Recently, leaders at the Centers for Medicare & Medicaid Services unveiled a broad new strategic direction for the agency. The updated 2025 strategy, framed around the goal of “Making America Healthy Again,” centers on prevention, choice, competition and accountability across the healthcare delivery system, the primary themes of my last two books.
This new direction should be applauded. But to deliver real value for the American taxpayer and patient, we must treat this as a first step, not the final word. Strategy must be matched by execution—and by a fundamental rethinking of the healthcare business model.
For over 30 years, I have argued that the fee-for-service model is structurally flawed and that transparency, accountability across healthcare delivery, prevention and competition should be the pillars of a functioning system. The new CMS strategy recognizes this. Its focus on evidence-based prevention, patient empowerment and competition signals a shift toward a more coherent and value-oriented system.
Importantly, it explicitly acknowledges the need for provider accountability and ties model success to both outcomes and cost—an essential but long-missing connection in public reimbursement for the delivery of healthcare services. In this sense, the CMS Innovation Center’s direction is a sharp and encouraging departure from what the agency has advocated previously.
To understand the potential of this new CMS strategy, we must start with a basic truth: the current healthcare delivery model is broken. Tweaks at the margins, a payment cut here, a bundled pilot there, will not repair the systemic misalignment of incentives that drives poor performance.
What’s needed is a new business model for care delivery, one that views health outcomes as the primary objective and defines success in terms of value created, not services billed. That means holding provider organizations accountable for delivering against evidence-based standards, not because the government mandates it, but because they choose to compete based on performance.
Here, CMS must avoid being overly prescriptive. Just as the FDA doesn’t dictate how to manufacture a drug but sets safety standards, CMS should set expectations and let providers innovate. The government’s job is not to micromanage delivery, but rather to define outcomes that matter, measure performance and reward results.
Perhaps the most significant shift in CMS’s new plan is the emphasis on accountability across the continuum of care. For too long, the system has incentivized treatment in settings that generate the most revenue rather than those that make the most clinical or economic sense.
Site-neutral payment is a necessary correction. It removes perverse incentives that favor hospital outpatient departments over physician offices or community clinics. It encourages providers to think differently about where and how care is delivered.
The purpose of public reimbursement is not to sustain the financial model of any one stakeholder. It is to deliver value for patients and taxpayers. If organizations are not set up to deliver evidence-based care in a cost-effective way, that is a problem for them to solve—not one for CMS to accommodate.
Far too often, the healthcare debate has centered on expanding coverage without a parallel focus on value. The CMS Innovation Center’s new strategy corrects this by tying every model to fiscal soundness and outcome improvement.
This is critical. Public programs like Medicare and Medicaid must serve their populations effectively but also sustainably. That means demanding more from delivery organizations, not shielding them from financial risk. It also means recognizing that pharmaceuticals are not the sole driver of cost. Even if every drug were free, we’d still be left with a system that spends inefficiently and delivers suboptimal results.
Accountability must extend to every part of the delivery system. That includes transparent reporting of outcomes, real downside risk for underperformance and support for high-performing independent providers who often deliver better value with fewer resources.
Ultimately, good strategy matters much—but it’s only the beginning. The CMS Innovation Center’s plan outlines a clear and comprehensive direction. The next step is to translate that vision into operational reality. The resistance from the healthcare delivery segment will be significant. What’s required now is disciplined execution supported by clarity of vision, clearly defined milestones and a relentless focus on results.
To get there, CMS must avoid the trap of prescribing every detail. Instead, it should create the conditions for innovation, enforce transparency and accountability and let market forces reward high performance. The role of the government is to establish expectations for reimbursement, not detail how care should be delivered.
The CMS Innovation Center’s 2025 strategy is a promising and long-overdue shift in direction. It signals that policymakers are seeing the whole picture, not merely reacting to individual cost drivers or isolated outcomes. But success will hinge on whether this vision can be made real. That means aligning incentives, enforcing accountability, supporting competition and educating both providers and patients to operate in a truly value-based marketplace.
We are not there yet. But we have a starting point and a clear understanding of where we need to go. Now it’s time to act.
