HCA Healthcare
February 12, 2024


Source: Nashville Business Journal
Author: Nikki Ross
Date: February 12, 2024

Value-based care is an "elusive concept," according to HCA Healthcare Inc. CEO Sam Hazen. So why is Wall Street obsessed with it?

According to health care analysts, it’s attractive, there’s growth opportunities and there’s a lot of capital chasing it. 

“I’m not bashing value-based care, but I’m curious on the thought process that goes on in that,” Hazen said at an event last week.  

Value-based care was a hot button topic during the Nashville Health Care Council’s 2024 Wall Street Perspective on the Healthcare Industry event Wednesday, where Hazen served as moderator. 

HCA (NYSE: HCA) is Nashville’s largest publicly traded company by revenue, according to Business Journal research, with 27,694 employees locally in 2023. The hospital system operates 186 hospitals and 2,400 ambulatory sites of care across 20 states and the United Kingdom. 

Value-based care models offer financial incentives to physicians, health systems and other providers based on quality of care, while shifting financial risk from insurers to providers. 

Hazen said by adopting a value-based care model, the risk is offloaded to a private entity. 

“That entity is now responsible for the cost and the outcomes associated with that,” Hazen said. “It’s been a difficulty for a lot of organizations to accomplish their objectives and ultimately scale."

For Whit Mayo, senior managing director of health care providers and managed care for Leerink Partners, there’s an appropriate amount of criticism surrounding the model. 

“Why is it good business to take risks on things you can’t control?” Mayo said. “You can’t control when they [patients] go to specialists … when they access engaged outpatient points. That’s terrible business."

While some are skeptical about value-based care, Gary Taylor, managing director of health care facilities and managed care for TD Cowen, said "the premise is attractive."

And Brian Tanquilut, health care services equity research analyst for Jefferies LLC, said there's a lot of capital chasing it. 

"There's a lot of growth opportunities," Tanquilut said.

Founded in 1995, the Nashville Health Care Council is the most prominent organization representing Nashville’s massive health care industry. Often referred to as the “campfire” around which the city’s health care leaders gather, the council is made up of more than 315 corporate members. The group hosts its Wall Street perspective event annually.