The 4 Barriers Stalling Care Transformation

Overcome the barriers blocking your organization, and learn how to turn proactive care management into net new operating income.

Phamily
July 14, 2026

Patients with chronic conditions need help and support every day, but care management has always been too expensive to scale across every patient who needs it. That changed in 2025 when CMS introduced Advanced Primary Care Management (APCM). APCM pays you to manage all your Medicare patients — not just the sickest few — turning proactive care into a source of net operating income. So, why aren't more organizations already doing it? For years, four barriers have been stalling care transformation. Here's what's changed.

How well do you actually know your patients? Most health systems point to their data: diagnoses, lab results, risk scores, the care gaps flagged in the EHR. But your data only tell you about the 4 or 5 times your patient came in for a visit. What happened the other 360 days?

Research on chronic-care self-management estimates that more than 99 percent of daily care is carried out by patients themselves, outside any clinical setting, with less than 1 percent of their time spent with a care team. And on those days, when no one is checking in, small things slip through and surface only once it is too late. A prescription runs out and never gets refilled. A dose gets cut to stretch a bottle the patient can’t afford. A new symptom seems too minor to mention, until it isn’t. Supporting patients in those 360 days catches problems early while they are still small.

Almost everyone in healthcare agrees this is worth doing. So why aren’t more organizations doing it? It isn’t for lack of will. It is because four barriers get in the way of care transformation.

The 4 barriers that get in the way of care transformation

Margins are too thin to fund care between visits. The traditional care management model reaches only the sickest patients, even when it runs well. Building a broader program takes staff most health systems don’t have. And leadership has no attention left to take it on. Because the four barriers are connected, solving one doesn’t remove the other three, and the effort runs out of momentum.

1. The dominant payment model pays for visits, not for what happens between those visits

Fee-for-service pays hospitals for visits and procedures, not for managing patients across the year between those visits, so the work that closes the 360-day gap generates little or no revenue. That shortfall hits hardest on the organizations least able to absorb it. Rural hospital margins have improved overall, but Chartis reports that 41.2 percent are still operating in the red, and independent community hospitals carry the same pressure without a larger system to spread it across. Value-based contracts are meant to reward year-round management, but the return comes only after years of upfront spending on staffing and infrastructure, which the American Hospital Association has noted most organizations cannot easily afford.

2. The traditional way of managing patients cannot cover a whole population

Proactive care management is not new; organizations have run care management programs for decades. But the traditional model is built around billable time. A care manager gets on the phone with one patient, works through their needs, and logs the minutes, because under the old payment codes, the time itself is what gets reimbursed. There are only so many of those calls in a day. That caps even the most efficient care manager at a few hundred patients. To cover a panel of 20,000, an organization would have to hire 100 to 200 care managers, plus the supervisors and program leadership to run them. So the model has only ever been used for the sickest patients, where the acuity justifies that cost. The much larger rising-risk group has always been left out.

3. Even with funding and a model that scales, someone has to build the program

A population-wide program needs three things: dedicated clinical staff to do the work, purpose-built technology to run it, and clinical protocols rigorous enough to keep care safe and consistent across thousands of patients. Staffing means recruiting and retaining care managers and clinicians in the middle of a national hiring shortage. The technology is not an off-the-shelf EHR; it is the analytics to stratify a population, flag rising risk, and track every open task across the panel. And the clinical protocols have to be written, tested, and kept current as care scales to thousands of patients. Standing all of this up is a multi-year effort, and it is hardest for the rural and independent hospitals that need it most, where hiring and retention are already a constant strain. A federal advisory committee to HHS has noted that limited financial resources keep many rural providers from building the health IT infrastructure that value-based models require, and that their teams often lack the data and analytics capacity these programs demand. The barrier is structural, not a matter of effort or will.

4. Building the program takes attention leadership cannot spare

A new clinical service line needs continued focus from the executives who would sponsor it, and that focus is already spent on the daily work of running the organization. An organization can fund the program and staff it, but it cannot buy or delegate the attention needed to build one. For most organizations, the question was never whether proactive care is worth doing. It is whether anyone has the capacity to take it on. Two were real limits, set by how Medicare paid and by a model that could not scale, and both have since changed. The other two were never barriers to care transformation at all. They were barriers to building it yourself.

Funding and scale were structural limits. Both have now changed.

The funding barrier changed in 2025, when CMS introduced Advanced Primary Care Management (APCM), a model that pays a set monthly amount for managing each patient across your whole panel, with no minimum time to log and no visit required. The revenue is recurring, and it begins as soon as you enroll patients. APCM lifts the limit on scalability, too. Traditional care management capped out at a few hundred patients per manager for one reason: it was billed by the minute, so the hours in a day set a hard ceiling. By removing the time requirement, APCM removes that ceiling. Payment is only half of the answer, though.The other half is operational: organizing clinical staff so each works at the top of their license, and letting technology absorb the documentation and coordination, which together allow a single care manager to carry a panel of a few thousand patients rather than a few hundred.

Infrastructure and bandwidth were never limits. They were assumptions.

A lack of infrastructure and executive bandwidth are genuine problems, but they are not barriers to care transformation. You may not have the staff, the technology, or the clinical protocols to manage a whole population, and you may not have the attention to spare to build all of it. But that is not a barrier to care transformation. It is only a barrier to building it in-house.

And building in-house was never the only option. A partner can run all of this at scale, under your brand and your clinicians’ oversight, carrying the day-to-day load so it never demands the executive attention a new service line would. The fair concern is that this is outsourcing, and plenty of leaders have handed a vendor a process and gotten back a mess. But there is a difference between handing over the work and handing over the care. With the right partner, you are not giving up control; you are getting the capability without building it from scratch.

A community hospital is already doing this profitably for 20,000+ patients

Silver Cross, an independent community hospital, runs full-service wraparound care management for 20,000 patients. It reached that scale in under six months. The program generates more than $5 million in annual net profit, has reduced readmissions by 13 percent, and, in a retrospective study, lowered total cost of care by $1,885 per member per year against a control group.This is what managing the 360-day gap looks like when a hospital runs the capability instead of building it from scratch.

The advantage compounds for whoever moves first. Because each Medicare patient can be enrolled in APCM by only one practice in a given month, the patients you enroll stay yours as long as you keep them engaged, and the ones you don’t are open to whoever enrolls them first. Moving early secures your share of the local Medicare market before competitors do. The financial calendar matters too. OBBBA and related policy changes are set to cut into Medicaid revenue heavily between 2027 and 2029, so the pressure on margins is still ahead. A program built now reaches full enrollment and steady-state revenue before those harder years, instead of being stood up in the middle of them.

So, that leaves a question rather than an obstacle: not whether care transformation is possible, but whether to move now, while enrollment is open and the hardest financial years are still ahead, or later, once competitors have claimed your patients and the pressure has already arrived.

You've seen the case. Now get the playbook.

This article is part of Enterprise Care Transformation, Phamily’s webinar series on turning proactive care into a source of net new operating income. Ten sessions, one complete playbook.