBC strategies compel providers to prioritize preventive, coordinated, and holistic care to improve outcomes and reduce avoidable acute care utilization. On the other, hospital systems are largely embedded in a fee-for-service (FFS) environment, where inpatient admissions and emergency department visits often represent core revenue streams. This begs the question – are value-based care strategies at odds with hospital systems revenue goals?

Value-based care, at first blush, feels more aligned with payer interests than those of a hospital-based health system. Avoidable hospitalizations — many of which stem from poor chronic disease management, fragmented ca