Blog/Value-Based Care

The $100 Billion Problem Hiding in Plain Sight

Understanding Care Gaps in Value-Based Care

Ankit Gordhandas
Ankit Gordhandas
December 2024·20 min read·Interactive Article

Annual Cost of Unclosed Care Gaps

$100,000,000,000

Increasing by $3.2K every second

Click to see breakdown by category

Preventive Screenings

$30B

per year

Chronic Disease Management

$45B

per year

Medication Adherence

$25B

per year

$0$100B+

Sarah is 64, diabetic, and hasn't had an eye exam in 18 months. In fee-for-service healthcare, this is someone else's problem. The ophthalmologist loses a visit. The PCP might not even know. And the insurance company? They'll pay for the complications when they come.

But in value-based care, Sarah's missed eye exam is your problem as her PCP. That “small” gap represents a HEDIS measure you're being graded on. It's a Star Rating that affects your bonus payments. And if Sarah develops diabetic retinopathy that could have been caught early? That's a $50,000 complication that directly impacts your total cost of care.

Multiply Sarah by millions of patients, and you begin to understand why care gaps represent the most tangible, measurable, and actionable opportunity in value-based care.

What Actually Is a Care Gap?

A care gap is the delta between recommended care and actual care delivered. It's a missed mammogram, an overdue A1C test, a prescription that wasn't refilled. In isolation, each gap seems minor. At scale, they represent billions in preventable costs and thousands of avoidable adverse outcomes.

For patients, care gaps aren't abstract metrics. They're the difference between catching cancer at stage 1 versus stage 4, between managing diabetes and losing a limb, between a $20 copay for a screening and a $10,000 hospital bill. Most patients don't even know they have open care gaps. They assume that if something were wrong, their doctor would tell them. Closing these gaps isn't just a financial imperative. It's how we deliver on the promise that the healthcare system is actually looking out for people.

Preventive Screenings

Routine screenings designed to catch diseases early, when they are most treatable and least costly.

$30B/yearHigh Impact

Chronic Disease Management

Ongoing monitoring and management of chronic conditions to prevent complications and hospitalizations.

$45B/yearHigh Impact

Medication Adherence

Ensuring patients take prescribed medications consistently to manage conditions and prevent acute events.

$25B/yearHigh Impact

These three categories (preventive screenings, chronic disease management, and medication adherence) account for the majority of HEDIS quality measures that determine Star Ratings. Each category has distinct intervention strategies, cost profiles, and ROI characteristics.

The Economics of Care Gaps

The math is stark: a $200 screening can prevent a $50,000+ complication. But the calculus only works in your favor if you're accountable for the downstream costs. In fee-for-service, hospitals profit from complications. In value-based care, you pay for them.

Gap Cost Calculator

See the financial impact of care gaps at scale

1001,000 patients10,000

Cost Comparison

Preventive Screening Cost($200/patient)$200K
Expected Complication Cost($11K avg/patient)$11.3M

$11.1M

Potential Savings

55x

ROI on Prevention

150

Complications Prevented

Key Insight

For every dollar spent on closing breast cancer screening gaps, you save $56 in avoided complications. At 1,000 patients, that's $11.1M in annual savings.

The Star Ratings Connection

For Medicare Advantage plans and ACOs, care gap closure directly translates to Star Ratings. The difference between a 3.5-star and 4-star rating can mean millions in bonus payments. Use the simulator below to see how closing gaps in specific measures impacts your rating.

Star Ratings Simulator

See how closing gaps impacts your Star Rating and bonus payments

Current

3.0

70% performance

+1

Projected

4.0

80.0% performance

0%Star Rating Thresholds100%
2
3
4
5

Bonus Payment Impact

Attributed Lives

Annual Revenue Base

$360.0M

Additional Bonus Payment

+$18.0M

5% bonus for achieving 4+ stars

Congratulations! By closing 500 gaps, you would cross the 4-star threshold and qualify for $18.0M in annual bonus payments.

The Scale Problem

Here's where theory meets reality. You have 50,000 attributed lives. How many actually need intervention? The answer requires sophisticated risk stratification, because not every patient with an open gap requires the same level of outreach.

Population Risk Funnel

For a typical 50,000-member value-based care population

50,000(100%)
Total Attributed Lives
20,000(40%)
Has Chronic Condition
8,000(16%)
Has Open Care Gaps
2,000(4%)
High-Risk for Complications
500(1%)
Requires Immediate Intervention

Effective gap closure means matching the intensity of your intervention to each tier. Automated reminders for the broad base, dedicated care management for the high-risk few.

The challenge isn't identifying gaps. Your EHR can give you a list. The real challenge is allocating limited resources (care managers, outreach staff, intervention budget) across a population with vastly different needs and different potential ROI.

Resource Allocation Game

Allocate your care managers to maximize impact

Care Manager Pool
10
10 allocated0 unallocated

Healthy/Low Risk

25,000 patients

1
Coverage1%

Complications Prevented

4

Cost Saved

$20K

Rising Risk

12,000 patients

3
Coverage2%

Complications Prevented

19

Cost Saved

$285K

High Risk

5,000 patients

4
Coverage2%

Complications Prevented

24

Cost Saved

$840K

Critical

1,000 patients

2
Coverage2%

Complications Prevented

8

Cost Saved

$600K

Your Allocation Results

$1.7M

Annual Cost Saved

55

Complications Prevented

1.8x

Return on Investment

Try optimizing! Consider reallocating care managers from low-risk segments (use automation) to high-risk and critical segments where human intervention has the highest impact.

The Care Gap Lifecycle

Closing a care gap isn't a single action. It's a process. From initial identification through intervention to confirmation, each step has associated costs, success rates, and escalation paths. Understanding this flow is essential to optimizing your approach.

Gap Closure Intervention Flow

Click nodes to explore or simulate a patient journey

Gap Identified

Care gap detected in claims/EHR data

Automated Outreach

25% success

$2/patient

SMS/Email reminder with scheduling link

Live Phone Call

45% success

$25/patient

Care coordinator calls to schedule and address barriers

Care Manager

65% success

$75/patient

Comprehensive care plan and intensive follow-up

CHW Home Visit

70% success

$150/patient

Community health worker addresses SDOH barriers

Gap Closed

Patient completed the care activity

Gap Remains

Patient not reached after all intervention attempts

Intervention Steps

0

Total Cost

$0

Outcome

In Progress

How it works: Each intervention has a success rate. If successful, the gap closes. If not, the patient escalates to the next intervention level. The key insight: automated outreach is cheap but catches 25% of gaps. High-cost interventions like CHW visits have 70% success but cost 75x more—reserve them for patients who need them.

What Makes Gaps Close (And What Doesn't)

Not all interventions are created equal. The effectiveness matrix below plots each intervention type by its success rate and cost per intervention. The sweet spot is in the upper-left: high impact at low cost.

Intervention Effectiveness Matrix

Hover over bubbles to see intervention details

Cost per Intervention →Effectiveness Rate →
$0
$150
100%
0%
High Scalability
Medium
Low

Hover over a bubble to see intervention details

Bubble size indicates scalability potential

Sweet Spot

Strategic

Minimal Use

Avoid

Key Insight: The sweet spot is in the upper-left quadrant—high effectiveness at low cost. Automated outreach (SMS/email) offers the best scalability, while provider alerts during visits achieve high effectiveness at near-zero marginal cost. Reserve expensive interventions like CHW visits for patients where lower-cost options have failed.

Key Insights from Research

  • Personalization matters: Generic reminders have 15% effectiveness; personalized outreach achieves 45%
  • Timing matters: Outreach within 2 weeks of a missed appointment is 3x more effective than waiting longer
  • Channel matters: SMS for younger patients, phone calls for elderly. Matching channel to preference boosts success
  • Context matters: Transportation barriers require different solutions than awareness gaps

Why This Is Hard (And Why It Matters)

Data Fragmentation

Claims data lags by months. EHRs are siloed. Patient attribution changes. Getting a real-time, accurate view of open gaps is surprisingly hard.

Intervention Scale

You can't manually manage thousands of gaps across dozens of measures. But automation without personalization doesn't work. The balance is delicate.

Measurement Challenges

Proving that your intervention caused the gap closure (vs. the patient doing it anyway) requires rigorous attribution modeling.

Resource Constraints

Care managers are expensive and scarce. Every minute spent on low-yield outreach is a minute not spent on high-impact interventions.

These challenges explain why most organizations struggle with gap closure despite understanding its importance. Bolt-on solutions don't work. This requires purpose-built infrastructure that integrates data, workflows, and analytics.

The Future of Gap Closure

Past

Reactive

Quarterly reports identifying gaps with 3+ month claims lag

Now

Semi-Automated

Real-time identification with manual outreach processes

Soon

Proactive

Predictive gap emergence with automated, personalized intervention

Future

Transformative

AI-driven personalized care journeys preventing gaps before they occur

The organizations that move first on this capability curve will define the next decade of value-based care. They'll achieve Star Ratings their competitors can't match, negotiate better contracts, and build moats around their patient populations.

The Stakes Are Clear

Remember Sarah? The 64-year-old diabetic who hasn't had an eye exam in 18 months. In a system with mature gap closure, Sarah gets a personalized text reminder at month 10. At month 12, her care manager calls. By month 14, she's had her retinal exam, and the early-stage retinopathy they caught is treated with a $500 intervention instead of a $50,000 crisis.

Multiply that by millions of patients, and the math is clear. The organizations that master gap closure will define the next decade of healthcare. The infrastructure investment is real, but the returns compound over time. The question isn't whether to invest in gap closure capability. It's whether you can afford not to.