Speaker 1: Corporate giants like Amazon, UnitedHealth and CVS are investing billions into primary care practices, with deals tapping into the nation's $4 trillion health care market. And it's part of a shift in America's costly health care system, moving away from the traditional fee-for-service towards value-based care. That model is about paying providers for keeping patients healthy, while a fee-for-service model is when medical providers are paid based on the amount of services performed. So why are companies spending billions on primary care practices? And what could the growing shift to value-based care mean for doctors, patients and health insurers? The U.S. spends more per capita on health care than any other developed nation, but still fares worse on most major health measures. Health experts say the incentives baked into America's fee-for-service system are part of the problem.

Speaker 2: So critics say that under the fee-for-service model, it basically encourages providers to recommend as many services as possible, which drives up the cost of health care without necessarily ensuring patients are at the forefront of care.

Speaker 1: Essentially, doctors are rewarded for the volume of health care services they provide. Now, companies like Amazon, CVS and Walgreens are tapping into the growing value-based care movement. That model provides incentives to improve patient health outcomes within hospitals and doctors' offices.

Speaker 2: In value-based care, the idea is to keep track of the patient, to have more contact between primary care doctors and patients, and reduce the amount of time that people actually spend in hospitals where the costs are very high.

Speaker 1: Those costs are high for patients and health insurers. Some private health plans and government programs like Medicare have already adopted this model. They want to move more of the health care system to that approach, which makes providers accountable for some or all of the cost of their patients' care. While value-based care can be traced back decades, the 2010 Affordable Care Act accelerated the government's transition to this model.

Speaker 2: The government essentially said that it'll start shifting a lot of health care towards value-based care with the idea being to control costs.

Speaker 1: Still, there can be downsides to a value-based model.

Speaker 2: A key concern is that patients might be delayed in seeing specialists or in undergoing procedures, and basically insurers and providers could be doing that to prevent costs from escalating.

Speaker 1: One obstacle behind shifting to a value-based model is a shortage in primary care physicians, or PCPs. Because the U.S. health care system rewards more expensive procedures, medical students may prefer to become cardiologists or surgeons.

Speaker 2: A cardiologist makes close to $500,000 on average, whereas a primary care physician will make around $200,000.

Speaker 1: In other countries, PCPs compose a much higher proportion of all practicing physicians, for example, 45% in France compared to 12% in the United States. Yet PCPs play a central role in keeping people healthy and preventing problems before they begin.

Speaker 2: What happens is many Americans don't see a primary care physician. They can't find one, or they can't get an appointment for a month. Many times people don't know they have something, and they end up in a hospital where they have to get a much more expensive procedure.

Speaker 1: To help reduce higher health costs downstream, a host of companies are now spending billions on primary care practices. UnitedHealth, a massive conglomerate that includes 60,000 physicians and an insurance business, is one of the furthest along in PCP investments. Through its medical provider arm OptumCare, it has been buying up multi-specialty physician practices to provide care at home, virtually, and on-site. The idea is to keep people out of the hospital, because that's where the costs are highest. Meanwhile, Amazon is planning to buy primary care company One Medical, a practice that operates more than 180 medical offices in 25 U.S. markets. The $3.9 billion deal could give Amazon a larger foothold in offering health care services to employers. The company CVS Health is also stepping into the mix with a deal to pay $8 billion for Signify Health, a company focused on in-home evaluations.

Speaker 2: Ultimately, CVS wants to be not only your pharmacist and your insurer through its Aetna arm, but it also wants to be your village clinic.

Speaker 1: Then there's Walgreens. After buying a controlling stake in startup clinic chain VillageMD, it struck a roughly $9 billion deal to combine with Summit Health, a large owner of urgent care centers. So how exactly do these companies plan to make money off of these investments? In practice, a value-based reimbursement model means providing financial rewards for better patient outcomes. It can also be tied to a capitation system, which pays health care providers a fixed amount for each patient they deliver care to, per unit of time. This prioritizes the patient and cost-saving over services, which can significantly reduce health spending. Still, some health care economists worry whether this value-based approach will benefit patients or just reduce costs and improve the bottom line for providers and insurers.

Speaker 2: For example, a primary care physician might be more reluctant to allow a patient to go see a specialist or to perform a more expensive procedure.

Speaker 1: Ultimately, some health care economists say moving away from a fee-for-service model could help temper ballooning health care costs in the U.S.

Speaker 2: As more and more of these bigger companies get into value-based care, it's just going to accelerate the move towards value-based care and away from this fee-for-service model.