By Gregg Anthony Masters, MPH, Editor & Fred Goldstein, MS, Principal Host, PopHealth Week on Healthcare NOW Radio
Let’s be direct: value-based care is no longer an option for those still hedging their bets on the longevity of the “do more to earn more” fee-for-service economy. It’s an inevitability. The clock is running.
That, in plain terms, is the message David H. Wang, MD, FAAHPM delivered on a recent episode of PopHealth Week with principal host Fred Goldstein.
“We are nearing a convergence now,” Dr. Wang told Fred.
The systems, incentives, pressures, and technologies that have been pulling in different directions for a generation are perhaps finally and fitfully pulling together. Ready or not.
Dr. Wang is not a bystander to this convergence. He’s a practicing emergency medicine and palliative care physician who has also served as a management consultant, a builder of value-based care programs, and Chief Operating Officer and Chief Medical Officer of Mass Advantage, a provider-owned Medicare Advantage plan. He now serves as Executive Vice President and General Manager of Value-Based Care at IKS Health, a care enablement company working alongside care delivery organizations navigating the operational and cultural demands of risk-based payment. More than 75 peer-reviewed publications. National speaker on complex care. Someone who has stood in every corner of the healthcare ‘triangle” and stopped blaming the other ‘stakeholders’.
The “Iron Triangle” and the ‘Principal-Agent’ Problem
The iron triangle of healthcare, ie, the chronic tension between cost, access, and quality, is familiar territory for students of health policy. What’s less often acknowledged is how thoroughly each stakeholder has convinced itself that the other stakeholders are the dysfunction.
Dr. Wang calls this directly. “We are rife with principal-agent problems,” he said. “We constantly are trying to maneuver within the iron triangle. The challenge between cost, access, and quality… it’s very difficult.” The people doing the maneuvering, he’s quick to note, are neighbors, family members, colleagues who genuinely believe they’re propelling health forward. The dysfunction is structural, not personal.
What’s changed is the financial reality. Healthcare spending is now tracking toward more than 20% of GDP by 2033, per CMS projections. Margins are compressing across the entire landscape. Patient expectations are accelerating. And incumbents who’ve long rested comfortably on legacy FFS revenue streams are being moved, reluctantly or otherwise, toward risk vs ‘gain sharing’. A 2025 survey by NAACOS (the National Association of Accountable Care Organizations) of 168 healthcare leaders found that 64% expect higher revenue from value-based care in 2025 than in 2024, with more than 20% already deriving over half their revenue from fully capitated or downside-risk contracts.
“I don’t think any single person can say, ‘We can keep doing things the way that they are,'” Dr. Wang told Fred. “Value based care is coming for them.”
The Maryland Blueprint
In framing CMS’s role as a convergence catalyst, Dr. Wang pointed to the Maryland All-Payer Model as one of the most instructive experiments in American healthcare finance. Launched in 2014 through an agreement with CMS, the model established global budgets across all 43 of Maryland’s acute care hospitals. Maryland’s innovation is the only all-payer hospital rate regulation system in the nation, with per capita growth caps and quality targets applied simultaneously across payers.
The results exceeded expectations. The Maryland HSCRC documents the five-year model generating $1.4 billion in Medicare savings at Maryland hospitals. The CMS progress report on the successor Total Cost of Care Model found a 2.1% reduction in Medicare fee-for-service spending and a 16.2% reduction in hospital admissions between 2019 and 2021. A qualitative study in JAMA Health Forum identified core success factors: achievable expectations, protected hospital autonomy, close stakeholder communication, and a shared commitment to change.
For Dr. Wang, the Maryland and REACH ACO learnings are now being “baked and expanded” into the next generation of CMS payment mechanisms. He expressed particular enthusiasm for other states adopting similar all-payer structures, a structural inversion of the volume-rewards-volume logic baked into traditional FFS.
VBC as Duet – Not Solo
For care delivery organizations sitting across from payers at the contracting table, Dr. Wang’s framework is at once simple and deceptively hard to execute. Value-based care, he argues, is “a duet”, ie, requiring both the right payment incentives and a serious investment in organizational change management. Neither is sufficient without the other.
He reaches for Upton Sinclair: “It is difficult to get a man to understand something, when his salary depends on his not understanding it.” Healthcare is an apprenticeship model. Clinicians who’ve spent careers practicing in a certain way don’t change because a new contract lands in their inbox.
“Change happens at the speed of trust in organizations,” Dr. Wang told Fred. “No matter what edicts or protocols you may push through, ultimately your end user clinicians are going to look to the person to their left and to their right and take more from their feedback than from any specific mandate.”
This is why Dr. Wang emphasizes prudent readiness assessment, ie, framing critical actions using the ‘Knoster model for complex change’ (a change management framework for evaluating the skills, tools, data, incentives, and culture), before moving from pay-for-performance into two-sided risk arrangements. The revenue from capitation looks enticing.
“But it’s called risk for a reason. It’s not called free lunch.”
AI, ‘Jevons Paradox’, and the Coming Utilization Surge
No honest conversation about healthcare’s near future sidesteps AI, and Dr. Wang’s take is both grounded and, in one key respect, genuinely counterintuitive.
Most AI-in-healthcare discourse fixates on efficiency: lower administrative burden, faster diagnosis, streamlined coding, reduced costs. Dr. Wang accepts the efficiency premise. He challenges the cost conclusion.
He invokes Jevons Paradox, ie, the 19th-century economic observation by William Stanley Jevons that technological improvements in steam engine efficiency actually increased total coal consumption in Britain, because lower costs drove higher demand. A 2025 commentary in The Lancet Digital Health applied this directly to AI in global health, arguing that as inference costs fall, demand surges, and aggregate costs are unlikely to decrease. Research on telehealth has shown similar dynamics: a commercial-claims analysis found that only 12% of DTC telehealth visits replaced other visits, while 88% represented net-new utilization driving up annual per-user spending.
Dr. Wang’s read here is practical, not alarmist. “We have democratized access,” he told Fred. “We’ve enabled an experience that before was very difficult to scale, especially if you were not somebody who lived in the right place at the right time.” An AI-driven utilization surge is, on balance, a good thing – provided organizations operating under risk contracts plan for the volume and the total cost implications that come with it.
The mandate is clear: tools that make access easier must be paired with the clinical culture and data infrastructure that ensure what gets delivered is appropriate, high-value care.
Human-First at IKS
At IKS Health, the operating philosophy is stated plainly: humans should be at the helm of any AI-enabled service. Full stop.
AI handles rote, low-cognition work, ie, intelligent scribing, prescription refill routing, data synthesis, coding support, quality measure performance. Clinical decision-making stays with clinicians. “I don’t know, from a legal or ethical standpoint yet, where the industry has moved toward allowing AI to autonomously influence care,” Dr. Wang acknowledged. The IKS model threads this needle by using AI to extend human capacity rather than replace human judgment.
The practical payoff is substantial. Dr. Wang describes the distribution of clerical burden across clinicians as roughly bell-shaped: roughly 20% manage administrative tasks efficiently and get home on time; another 20% are chronically behind; the broad middle is “just struggling to make it work.” Reducing that burden through orchestrating data, predictive patient engagement, and tools that reduce clerical burden will return clinicians to what they were trained and motivated to do: care for patients.
Burning Out the People We Need Most
The stakes of this conversation are not abstract. The physician burnout crisis has reached levels that now threaten the stability of the entire care delivery system.
The 2025 Stanford/Mayo Clinic/AMA/U-Colorado national burnout study, the most recent in a long-running series, found that 45.2% of U.S. physicians reported at least one symptom of burnout in 2023. After adjusting for age, gender, relationship status, and hours worked per week, physicians were 82.3% more likely to experience burnout than workers in other occupations. A Commonwealth Fund analysis found that more than one-third of burned-out primary care physicians plan to stop seeing patients within the next one to three years.
The top driver? Administrative burden. A Medscape survey of more than 9,200 physicians found 62% cited bureaucratic tasks, ie, charting, paperwork (“pajama time”) as the primary burnout contributor. More than twice the proportion who cited hours. And AAMC projects an 86,000-physician deficit by 2036.
Dr. Wang frames this not as an HR problem but as a strategic crisis. “Even as expectations are rising for consumers, the experience is eroding for clinicians,” he told Fred. “We need people, with courageous hearts to stay in the fields they’re in, to care for us when we all age and need more care.” Restoring the joy of medicine by removing the clerical clutter that obscures it is among the most consequential things enablement organizations can do.
Primary Care: Quarterback or Nothing
Throughout the conversation, Dr. Wang returned to a conviction he holds firmly: primary care providers are, and must remain, the quarterbacks of value-based care. “Whomever is the quarterback of care ultimately has the greatest ability to impact” outcomes, he told Fred. “And that to me is still the primary care provider.”
This isn’t a dismissal of specialty-specific VBC models. Dr. Wang welcomes them, particularly in musculoskeletal, nephrology, and cardiology, where spend is high and outcome variation is significant. But complex patients, which is to say, most high utilizers of care, are rarely single-morbidity cases. They carry “a litany of issues” spanning pharmacologic management, behavioral health, and social determinants. Coordinating across all of those domains demands a generalist at the center.
On which organizational structure is best positioned for VBC success, Dr. Wang was direct: independently owned, physician-operated multi-specialty group practices. Hospital-affiliated groups, he noted, were often first coalesced as referral pipelines. Health plan-owned groups carry inherent payer/provider tension. The culture of genuine group practice with aligned incentives, shared governance, and primary care at the core, is the structure most capable of real accountability for total cost of care.
The Gamification Problem
Dr. Wang is both candid and pointed about a pattern he finds troubling in the VBC landscape: the conflation of risk coding with value-based care.
Some organizations have learned to maximize revenue through aggressive risk adjustment, ie, capturing diagnoses, inflating acuity, gaming quality metrics, without meaningfully improving care. “There’s plenty of folks who have not been doing value,” he told Fred. “They’ve been doing risk coding, and now that game is up.”
He welcomed recent regulatory attention to risk adjustment practices in Medicare Advantage as a necessary correction that will begin to distinguish genuine value creators from financial engineers wearing VBC’s clothes. Health plans, he noted, are tightening contracting terms: quality measures increasingly gate payments rather than serve as separate earn buckets. The bar is rising.
The Road Ahead
“Value based care is at a tipping point,” Dr. Wang concluded. “The [fee for service] incumbents who have had strong market positions may have been able to put their heads in the sand and try to weather the storm. With the margin pressures across the board… I don’t think any single person can say, ‘We can keep doing things the way that they are.'”
The tools exist. The models are proven. The Maryland experiment demonstrated that cross-stakeholder alignment around a shared goal is achievable. AI-enabled enablement platforms can reduce administrative burden and extend clinical reach. Change management frameworks, applied with discipline, can move an organization’s culture faster than anyone expects but only when the incentives, workflows and culture align and trust is built and scaled at the enterprise level.
What’s not available is more time. The convergence Dr. Wang describes is already underway. The question isn’t whether your organization will encounter it. It’s whether you’ll be ready when it arrives?
Listen to the full episode of PopHealth Week on Healthcare NOW Radio. If Dr. Wang’s perspective on risk, AI, and the future of care delivery – either resonates or triggers you – we want to hear from you. For more information on IKS Health value-based care enablement services go to www.IKSHealth.com
Final editorial judgment, factual review, tone, and framing were conducted by the principal authors and executive producer, who reviewed and approved all AI-assisted content prior to publication. Responsibility for accuracy, balance, and editorial integrity rests solely with the human authors and Healthcare NOW Radio.
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Third-Party Citations
- CMS: Maryland All-Payer Model
- CMS: Maryland Total Cost of Care Model Progress Report (2024)
- Maryland HSCRCL All-Payer Model Five-Year Results
- JAMA Health Forum: Health Care Leaders’ Perspectives on the Maryland All-Payer Model (PMC)
- Commonwealth Fund: Hospital Global Budgeting: Lessons from Maryland and Selected Nations (2024)
- NAACOS & InnovaccerL State and Science of Value-Based Care 2025 (Business Wire, May 2025)
- Health Affairs / CMS: National Health Expenditure Projections 2024–2033
- Mayo Clinic Proceedings / Stanford Medicine / AMA: Changes in Burnout and Satisfaction With Work-Life Integration in Physicians, 2011–2023 (April 2025) (Note: multi-institution study; co-authored by AMA, Mayo Clinic, U Colorado, and Stanford)
- Commonwealth Fund: More Than One-Third of Burned-Out Primary Care Physicians Plan to Stop Seeing Patients (2024)
- Medscape: 2024 Physician Burnout and Depression Report
- The Lancet Digital Health: Jevons Paradox in Global Health: Efficiency, Demand, and the AI Dilemma (2025)
- Health Affairs / RAND: Telehealth for Acute Respiratory Illness: Utilization and Spending (DTC telehealth, 82%/88% findings)
It’s a great model that I believe in wholeheartedly, but not my creation and don’t want to misattribute credit: https://blog.esc13.net/introduction-to-knosters-model-for-managing-complex-change/
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