From Growth Story to Infrastructure Story

For nearly a decade, delegated risk in Medicare Advantage ran on a familiar script: take risk, grow panels, improve documentation, expand geographically. It worked, sometimes exceptionally well, because the economics were forgiving. MA enrollment climbed. Benchmarks were supportive. Star bonuses added lift. Risk scores rose. COVID-era utilization suppression created real cushion. You did not need insurer-grade infrastructure to produce margin. You needed scale and a decent coding lift.

That backdrop has shifted. Utilization came back. Star recalibrations trimmed bonus tailwinds. Rate updates no longer outrun medical cost trend. V28 compressed RAF yield in categories that used to carry more weight. RADV enforcement raised the bar on documentation. These pressures did not show up sequentially. They piled on. When plan margins tighten, delegated economics tighten faster. The cushion disappears. Small imprecisions surface. Operational gaps turn into margin erosion.

Some organizations will treat this as cyclical pressure. It is not. The first wave of value-based care was growth-led. The next phase is infrastructure-led. That is a different skill set.

The Asymmetry Worth Understanding

Insurance companies are built to manage risk. Most provider organizations are not. That is not a criticism. It is structural. Risk moved downstream faster than the tools and expertise needed to manage it.

Look at a national MA carrier. You will see actuarial teams modeling trend and bid margin. Risk adjustment operations capturing RAF at scale. Real-time utilization management. Payment integrity units recovering leakage before it settles. Quality teams managing Star measures to protect bonus revenue. Compliance infrastructure designed around RADV audit cycles. The analytics matter, but the machinery matters more, the systems that turn insight into dollars.

Now look at most delegated provider organizations. Limited or no in-house actuarial depth. Plan-provided performance reports that arrive months after the fact. Retrospective coding vendors pushing large chart volumes. Basic dashboards. Occasional consulting engagements. Often no systematic utilization management, payment integrity, or integrated quality infrastructure.

The party assuming the volatility and documentation exposure frequently has less operational capability than the party that transferred it. When margins were wide, that imbalance was tolerable. In a normalized environment, it is destabilizing.

What Infrastructure Actually Looks Like

The first wave rewarded growth, panel expansion, new markets, rapid capitation, capital formation. The next phase rewards precision. The basis points matter now. You need to know where value leaks and have the operational capacity to close it.

Risk Adjustment in a V28 World

In a post-V28 environment, especially without unlinked chart submissions, volume by itself is not a strategy. Processing more charts does not guarantee incremental revenue. The organizations that perform well will pair clinical precision with operational rigor. Tools that focus review on diagnoses and encounters that actually change economics. The ability to interpret plan data accurately. Targeted action. Documentation that is compliant and audit-ready.

It is not about pushing more charts through a vendor. It is about knowing which charts deserve attention, which diagnoses create real impact, and which submissions will hold up when reviewed.

The Functions That Protect the Contract

Risk adjustment is one lever. Contract economics are routinely tied to quality thresholds, utilization management obligations, and other delegated functions that quietly determine margin.

Miss a quality threshold and revenue drops. Let utilization trend drift and it erodes margin slowly, then all at once. Weak reconciliation obscures performance until it is too late to adjust. In a tight environment, these effects stack.

Most leaders understand these risks conceptually. The differentiator is not awareness. It is whether there is continuous monitoring, early variance detection, and operational intervention before a missed metric turns into a financial surprise.

Financial Visibility as an Operating Capability

Underneath everything is financial visibility. Not a quarterly deck. An operating function.

Accrual accuracy. Trend forecasting. Reserve adequacy. Attribution. Insurers treat these as core capabilities. Many provider organizations still receive lagged, partial visibility from plan partners, sometimes months after the economics have shifted.

Without real-time clarity, even strong clinical performance can produce financial ambiguity. You can improve quality and still not know whether you are earning margin on a contract until reconciliation. That is not just reporting lag. It is operational blindness.

These Functions Have to Connect

A risk adjustment gain offset by unmanaged utilization is noise. A quality improvement untethered from contract economics is anecdote. In the earlier phase, you could run these domains independently, or loosely coordinate them, and still generate acceptable returns.

Now the margin sits in the connections. How a coding improvement flows through revenue. How utilization trend interacts with quality thresholds. How contract terms create dependencies that require coordinated management.

The organizations navigating this well do not just possess each capability. They understand how the pieces interact financially and operationally. The connective tissue matters as much as the individual functions.

Building vs. Buying the Machine

None of this is trivial to build. Insurers developed these capabilities over decades, supported by actuarial teams, claims infrastructure, and regulatory depth that provider organizations were never designed to replicate. That is not failure. It is history.

At the same time, layering point solutions does not solve it. A risk adjustment vendor here. A quality reporting tool there. A utilization dashboard somewhere else. Internal teams trying to stitch them together without the mandate or resources to integrate. It looks like infrastructure. It is not. Data sits in silos. Functions operate independently. No one sees the unified economic picture.

Some groups will build pieces internally, and at scale that can make sense. For most delegated organizations, the question is not whether to replicate an insurer in-house. It is whether the infrastructure exists in a coherent, continuous form, similar to how most health systems rely on established EHR and claims platforms rather than building their own from scratch.

What matters is that the capability operates continuously, not episodically, and that risk adjustment, utilization, quality, and financial performance are connected into a single operating view.

The Path Forward

None of this invalidates value-based care. The model still works. The math just tightened.

Over the next five years, the organizations that succeed will not necessarily be those that took on the most risk. They will be the ones that recognized the shift from expansion to execution and adjusted their operating model accordingly. Taking risk was the opening move. Managing it well is what determines the outcome.