Incentivized Beneficiary Engagement Is Healthcare's Missing Link

The healthcare industry has underinvested in financially engaging beneficiaries in their own care plans and medical economics. This underinvestment is a central driver of avoidable healthcare expenditure growth. The clinical infrastructure exists. The regulatory permissions exist. What is missing is the incentive infrastructure to activate patient participation at scale.

Healthcare spending in the United States continues to outpace economic growth, now representing 17.6 percent of GDP, and its trajectory is accelerating. Medicare spending alone reached $1.1 trillion in 2024, averaging $17,663 per beneficiary across 67.6 million enrollees, and is projected to grow 5.8 percent annually through 2033, well above GDP growth of 4.3 percent. These trends persist despite sustained investment in value-based care, population health, care management, and analytics designed to reduce the total cost of care. Capital has been deployed. Infrastructure has been built. Programs have been implemented across Medicare, Medicaid, and commercial populations. The results have not matched the expected return of value-based care.

The fee-for-service payment model has historically rewarded reactive care. Even within accountable care models, this legacy persists. Reactive treatment, diagnosing and managing illness after symptoms present, accounts for more than half of total healthcare expenditures. Patients engage with the system when they are sick. Providers engage with patients when they walk through the door. Between visits, the relationship effectively pauses. Accountable care models structurally incentivize increased patient engagement, but most ACOs continue to rely on passive engagement strategies that reach too few patients to generate substantial savings. In Partners Healthcare's Pioneer ACO, one of the most rigorously studied Medicare ACOs, only one to six percent of aligned beneficiaries enrolled in care management in a given year between 2012 and 2014. Only one-third of identified high-risk beneficiaries ever enrolled. The pattern extends nationally. In a 2015 to 2019 nationwide study, only one to three percent of eligible Medicare fee-for-service beneficiaries received chronic care management services in a given year. Per-participant spending reductions of five to eight percent translated into whole-ACO savings of just one to three percent because enrollment was too thin to generate population-level impact.

The evidence shows that when ACOs design their care models around sustained primary care engagement, the financial results follow. A 2023 cohort study of 504,471 Medicare fee-for-service beneficiaries, published in JAMA Network Open, found that the pattern of primary care visits matters as much as the fact of receiving care at all. Three interlocking dimensions drove financial outcomes: frequency of visits, regularity of visit spacing, and continuity with the same clinician. Among high-frequency users, those with irregular visit patterns had significantly worse outcomes: 1.70 versus 1.31 emergency department visits per person-year, more hospitalizations (0.69 versus 0.57), and higher Medicare spending ($20,731 versus $17,430) compared with those whose visits were regularly spaced. Beneficiaries in the most optimized visit-pattern groups experienced up to 53 percent fewer hospitalizations, and savings were 176 percent greater than those with irregular, noncontinuous patterns. The implication is clear: when patients see their providers with greater frequency, regularity, and continuity, costs come down and outcomes improve. The ACOs that have internalized this principle have produced the strongest results in Medicare. Oak Street Health, operating through its Acorn Network ACO and the Global and Professional Direct Contracting Model before its 2023 acquisition by CVS Health, averaged eight primary care visits per beneficiary per year, more than double the 2.5 to 3 visits typical for Medicare beneficiaries. Oak Street's ACO earned the fourth-highest CY20 shared savings rate serving a population with a 1.154 risk adjustment factor, placing it in the 90th to 95th percentile of SSP ACO population risk. Oak Street continued its CMMI model success in 2021, achieving the highest net savings of any Direct Contracting Entity and a perfect 100 percent quality score, and again in the first year of ACO REACH, where its ACO earned the highest shared savings rate among Standard ACOs in the Global risk arrangement. ChenMed, operating a similar high-touch model in Medicare Advantage with panels of approximately 450 patients per physician, averages 13.3 primary care visits per beneficiary per year and 189 minutes of face-to-face time annually, nine times the national average. These are not outliers explained by favorable patient selection. They are the predictable result of a care model designed around sustained, proactive engagement rather than periodic, reactive encounters.

Financial incentives directly improve patient engagement across multiple dimensions of care. A 2023 systematic review of 61 studies on interventions to reduce appointment no-shows found that financial incentives, such as gift cards of as little as $15, increased attendance odds by 94 percent. In a 2017 trial within a safety-net hospital's primary care hepatitis C program, $15 gift cards for attending key visits raised attendance from 61.2 percent to 72.7 percent. The effects were strongest when incentives were immediate, tangible, and tied to specific care actions. In a 2024 study of cardiovascular medication adherence among a near-Medicare-age population (average age 62 years), a financial incentive and refill reminder program achieved 77.9 percent adherence compared with 60.2 percent in matched controls, with a corresponding sixteen percent reduction in emergency department utilization. The connection to the visit-frequency evidence is direct, but the value proposition extends further: increasing appointment attendance, care plan completion, medication adherence, and preventive screening rates. These initiatives deliver measurable financial performance impact for ACOs when implemented as a core beneficiary engagement mechanism, not an ancillary feature.

CMS has recognized and actively promoted the value of beneficiary-facing financial incentives. Safe harbor provisions and civil monetary penalty exceptions permit beneficiary-facing financial incentives for care activities that reduce healthcare expenditures, such as treatment plan adherence and transportation vouchers for specialty care access, provided the incentive design is compliant. CMMI models have progressively expanded beneficiary incentive flexibilities. The MSSP Beneficiary Incentive Program permits a $20 incentive for qualifying primary care services. ACO REACH introduced a broader set of beneficiary engagement incentives, including chronic disease management rewards and cost-sharing support. The LEAD Model, launched in 2026, carries these incentives forward and adds an expanded Medical Nutrition Therapy benefit in PY27, with additional incentive structures under consideration for later model years. Most ACOs, however, have never operationalized these programs. CMS evaluations of beneficiary incentive programs in prior ACO models operating between 2016 and 2021 confirm that uptake has been low, with most ACOs reaching only small subsets of their aligned populations. No published evaluation has isolated the incremental impact of these programs on clinical or financial outcomes. The reasons are operational, not strategic. Seventy-seven percent of MSSP ACOs operate on six or more electronic health record systems. Ninety percent of healthcare professionals cite financial uncertainty as a primary barrier to value-based care participation. Administrative burden from overlapping quality reporting requirements consumes resources that might otherwise be directed toward engagement infrastructure. And unlike Medicare Advantage plans, which fund enhanced benefits through rebate dollars, ACO flexibility for beneficiary incentives often comes from providers' own margins. The value-based care solutions market reflects this constraint. Companies like Stellar Health have demonstrated the value of provider-facing incentive platforms, rewarding providers with immediate payments for completing clinical actions at the point of care. These tools close care gaps and improve quality scores. But they address only one side of the equation. No comparable infrastructure exists to financially incentivize patients to complete their side of the care plan. Without it, there is no mechanism placing beneficiaries in the driver's seat.

CareRewards is built to close this gap. CareRewards identifies real-time, customized financial incentive opportunities aligned with beneficiary care plans and ACO value-based care priorities through EHR and claims integration in a federally compliant design. By incentivizing the specific behaviors that reinforce optimal visit patterns, such as attending scheduled visits, adhering to medication and treatment regimens, completing preventive screenings, and participating in chronic disease management programs, CareRewards creates a mechanism for beneficiary engagement that the evidence links to lower costs and better outcomes. Providers design the care plan. CareRewards gives patients a financial reason to follow through on it. The result is a bidirectional engagement model in which both providers and patients have aligned incentives to sustain the relationship between visits, transforming reactive sick care into continuous, preventive health care. The platform operationalizes CMS-authorized beneficiary engagement mechanisms as core infrastructure, not a bolted-on feature, for Medicare ACO, Medicare Advantage, Medicaid, and commercial populations alike. The lesson from the past fifteen years is clear: the absence of a beneficiary incentive strategy results in poor financial outcomes. The next evolution in total cost of care reduction will be built on sustained engagement, by design.