Moving Value-Based Payment Models to a Disparities Paradigm

February 28, 2018

An opinion piece in the Annals of Internal Medicine makes the case for shifting value-based payment models to address the issue of healthcare disparities directly into hospitals’ financial calculations, incentivizing institutions to address the issue head-on without sacrificing quality.

An opinion piece in the Annals of Internal Medicine makes the case for shifting value-based payment models to address the issue of healthcare disparities directly into hospitals’ financial calculations, incentivizing institutions to address the issue head-on without sacrificing quality. Such a shift is needed to promote equity as a healthcare goal and to further drive the adoption of innovative health delivery solutions that address social risks, the article said.

Otherwise, the current growth in value-based payment models will unintentionally worsen healthcare disparities by disadvantaging hospitals caring for socially at-risk populations, the authors wrote in the February 27 issue.

The current method of actuarially adjusting payments and penalties using socioeconomic risk factors is insufficient because it may not be measuring the right things, the authors wrote. In addition, there are concerns that adjusting for socioeconomic risk may lower quality standards, disincentivizing hospitals to improve performance.

Determining which metric to use is key when looking at disparities in healthcare delivery and outcomes, both to improve risk adjustment and to establish which measures are actionable.

The authors said risk adjustments need to be examined as if they accounted for factors like socioeconomic position, social relationships, and community context in order to avoid underpaying hospitals that disproportionately serve socially at-risk patients.

As an example of how to do does this well, the study cited the Medicaid practice model in Massachusetts, which incorporated medical and social risk factors into hospital payments by matching predicted to actual costs for high-risk patients. In addition, hospitals need to be paid to reduce disparities directly.

Two other suggested approached are:

  • Paying for improvements in healthcare outcomes for populations known to have high social risks, such as minority, low-income, and dual-eligible patients.
  • Paying directly for services that disproportionately affect high-risk communities, such as mental health care, which is underpaid, as opposed to high-cost services, such as oncology and cardiovascular care, which have been promoted under the value-based payment model.

Knowledge of local initiatives will help drive this process, the authors said. In addition, the article noted that CMS recently invested $157 million in testing the Accountable Health Communities Model to screen Medicaid and Medicare beneficiaries for health-related social needs and connect them with local services.

The authors also cited the Camden Coalition of Healthcare Providers and the Abdul Latif Jameel Poverty Action Lab at the Massachusetts Institute of Technology, which are conducting a randomized trial on the effect of care management initiatives with community linkages on readmissions for high-risk patients.

Reference

Chaiyachati KH, Bhatt J, Zhu JM. Time for value-based payment models to adopt a disparities-sensitive frame ahift. Ann Intern Med. doi:10.7326/M17-2590. Published February 27, 2018. Accessed February 28, 2018.