Value-Based Healthcare Investing: Oncology Practices Thriving Under CMS Models

The U.S. healthcare landscape is undergoing a seismic shift as oncology practices increasingly adopt value-based care (VBC) models, driven by CMS initiatives and the promise of improved financial and clinical outcomes. For investors, this transition represents a compelling opportunity, particularly in oncology—a sector projected to grow at a compound annual rate of 10.8% through 2034 Oncology Market Global Report 2025: Industry Trends, Key Growth Drivers^[1]. The convergence of regulatory momentum, technological innovation, and data-driven care delivery is reshaping how cancer care is financed and delivered, creating a fertile ground for strategic investment.

CMS Models: Catalysts for Financial and Clinical Success

CMS has emerged as a pivotal force in accelerating VBC adoption through programs like the Enhancing Oncology Model (EOM) and the Oncology Care Model (OCM). The EOM, launched in 2023, incentivizes oncology practices to reduce costs while maintaining—or improving—patient outcomes. Early results from participants like the American Oncology Network (AON) underscore the model's potential: AON achieved $6 million in cost savings during the first performance period of EOM while enhancing patient experience and outcomes American Oncology Network Achieves Success in First Performance Period of CMMI’s Enhancing Oncology Model^[2]. This success builds on prior performance in the OCM, where AON practices reduced expenditures by 2.6% compared to peers American Oncology Network Achieves Success in First Performance Period of CMMI’s Enhancing Oncology Model^[2].

Thyme Care, a value-based care enabler, exemplifies how technology and clinical expertise can drive savings. By implementing strategies such as therapeutic drug interchange and dose optimization, Thyme Care reduced total costs by $594 per month for navigated patients compared to a control group How Thyme Care Drives Reductions in Drug Spend in the Enhancing Oncology Model^[3]. These outcomes highlight the viability of two-sided risk models, where practices share in both the financial rewards and penalties of cost management.

Market Growth: A $866 Billion Opportunity by 2034

The oncology market's projected expansion from $320.3 billion in 2024 to $866.1 billion by 2034 Oncology Market Global Report 2025: Industry Trends, Key Growth Drivers^[1] is fueled by multiple factors. Rising cancer incidence, advancements in precision medicine, and breakthroughs in immunotherapy and CAR-T cell therapies are redefining treatment paradigms. For instance, the cancer treatment segment alone is expected to grow at a faster CAGR of 11.3% during the forecast period, driven by regulatory approvals for novel therapies and increased demand for personalized care Oncology Market Global Report 2025: Industry Trends, Key Growth Drivers^[1].

The U.S. remains a global leader, with its oncology market projected to reach $377.1 billion by 2034 Oncology Market Global Report 2025: Industry Trends, Key Growth Drivers^[1]. This growth is underpinned by robust R&D investment, government support for cancer research, and the adoption of AI-driven diagnostics. For example, AI-based predictive imaging and liquid biopsies are enhancing early detection rates, directly improving patient outcomes and reducing long-term costs Oncology Market Global Report 2025: Industry Trends, Key Growth Drivers^[1].

Innovations and Biomarkers: The Next Frontier

Biomarker-driven strategies are further accelerating value-based oncology care. ALX Oncology's ASPEN-06 trial, which identified CD47 overexpression as a predictive biomarker for evorpacept efficacy in HER2-positive gastric cancer, illustrates this trend. Patients with high CD47 expression achieved a 65% objective response rate compared to 26% with standard therapy ALX Oncology Reports Second Quarter 2025 Financial Results and Clinical Updates^[4]. Such advancements enable hyper-personalized treatment plans, aligning with VBC's focus on outcomes.

Challenges and Strategic Considerations

Despite the optimism, challenges persist. Resource constraints, lack of consensus on clinical pathways, and financial risk exposure remain barriers to full VBC adoption American Oncology Network Achieves Success in First Performance Period of CMMI’s Enhancing Oncology Model^[2]. However, practices that invest in data analytics, care coordination, and patient engagement—such as Carrum Health's bundled care models—are better positioned to navigate these hurdles.

Conclusion: A Lucrative Investment Horizon

For investors, the oncology VBC sector offers a dual promise: scalable financial returns and meaningful clinical impact. As CMS expands models like the Home Health Value-Based Purchasing (HHVBP) and the mandatory TEAM model in 2026, the shift toward outcomes-based care will only accelerate. Companies leveraging data analytics, biomarker research, and innovative payment structures—like Thyme Care and AON—are poised to dominate this evolving landscape.

The time to act is now. With the oncology market on a trajectory to nearly triple in value over the next decade, strategic investments in VBC-aligned oncology practices and technologies will yield substantial rewards for forward-thinking investors.