Wavemaker Three-Sixty Health LP, a venture capital firm based in Pasadena, has launched a fund centered on value-based health practices.

The fund, targeted at $25 million, will invest in early-stage health care companies in Southern California that aim to be paid for quality health care instead of fee-for-service, its executives announced this week.

The value-based care payment model, unlike traditional fee-for-service, rewards health care organizations for cost control and quality gains. Reimbursements are calculated by accounting for measures of quality and overall health, with providers pushed to better engage patients and to employ evidence-based medicine, improved health IT and data analytics in order to get paid.

“Healthcare’s transition away from fee-for-service to value-based payments started out a decade ago as a concept,” said John Nackel, founder and general partner in Wavemaker Three-Sixty, in a statement. “…Our fund is coming online at just the right moment.”

The fund is a joint venture between Wavemaker Partners, a venture capital firm based in West Los Angeles, and Three-Sixty Advisory Group, an investment advisory company based in Pasadena.

Health business reporter Dana Bartholomew can be reached at [email protected]. Follow him on Twitter @_DanaBart.