Despite billions invested in value-based care, most U.S. healthcare organizations still measure success using outdated metrics. For decades, the system rewarded volume over value—prioritizing the number of procedures over the quality of outcomes. The shift to value-based care (VBC) was meant to change that, yet many organizations continue to rely on clinical efficiency indicators like readmission rates and infection rates. These measures, while important, fail to capture what truly matters: patient outcomes, experience, and long-term health impact.
As part of the shift from linking clinical reimbursements to cost-effective, evidence-based, patient-centered care, rather than outputs, healthcare organizations face the challenge of defining the right key performance indicators (KPIs) to measure actual value.
“One of the biggest challenges in value-based care is moving beyond traditional efficiency metrics,” says Lesley Weir, senior director of customer and product success at Veradigm. “Organizations often track what’s easy to measure instead of what truly reflects quality or patient outcomes.”
Selecting Successful Metrics
Too often, healthcare organizations default to generalized outcomes or cost savings when defining KPIs for value-based care. While these measures are easy to track, they rarely reflect what patients value most—quality outcomes and experience. As a result, dashboards become skewed toward financial efficiency rather than true health impact.
The most common mistake? Overemphasizing cost reduction without linking it to quality or outcomes. But that’s not the only pitfall. Selecting an excessive number of KPIs dilutes the strategic focus; a misalignment between leadership and frontline teams will lead to poor adoption; and using generic KPIs results in overlooking specific populations or care models, according to Weir.
“Selecting KPIs that reflect both quality and efficiency is key,” she says. “That includes clinical indicators like risk-adjusted mortality or chronic disease control, operational measures like care gap closure rates, and financial metrics such as value-based reimbursement ratios.”
Without patient-centered KPIs, organizations struggle to prove whether value-based care delivers on its promise—better outcomes, improved experience, and sustainable cost management. Effective KPIs should tell the full story of care, not just operational performance.
Weir highlights several clinical, operational, and financial metrics that reflect total value, not just cost savings. These include risk-adjusted mortality, complication rates, chronic disease control, total cost of care, care-gap closure rates, net patient revenue per episode, and margin per risk-adjusted patient.
“When metrics reflect total value and not just short-term savings, it supports stronger partnerships between payers and providers,” Weir adds.
Depending on the Data
Data analytics allow healthcare organizations to assess the performance, effectiveness, and impact of VBC, and artificial intelligence (AI) can help identify which KPIs are most predictive of success. One survey found that 90 percent of executives who use AI to create new KPIs saw an improvement and were three times more likely to see greater financial benefits.
Weir highlights the ability of AI to detect patterns in large datasets, identify predictive KPIs, segment populations to tailor KPIs to specific risk profiles, and model performance under different care scenarios to support proactive decision-making.
“Experience dashboards that link patient feedback to clinical KPIs like wait times and adherence make the relationship between experience and outcomes visible and actionable,” she explains. “Research shows that positive patient experience correlates with improved safety, adherence, and lower readmissions.”
This data-driven personalization reflects a broader evolution toward VBC. At the same time, AI enables healthcare organizations to model the downstream effects of care decisions, helping leaders forecast whether changes in areas such as chronic care management will have a meaningful impact on cost or quality. But overlooking data integrity and transparency erodes trust in the metrics.
As VBC models proliferate, so do the metrics. Without governance, measurement can become an administrative burden rather than a tool for improvement.
“Effective governance typically includes cross-functional committees with clinical, financial, and operational stakeholders,” says Weir. “Clinical governance frameworks should embed KPI review into quality oversight, with board-level alignment to strategic goals and population health priorities.”
Empowering frontline teams is equally critical. The authority to refine and act on KPIs fosters trust and ensures these metrics actually drive change.
Defining the right KPIs for value-based care isn’t about tracking more metrics; it’s about tracking the right metrics. The most effective healthcare organizations align their measures with outcomes that matter to both patients and providers while balancing cost, quality, and experience.
“Metrics should tell the story of care from patient trust and satisfaction to chronic disease control and total cost of care,” Weir says. “When those stories align, value-based care becomes more than a reimbursement model; it becomes a shared framework for better health.”
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