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Value-based health care focused on improving patient outcomes while controlling costs can “power” past traditional fee-for-service when its design is led by clinicians and centered on patients, Vanderbilt Health’s Office of Population Health has reported.
The report, published April 15 by the New England Journal of Medicine in NEJM Catalyst, summarizes the first five years of experience with MyHealth Bundles, Vanderbilt Health’s innovative approach to episode-based payments that cover everything patients need to receive optimal care for several high-cost conditions, from diagnosis to recovery.
Under this novel arrangement, which launched in 2020, Vanderbilt Health contracts directly with employers and assumes “two-sided risk” — financial responsibility for both the cost and quality of care provided to patients.
By eliminating prior authorization, utilization management and other “arbitrary hurdles” common to fee-for-service agreements, and by covering comprehensive clinical and support services, MyHealth Bundles have cut waiting times, improved maternity care and nonsurgical management of osteoarthritis, and saved patients and employers millions of dollars.
“This model represents a viable pathway for health systems intent on transcending transactional approaches and moving toward truly transformative value-based care,” the authors wrote.
Contributors to the report included first author Ruchika Talwar, MD, MMHC, medical director of the Episodes of Care office, and senior author C.J. Stimson, MD, JD, Executive Vice President for Population Health.
Other contributors were Chelsea Parris, MSN, RN, interim director of the Episodes of Care office, and Robert Sinyard, MD, MBA, clinical instructor in the Division of Acute Care Surgery at Vanderbilt Health.
MyHealth Bundles are directed at self-insured employers that are most vulnerable to the inexorable rise in health care costs. Prospective, transparent and predictable prices are offered for all services related to specific bundles of care. Patients incur low or zero out-of-pocket expenses, regardless of how many services they use.
In designing the bundles, “we begin by asking our clinical teams to imagine a world without any fee-for-service rules,” the authors wrote. “The approach empowers physicians to see the program as an opportunity to regain control over how they practice medicine.”
Large-scale surveys and small focus groups ensure that “the lived care experience of our patients is at the heart of our value transformation efforts,” they continued. Navigators advocate for and support patients at each step of their journey, from helping to schedule appointments, to coordinating plans for postacute care.
Through December 2025, more than 11,000 patients participated in one or more of nine MyHealth Bundles: prenatal and postnatal care, cochlear implant surgery, spine surgery, hip and knee surgery, surgical weight loss, osteoarthritis and shoulder pain, kidney stone treatment, substance use disorder, and cardiac arrhythmia.
Early results are encouraging: For participants with hearing loss seeking a cochlear implant, the MyHearingHealth bundle slashed the average wait from initial consultation to surgery from 152 days to just two days.
The MyMaternityHealth bundle, which covers a breadth of clinical and supportive services for mothers and newborns from the first prenatal visit to three months after delivery, reduced the overall cesarean section rate by nearly 5% compared to the market benchmark.
Only 6.1% of participants in the 12-month knee osteoarthritis bundle required a total knee joint replacement to successfully alleviate their pain and address their condition, well below the market average of 16.1%.
Even more impressive: The hip osteoarthritis bundle cut the percentage of patients undergoing total hip joint replacement from an average of 32% to 13%.
During the first two years of the program, patients collectively reduced out-of-pocket spending by $3.4 million, while employers saved an average of $1.4 million per year from the largest-volume bundles: surgical weight loss and prenatal and postnatal care.
“Specifically, we have reduced diabetes-related spending by 40% through bundled delivery of weight-loss solutions,” the authors wrote. The MyMaternityHealth bundle, which avoids neonatal intensive care unit admissions and lowers the C-section rate, saved one employer more than $1 million in health costs in 2024 alone.
“These early data send a clear signal,” they concluded. “Value-based care delivers on the promise of a better health care experience for all stakeholders.”
