Leveraging value-based care to eliminate surprise medical bills

Imagine this: You go to your mailbox or check your email. You find a medical bill that’s significantly higher than you anticipated—or, even worse, it’s a bill you weren’t expecting to receive at all.

Unfortunately, it’s not an uncommon experience. According to research from the National Library of Medicine, 41% of insured adults say they’ve received a surprise medical bill. It’s a frustrating and often overwhelming moment that leaves people feeling blindsided, powerless, and unsure of what went wrong.

But what if the system wasn’t designed this way? What if there were a different approach that prioritized high-quality care and health outcomes without the unexpected costs? That’s where value-based care comes in.

What is value-based care?

Value-based care is a type of alternative payment model (APM) that rewards providers and health systems for the outcomes of their services rather than the number of services they provide. This means providers are incentivized to improve the quality of care and reduce costs—rather than racking up a long list of tests and treatments.

That’s in stark contrast to a typical fee-for-service model, where insurance companies (and/or patients themselves) need to pay for the care they receive, regardless of the outcome of those services. Every visit, test, procedure, and treatment comes at a cost, even if it’s ultimately unsuccessful or completely unnecessary.

Here’s the simplest way to think about it: With value-based care, you’re paying for quality, not quantity.

4 key drivers of surprise medical bills in traditional care models

Before you can understand exactly how value-based care helps minimize or eliminate surprise medical bills, it’s helpful to look at what causes them in traditional fee-for-service models. Here are four of the biggest culprits.

1. Lack of price transparency

One of the most common causes of unexpected medical charges is the simple fact that patients rarely know what they’re going to pay upfront.

Alarmingly, only 17% of Americans say they understand what to expect on their medical bills. Most don’t see the final cost until after they’ve already received care—when it’s too late for them to shop around, ask questions, or opt out.

So, it’s little surprise that 92% of Americans support greater transparency in healthcare pricing. People want (and deserve) to know what they’re paying for before they commit to footing the bill.

2. Out-of-network specialists

Even when patients do everything “right”—like choosing an in-network hospital and confirming their insurance coverage—many are still caught off guard by medical charges.

Why? Because not every provider involved in their care is guaranteed to be in-network. An anesthesiologist, radiologist, or surgical assistant might not be covered, even if the hospital or primary physician is.

It’s all too common, with more than 20% of patients saying they’ve received an out-of-network bill, often without any warning or opportunity to consent. These unexpected charges can be significant and feel especially unfair when patients have little to no control over which specialists are assigned to their care.

3. Emergencies

In an emergency, patients aren’t concerned with shopping around for in-network providers or confirming their coverage details—they’re focused on getting the care they need now.

Unfortunately, that sense of urgency often comes at a cost. Research shows that one in five emergency department visits results in a surprise bill.

The result? Patients can end up paying significantly more for critical or life-saving care that they ultimately had little to no choice in receiving.

4. Uncoordinated care

When care isn’t well-coordinated between providers, patients often (quite literally) pay the price. Communication breakdowns can lead to duplicate tests, repeated procedures, or even conflicting treatment plans.

This is inefficient and unnecessarily tough on the patient, and it also drives up costs without improving outcomes.

To make things worse, patients might not even realize they’re receiving redundant care until the bills arrive. When providers don’t manage and share information, it creates unnecessary work and unexpected expenses that could’ve been avoided with even a little collaboration.

5 ways value-based care reduces surprise medical bills

The good news? Value-based care addresses many of the above pain points. By shifting the focus from volume to value, this model creates a more predictable, transparent, and patient-centered experience—with fewer surprise medical bills in the mailbox. Here’s how:

1. More preventative care

Prioritizing outcomes means providers focus more on preventative care that reduces the likelihood of urgent, high-cost services down the line. For example, cancer screenings can lead to earlier detection, allowing for a better prognosis and more affordable treatment options. Or, a focus on health and lifestyle habits can reduce the risk of cardiac issues or future heart surgery.

2. Improved care coordination

Providers need to collaborate more closely to achieve better healthcare outcomes. This level of transparency and information sharing helps avoid duplicate tests and unnecessary procedures. This lowers costs while improving the efficiency and effectiveness of care.

3. Strong provider networks

Value-based care models often use provider networks. This means patients get to see high-quality and cost-efficient providers without any surprise, out-of-network bills. For example, Carrum—a value-based centers of excellence solution—connects members to a rigorously vetted network of providers across multiple areas of specialty care, including surgery, cancer, and substance use.

4. Value-based payment models

There are several different payment models that fall under the value-based care umbrella, like bundled payments (where providers receive a single lump sum for all necessary services) and pay-for-performance (where providers get financial rewards for meeting quality benchmarks). All of these incentivize providers to offer high-quality care without racking up costs.

5. Greater transparency

With value-based care, there’s far clearer and more upfront communication around treatment options, coverage, costs, and expectations. Plus, with a focus on the total cost of care (rather than individual tests and procedures), it’s far easier for patients to understand their cost responsibilities.

Understanding the real-world impact of value-based care

It’s one thing to understand the ins and outs of how value-based care works, but it’s another to see the real difference it makes in people’s lives (and budgets). From lower costs to fewer billing headaches, here’s a quick look at the real-world impacts of this model: cost savings, fewer billing disputes, and more predictable spending.

Cost savings

Understandably, one of the most significant benefits of value-based care is its impact on overall healthcare costs.

According to a study by the New England Journal of Medicine, patients who choose a value-based healthcare provider can reduce healthcare costs by up to 11%. A separate study found that patients in value-based care programs saw a 23.2% cost reduction compared to those on original Medicare.*

Employers stand to save too. Companies that have adopted value-based care models report an average 25% reduction in their employees’ total cost of care.

Fewer billing disputes

Because value-based care emphasizes transparency and clearer communication about costs and treatment options, patients deal with fewer surprise charges.

This means less confusion and significantly fewer billing disputes, making the healthcare experience smoother and less stressful for everyone involved.

More predictable spending

Healthcare costs are notoriously tricky to anticipate—not just for patients, but for employers too. In fact, 72% of CFOs identify healthcare costs as the most unpredictable expense within their organizations.

Value-based care helps change that by focusing on the total cost of care rather than individual tests or procedures, allowing both employees and employers to better predict and plan for healthcare expenses.

Increased employee satisfaction

People want value-based care. In one survey, patients said they prefer value-based care over a typical fee-for-service model by a factor of four to one.

A shift to this model leads to healthier and happier employees. When workers see that their employers care about them and their well-being, their satisfaction increases. This improves retention and fosters a more positive culture within your workplace.

Better healthcare (with fewer surprises)

An unexpected medical bill is never a welcome surprise, and it certainly shouldn’t be a typical day at the mailbox. Value-based care offers a smarter way forward, delivering better outcomes while helping patients avoid unnecessary and unanticipated costs.

For employers, that means more predictable spending, fewer disputes, and a healthier, more engaged workforce. For that reason, choosing healthcare partners who prioritize quality over quantity isn’t just good policy—it’s good business.