DOTmed News: How do these new companies influence older companies to change their business models?

JR: Older companies are under pressure to move toward value-based profit models. They're well aware this is a very different world, from a business point of view. And they don't want to become Kodak, as one executive told me. So they're investing in, partnering with, and sometimes acquiring entrepreneurial newcomers in order to get ahead of the curve. Many insurers and providers run strategic venture-investment arms, seeking to gain early access to new technologies, diversify their business portfolios, hedge against risk in traditional markets, tap into fresh talent or expertise, develop strategic partnerships with new businesses, stimulate innovation or fresh thinking within their own corporate culture, or all of the above.

DOTmed News: To what extent can this shift in values be credited to the ACA?

JR: In my interviews, the ACA came up again and again as a major source of pressure to shift toward value. Party that's because the ACA implements a suite of value-based payment programs and incentives (there's an eight-page list of them here), and partly it's because the ACA's overall scope and scale got health-care executives' attention, convincing them that the government is serious about taking away the fee-for-service punch bowl. But other policy changes have mattered, too: payment-incentive changes in Medicare Advantage, for example, and the government's stated objective of moving half of all Medicare payments off of fee-for-service by 2018. Add these things together, and CFOs of health-care organizations get the message.

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