Apr 6, 2022 · 32m · a16z
Risk-based Contracting for Value-based Care, a Founder's Playbook
Dr. Justin Larkin · 11m spoken Roger Batnigi · 4m spoken Julie Yoo · 3m spoken Jack Stoddard · 3m spoken Corbin Petro · 2m spoken Fay Rottenberg · 1m spoken Mike Kopko · 1m spoken Soch Jain · 48s spoken
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this educational video from Andreessen Horowitz (a16z), hosts Julie Yoo and Dr. Justin Larkin join digital health founders and healthcare executives to deliver a tactical playbook on value-based care and risk-based contracting. They discuss risk spectrums, glide paths, payor partnerships, and operational infrastructure required to scale risk-bearing health tech startups.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. How this is scored →
The host as informed peer 0.0 Guest teaching 2.0 Guest disagreement 0.2 The host pushing back 0.0
speaking balance: gold is the host, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 17:09 Payer Organizational Antibodies
Jack Stoddard forcefully describes internal payer stakeholders as antibodies that emerge downstream to attack novel care innovations.
Hardest push from the host ▶ 1:00 Critique of Fee-for-Service EscalationHost Julie Yoo strongly rejects traditional fee-for-service models, citing how unchecked billing codes drove US healthcare spending to 20 percent of GDP without clinical gains.
Biggest teaching moment ▶ 8:16 No CPT Code for MeaningCorbin Petro educates the audience on why value-based business models are required, noting that essential holistic recovery care lacks any traditional CPT billing code.
The host holds their own ▶ 29:44 VC Evaluation FrameworkJulie Yoo demonstrates extensive venture investment expertise by detailing a multi-point due diligence checklist covering capital reserves, market timing, and clinical evidence roadmaps.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | The host as informed peer | Guest teaching | Guest disagreement | The host pushing back | Why |
|---|---|---|---|---|---|---|
| What is Value-Based Care vs. Fee-for-Service? | 0 | 0 | 0 | 0 | This is an introductory monologue segment narrated by host Julie Yoo outlining value-based care and fee-for-service frameworks. As a monologue without direct host-guest interaction, host expertise and pushback scores are set to zero per instructions. | |
| Macro Drivers Accelerating Risk-Based Contracting | 0 | 3 | 0 | 0 | Justin Larkin narrates introduced clips from founders explaining why they adopted risk models. Guests like Corbin Petro educate on healthcare nuances, noting there is no CPT billing code for creating meaning and purpose in patients' lives. | |
| Determining the Right Level of Risk for Your Model | 0 | 3 | 0 | 0 | The segment features voiceover narration and founder soundbites on choosing the right risk tier. Soch Jain explains why Carem Health stays risk neutral in surgical care to avoid onerous insurance regulations and high capital requirements. | |
| Establishing Partnerships & Aligning on Vision | 0 | 2 | 1 | 0 | Mike Kopko offers a critical reframe that healthcare remains in a dark age driven by geography rather than risk effectiveness. The host provides scripted voiceover introductions without live pushback. | |
| Anchor Partners and Building Broad Stakeholder Coalitions | 0 | 3 | 1 | 0 | Jack Stoddard discusses building stakeholder coalitions and warns of downstream organizational antibodies within payers that attack innovation. The narration remains introductory and supportive. | |
| Defining Success and Key Metrics Upfront | 0 | 2 | 0 | 0 | Founders share practical strategies for defining metric success upfront with payer partners. Roger Batnigi emphasizes that success metrics must be literally modeled in an Excel sheet before signing contracts. | |
| Overcoming Data Delays with Upstream Process Metrics | 0 | 2 | 0 | 0 | Batnigi and Stoddard explain how to navigate the 18-month claims data lag using upstream process metrics. Host presence is purely narrative structure. | |
| Scaling Operations and Mitigating Financial Risk | 0 | 3 | 0 | 0 | Mike Kopko and Corbin Petro explain mechanisms for managing financial exposure as digital health startups scale. Kopko notes that scaling volume helps defray exogenous financial shocks compared to small practices. | |
| Investor Checklist for Risk-Based Digital Health Startups | 0 | 0 | 0 | 0 | Julie Yoo delivers a concluding monologue providing an investor checklist for evaluating risk-based digital health startups. Because this is a monologue, host interactive scores are zeroed out per guidelines. |
Statements from this episode (16)
Julie Yoo: Fee-For-Service Drove US Healthcare Spending to Nearly 20% of GDP
“You know, these payer provider contracts have really driven these fee-for-service rates through the roof. And that's been a major driver of why our nation's healthcare costs have skyrocketed to nearly 20% of GDP without a commensurate rise in clinical outcomes…”
Dr. Justin Larkin: Only 6% of 2021 healthcare dollars were capitated
“In 20, 21, fewer than 40% of healthcare dollars actually flowed through a payment model that had any kind of substantial value component to it. And only six percent of dollars were in sub capitation or in a global capitation arrangement.”
Justin Larkin: CMS aims for 100% Medicare value-based care by 2030
“Just this last year, we heard from CMS, which is the Centers for Medicare and Medicaid Services, that they're aiming to have all of Medicare beneficiaries cared for by providers in value-based care models by 2030.”
Jack Stoddard: Investing more in primary care cuts broader healthcare waste
“In healthcare for primary care, the market is used to paying only four to maybe six percent for primary care. And our belief is if you invest more in primary care that you can actually take out waste in the rest of the other 90, you know, six percent of health…”
Roger Batnigi: Startups should not adopt risk purely for valuation arbitrage
“I would not recommend moving toward risk simply for some kind of valuation arbitrage. I think you do it because It's needed to prove a new model of care or it's needed to cover something that that's just simply not paid for under existing CPT codes.”
Corbin Petro: Clinical models fail without matching business models
“Well, there's no CPT code for creating meaning and purpose in people's lives. And so you have to figure out another way to address that. And that's sort of the clinical model and the business model go hand in hand. You can't sustainably deliver the clinical mo…”
Roger Batnigi: Controlling care levers requires transitioning to full global capitation
“For example, if you needed to control and in your care model, you know, all of utilization management, you know, the claims payment network design. Well, there's probably no other way for a payer to let you have those keys other than moving to a true global ca…”
Justin Larkin: Align healthcare risk structures to primary, specialty, or surgical care
“For example, in primary care, care is more continuous. It's more longitudinal. It covers a broader set of levers and conditions. So for that, global cap often makes the most sense. On the other hand, other more isolated specialty conditions might be a better f…”
Mike Kopko: Risk management effectiveness will dictate future provider-patient matching
“And we would argue that over time, it's actually going to be much more on who is effective with risk and which clinical models manage which risk conditions effectively.”
Jack Stoddard: Very few healthcare payer employees can approve deals
“In my experience, there are very few people in these payer organizations who can say yes, but there are a lot who can say no.”
Roger Batnigi: Startups must model payor success in spreadsheets before contracting
“The question about defining success is not something that you sort of get into at the end of year one of your partnership. If it is, you're probably in trouble. There's nothing more important than actually getting that defined and not just kind of conceptually…”
Roger Batnigi: Risk-based healthcare financial outcomes take 18 months to verify
“With, you know, the run out in claims and the reconciliation period, and even in Medicaid retroactive government adjustments on rates It could be literally 18 months until you have a financial answer on, you know, whether the model works.”
Roger Batnigi: First-year risk-bearing startups must balance actuarial scale against exposure
“There's a balance between needing to be enough scale so that, you know, operationally from a unit economics perspective, You can make it work. And then from an actuarial perspective, you have enough credibility, but not being at so much scale or being so expos…”
Mike Kopko: Large patient pools protect risk-bearing platforms from cost swings
“One that we think about in a way to kind of help serve our market is the larger you get in these models, the more you accept yourself from systemic risk, and you can effectively defray that, and you have a fewer exogenous factors that can really be incredibly …”
Roger Batnigi: Risk-bearing health startups must hire late-stage talent earlier
“You kind of have to bring in a lot of the expertise and process that you might see in a larger later company earlier, if you're going to move down this path, because the stakes are so much higher.”
Roger Batnigi: Transforming care delivery requires a decade-long investment timeframe
“You don't do this because you think you're going to have an outcome that you can point to in 12 or 18... Over a many year period, potentially a decade or more, that you're going to make a real impact on care delivery. And you kind of, you have to have that pat…”