Health systems are under growing pressure to succeed in new payment models as the industry shifts from fee-for-service to value-based care. For Renton, Wash.-based Providence, success has hinged on a holistic approach spanning clinical and financial performance — one that generated more than $177 million in Medicare savings in 2024, following $148 million the year prior.
“We think of value based care success holistically, and not just from a financial or clinical lens,” Susan Huang, MD, chief physician executive of Providence and chief executive of the Providence Clinical Network, said. “While financial success such as shared savings is great to have, what we’re looking for is great care that is sustainable, that moves care upstream, and is able to take care of our communities, including those who are the most frail.”
Dr. Huang oversees Providence’s physician enterprise and ambulatory network, which spans more than 10,000 physicians and advanced practice providers across 1,100 clinics and seven states.
Her comments come as the broader shift to value-based care accelerates. For example, a 2025 Optum report found that about 14% of U.S. healthcare payments are now tied to capitated risk models, up from 7% in 2021.
At the same time, a 2.5% physician fee cut is reducing Medicare reimbursement in 2026, while CMS has proposed the first mandatory, nationwide, episode-based payment model, CJR-X, set to take effect Oct. 1, 2027.
In an April 14 fireside chat at Becker’s 16th Annual Meeting, Dr. Huang discussed Providence’s value-based care journey and what she is carrying into her next role as president and CEO of Portland, Ore.-based Legacy Health, set to begin in June.
Editor’s note: Responses have been lightly edited for clarity and length.
Question: Providence operates across hospitals, a large ambulatory network and community-based care settings. How do you decide where to start and how to scale value-based care across such a diverse system?
Dr. Susan Huang: You have to assess readiness — by geography, division or function. Providence spans seven states, and each market is very different. Even within a state, regions vary significantly.
You need to understand the dynamics of the markets — the systems, payers, products and level of maturity, including workforce readiness. Southern California is very mature in value-based care, with a long history of managed care and more than 700,000 value-based lives. Alaska looks very different.
That doesn’t mean earlier-stage markets can’t do value-based care, but their journey and investments will look different. At the same time, you want a unifying approach — what should be centralized and what should remain local.
What doesn’t work is a one-size-fits-all approach. Some elements can scale, but others need to be tailored to local readiness and culture. You have to understand that maturity and adapt accordingly.
Q: How are reimbursement pressures and evolving payment models influencing physician sustainability, and how do you approach building the capabilities needed to succeed in value-based care?
SH: I’m encouraged by the innovation from CMS. Unless the government makes bold moves, it can be hard for private payers to follow.
For health systems, it’s critical to understand the details of these models and do the modeling upfront. We have a small team of actuaries that helps us evaluate trade-offs and decision points.
These models require investment, so you have to understand what you’re putting in and what you expect in return. Core capabilities like data analytics and IT infrastructure are essential to provide visibility and transparency. For example, tools that identify high utilizers and rising-risk patients allow us to intervene and track outcomes.
But the work goes beyond tools. It’s cultural change and leadership investment. You have to prioritize it and dedicate leadership time to it.
There’s always resistance. Change is hard, especially in systems that are primarily fee-for-service or balancing both models. But now more than ever, value-based care makes sense. It helps optimize capacity, ensure the right patients are getting the right care and allocate resources appropriately.
Q: What role do technology, workforce alignment and social determinants of health play in advancing value-based care and addressing affordability?
SH: Technology is helping generate insights. We have a lot of data, but the value comes from turning that into actionable insights — identifying subpopulations and influencing clinical decision-making.
It also helps address workforce challenges. We have a capacity issue across all roles, so we need to reduce burden and enable people to work at the top of their license.
What doesn’t work is just telling people what to do. You have to understand where they are, explain why change matters and align incentives. If incentives are misaligned, it won’t work.
On affordability, value-based care is critical. Costs continue to rise, and outcomes aren’t keeping pace. These models align economic incentives with care delivery, but they’re not yet prevalent in many parts of the country.
Social determinants are also key. It’s not just about Providence — it’s about partnerships with community-based organizations. We collect a lot of data, but the question is what you do with it. Measuring ROI can be difficult because attribution is complex, but we rely on pilots, best practices and early signals to scale what works.
Q: As payment models, reimbursement pressure and technology continue to evolve, what will distinguish the health systems that succeed over the next five years — and as you move to Legacy Health, what are you most eager to apply or rethink?
SH: There’s a timing element to value-based care. Traditionally, there’s a longer investment curve, but with better tools, we may be able to shorten that.
Success will come from making smart investments, but also cultural investment and education. You have to bring your workforce along and align incentives. Siloed thinking won’t work.
It will also require stronger collaboration with CMS and others to close the gap between policy and implementation.
As I move to Legacy, I’ll need time to understand the organization, but every system needs to think about value-based care in the context of its community. These systems are vital assets. Without them, there’s no access to high-quality care. It’s really about sustainability — aligning economic models, workforce needs and clinical care to support the long-term health of communities.
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