Does Value Based Care Work?

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Brad Smith has been a leading figure within the Trump administration's U.S. DOGE Service, directing its cost-cutting efforts at the Department of Health and Human Services, a vast agency whose charges include ensuring drugs are safe, preventing diseases from spreading, and administering health care for older, disabled, and low-income Americans.

Given the pain DOGE's cuts have inflicted, it appears Smith brought the same success-at-any-cost mantra to the government. He helped carry out $67 billion in cuts to HHS, by DOGE's count, which includes the National Institutes of Health, the Food and Drug Administration, the Centers for Disease Control and Prevention, and other key health agencies. That sounds like a big number, but it amounts to just 4% of the department's spending, which totaled about $1.7 trillion in 2024.

Smith's role as a senior adviser at HHS was always meant to be temporary, and he stepped down before Memorial Day

He defended cuts to indirect research costs at The National Institutes of Health that sent shockwaves through the scientific community. He criticized the fact that NIH had 27 different centers, 27 different chief information officers, and 700 different information technology systems that can't speak to one another, according to the administration.

"When you think about making great medical discoveries, you have to connect the data," Smith said.

Smith said he was looking at both cost and quality, but the former happens to be easier to measure.

Value-based care has been around for decades and researchers have, by and large, not been able to prove that its various iterations save money, said Lawton Robert Burns, a professor of health care management at the University of Pennsylvania's Wharton School of Business.

"They all seem like good ideas, but then when you dig into it, you say, 'Geez, that didn't work out the way it was supposed to,'" Burns said.

Even as Smith's own conclusion was that value-based care, by and large, doesn't save money, the companies he founded all hinge on that very concept: making money from saving insurers money by taking better care of their members.

 
A Man Named Brad Smith Tried to Save the Government Money on Health Care





Brad Smith worked for the government under President Trump. His job was to help the U.S. Department of Health and Human Services (HHS) spend less money. This department helps make sure medicines are safe, helps people stay healthy, and gives health care to older, poor, or disabled people.





Brad helped cut $67 billion from the department's budget. That sounds like a lot, but it was only a small part (about 4%) of the total money the department used — which was $1.7 trillion in 2024.





His job was always supposed to be temporary, and he left before Memorial Day.





Some scientists got upset because Brad also cut money that supported research at the National Institutes of Health (NIH). He said the NIH had too many different systems that didn't work well together. He believed that better organization would help people make new medical discoveries faster.





Brad said he cared about saving money and making sure care was good — but saving money was easier to measure.





Some experts say a lot of the ideas meant to save money in health care sound good but don't really work when tested. Even Brad's own research showed that a popular idea called "value-based care" usually doesn't save money. But Brad started companies that tried to make money using that idea anyway — by helping insurance companies spend less while taking better care of people
 
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