What is value-based care? Looking beyond the fee-for-service model

Understanding the importance of msk benefits

Healthcare spending in the United States continues to rise, yet outcomes for many conditions, including musculoskeletal (MSK) pain, are not improving at the same pace. MSK disorders are now the top driver of healthcare costs in the U.S., accounting for more than $500 billion annually when medical spend and lost productivity are combined.¹ Employers face both direct costs and indirect costs from absenteeism and presenteeism, making MSK a growing priority for benefits teams.

Despite this investment, members are too often steered toward low-value care such as unnecessary imaging and avoidable surgeries. Musculoskeletal (MSK) health is one of the biggest drivers of employee wellbeing and organizational performance, yet an estimated $90.9 billion is wasted each year on MSK interventions that provide little value.²

The disconnect is structural, rooted in how healthcare is paid for by employers, health insurers, and patients themselves.

Why traditional models keep costing more and fixing less

Fee-for-service (FFS) reimburses providers based on activity, not results. Each visit, scan, or procedure generates revenue regardless of whether it improves the patient’s condition. This model rewards quantity over quality and creates little incentive to prevent unnecessary interventions.

In MSK care, that misalignment shows up in costly, ineffective pathways. 

• A member reports back or joint pain. 
• Imaging is ordered, often prematurely. 
• Physical therapy may be prescribed, but half of patients drop out after only four sessions.³ 
• Pain persists, and expensive MSK surgery often becomes the next step. 

Yet research shows that 36 percent of MSK surgeries are unnecessary, and 80 percent of those costs could be avoided if high-quality physical therapy was used first.²

The result is a cycle of overuse and inefficiency. Disability claims rise, productivity declines, and companies lose an average of $2,916 per member per year in absenteeism-related costs.⁴ Employers keep paying, but their people do not get better.

How value-based care works

Value-based care flips the script. Instead of paying for how much care is delivered, VBC ties payments to how well that care works. This model rewards providers for helping patients recover, not for delivering more services. Employers only pay when outcomes are achieved. Members receive care that is timely, personalized, and focused on real and relevant healthcare outcomes.

The principles are simple: intervene early, measure outcomes like pain reduction and improved function, eliminate unnecessary procedures, and provide transparency into performance and spend. Accountability becomes the standard and payers can track and expect return on their healthcare investment.

Sword Health builds these principles into its approach to MSK care. Success is measured against member-selected goals and clinically validated outcomes such as the Patient Global Impression of Change (PGIC), a patient-reported metric recommended by FDA and IMMPACT guidelines as a valid anchor for meaningful clinical change.⁵ ⁶

How outcome-based pricing delivers accountability

Sword’s outcome-based pricing aligns fees with member recovery. Employers pay 50 percent at activation, covering the cost of the FDA-listed medical devices that members receive to perform their personalized care plans from home. The remaining 50 percent is billed only when members achieve their individual health goals or show meaningful improvement on PGIC.⁷ ⁸ ⁹

This model raises the bar on accountability. Billing is tied to individual outcomes, making it transparent and auditable at the member level. It also reflects maturity. Sword pioneered engagement-based pricing in 2020, then advanced to outcome-pricing to tie value directly to results, giving customers even more assurance in the effectiveness of Sword programs.⁸ ⁹

What outcome pricing means for benefits and health plan leaders

For employers and health plans, outcome pricing is a safeguard. If members do not improve, the payer’s investment is protected. This eliminates waste, strengthens vendor accountability, and provides clarity for finance teams.

The financial impact is tangible: 

• Employers using Sword achieve average annual savings of $3,177 per member.¹⁰ 
• In higher-risk populations identified through predictive analytics, ROI climbs as high as 4.4x.¹¹ 
• Sword Predict identifies members up to 40 times more likely to undergo surgery and reduces surgery intent by 60 percent, allowing proactive intervention that prevents high-cost claims.¹²

These savings are repeatable because they are tied to real clinical outcomes, not utilization metrics.

Why speed, access, and adherence impact MSK costs

The value-based care only works if members can access treatment quickly and complete their program. Traditional in-person physical therapy often creates friction with scheduling complexity, patient waitlists, confined clinic opening hours, and travel time all creating barriers to people accessing care and adhering to care plans over time.  Only 30 to 50 percent of patients complete care under FFS models.³

Sword’s digital model eliminates traditional barriers to in-clinic care by allowing members to access their personalized program at any time, from any place.

• Members start care in an average of 3.8 days for first contact and 6.3 days to begin treatment.¹³ 
• Sessions are flexible, with 42 percent occurring outside business hours and 23 percent on weekends.¹⁴ 
• Sword’s digital PT achieves an 81 percent program completion rate, far higher than traditional in-person care.¹⁵

These factors directly support ROI. Faster starts reduce escalation risk, flexible access supports adherence, and higher completion leads to measurable outcomes.

Value-based care delivers proven results for your people and your business

VBC must prove both health and business impact. That’s fundamental to the model. Sword’s outcomes-based pricing model ensures that customers only pay in full when members achieve their healthcare goals. 

The healthcare outcomes for Sword members are sustained and consistent:

• 69 percent report being pain-free
• 65 percent finish with no functional disability
• 55 percent avoid surgery
• 39 percent stop using pain medication¹⁶

Employers also see meaningful productivity gains with a 68 percent recovery of lost productivity⁴, and organizations save $2,916 per member per year in absenteeism-related costs.¹⁷

Mental health outcomes improve too. Peer-reviewed studies show digital MSK care reduces depression by 64 percent¹⁸ and anxiety by 50 percent.¹⁹ MSK pain and mental health challenges often overlap, leading to lost productivity, absenteeism, and amplified costs if left untreated.

How to find and choose a value-based care partner

Not every solution labeled “value-based” is truly aligned. Employers should evaluate:

• Is pricing tied directly to outcomes and auditable at the member level?
• Are licensed clinicians leading care and tailoring it to each member?
• Are outcomes measured with validated, patient-centered tools like PGIC?
• Can members access care quickly and complete their program?
• Is there credible evidence of ROI, waste reduction, and equity gains?

Sword meets these standards consistently. Our solutions are purpose-built to deliver outcomes, not volume. With the powerful combination of smart AI technology, predictive analytics, expert clinicians carrying a Doctor of Physical Therapy, and 24/7 access to care using FDA-listed medical devices, Sword aligns member health with employer ROI.

Make MSK spend work like an investment

Employers no longer need to pay for visits that do not change outcomes. With value-based MSK care, every dollar is tied to results. Outcome-based pricing aligns incentives, predictive analytics enables early intervention, and digital care delivery improves access and adherence.

The result is MSK care that works: for members, for finance leaders, and for the future of healthcare delivery.

Stop your MSK healthcare spend from leaking away

Employers have an alternative to rising costs and underperforming care. With outcome-based pricing, predictive engagement, and fully remote clinical delivery, Sword Health helps organizations control spend, restore workforce productivity, and give people the care they deserve.

If you’re ready to turn MSK care from a cost center into a strategic asset, request a demo and a Sword expert will walk you through the solutions you can add to improve your MSK healthcare offering.