As the U.S. healthcare system continues its gradual shift toward value-based care, policymakers and providers alike are confronting a persistent question: what does it actually mean to be “ready”? For Joanne M. Frederick, CEO of Government Market Strategies, the answer lies not in contracts or compliance—but in something far more fundamental.
“Readiness starts with visibility,” Frederick explains. “Providers need to be able to see and understand their own cost of care at the level where care is actually delivered.”
The Visibility Gap
Despite years of momentum behind value-based models, many providers still lack a clear understanding of their true cost structures. Instead, they rely on averages, billing charges, or high-level financial data—figures that often fail to reflect the realities of patient care.
Frederick argues that this disconnect is at the heart of the industry’s struggle. “What real preparedness looks like is having visibility into both cost and outcomes across an entire care pathway,” she says. “It’s about understanding how staffing, time, and resources come together for a specific patient population—and how that translates into results.”
Without that level of insight, providers are effectively being asked to assume financial risk without knowing what drives their performance. “That’s not readiness,” she adds. “That’s guesswork.”
A System Built on Financial Pressure
Much of value-based care, Frederick notes, has been implemented as a financial construct—focused heavily on risk-shifting through payer contracts. While this has accelerated adoption, it has also created an imbalance.
“We’ve emphasized the financial mechanisms without equally investing in the operational capabilities needed to manage that risk,” she says.
This is where Frederick sees a critical role for the Centers for Medicare & Medicaid Services (CMS). Beyond setting payment models and applying financial pressure, CMS could do more to support provider readiness by incentivizing investment in cost measurement tools, aligning outcome metrics, and allowing time for systems to build internal capabilities before facing full downside risk.
“Readiness isn’t about willingness,” Frederick emphasizes. “It’s about visibility and control.”
Shared Responsibility—But Not Equal
When it comes to responsibility for advancing value-based care, Frederick is clear: it is shared, but not evenly distributed.
CMS has played a pivotal role in setting direction, while both public and private payers have shaped how value-based care is implemented—often by pushing financial risk downstream to providers.
“That approach has moved the market forward,” Frederick acknowledges, “but it has also reframed value-based care as a financial mechanism rather than a transformation in how care is delivered.”
In some cases, she adds, contracts become tools of leverage rather than catalysts for change.
Providers, meanwhile, remain at the center of value creation. “They are ultimately responsible for delivering outcomes,” she says. “But too often, they’ve been asked to take on risk without the tools to truly understand or manage it.”
The real challenge, then, is not just shared responsibility—it’s alignment. Payment models and policy must support the development of operational capabilities within care delivery systems, rather than simply redistributing financial risk.
Signs of Progress
Despite these challenges, Frederick sees reasons for optimism. A subset of organizations is beginning to demonstrate what effective value-based care can look like in practice.
“The ones making real progress are treating value-based care as an operational discipline, not just a contract,” she explains.
These organizations are investing in detailed cost analysis at the care pathway level, linking those insights to patient outcomes, and using the data to redesign care delivery. Many arrived at this approach out of necessity—after realizing that contract structures alone were insufficient.
“They’ve focused on reducing variation, standardizing care where appropriate, and being much more intentional about how resources are used,” Frederick says.
The results, she notes, often extend beyond financial performance. Improved coordination and more deliberate care processes tend to enhance patient outcomes and experience as well.
Reclaiming the Original Vision
For Frederick, these early successes reinforce a broader point: the promise of value-based care is real—but only when it is built from within.
“It works when the capability exists inside the delivery system,” she says. “Not when it’s just layered on through contracts.”
As healthcare leaders and policymakers look to the next phase of transformation, her message is clear: true readiness cannot be mandated or negotiated into existence. It must be developed—through visibility, alignment, and a fundamental rethinking of how care is delivered.