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Driving Health Equity in Value-Based Care Payment Models

Healthcare policymakers must consider the social determinants of health to drive health equity in value-based payment models.

health equity value-based payment models

Source: Thinkstock

By Sara Heath

- Healthcare’s shift from fee-for-service payments to value-based payment models is an important step toward higher-quality healthcare and more judicious healthcare spending. However, emerging payment models must take into account the social determinants of health in order to break the cycle of limited health equity in all payment structures, according to non-partisan advocacy group Families USA.

In a recent report, Families USA asserted that the current healthcare system is dysfunctional because of it high costs and subpar outcomes. The adoption of value-based payment models may help combat that dysfunction, but current models aren’t doing enough to ensure all patients reap the benefits of value-based care.

“Even as payment and delivery reform efforts present a valuable opportunity to accelerate the reduction of health and health care inequities, they also pose a serious risk to communities already facing systematic inequities,” the report authors wrote. “The communities most affected by health inequities must be included in the design and implementation of delivery and payment reforms, and policies must be developed with the explicit intent of advancing health equity.”

Currently, few health advocates have become involved in the development of value-based care models and payment policies. Most health equity efforts have centered on community health programs that, while important, do not always facilitate fixes to value-based payment models.

Taking into consideration underserved patient populations will help improve value-based care for everyone, the paper contended. Specifically, health equity experts should consider racial inequality, ethnicity, sex, sexual orientation, English language proficiency, immigration status, patient income, and geographic disparities when designing value-based care models.

READ MORE: Racial Disparities Limit Health Equity in Pain Management

While many community health partnerships should and currently are addressing those issues, payment models are another key aspect of driving health equity.

“The transformed health care system must be supported by a payment system designed to reward the provision of high-quality, equitable care to all,” the report authors stated.

“This is not a simple objective, and neither is it clear that we are headed in the right direction,” they added. “While existing fee-for-service payment has fostered our unequal health system, new payment models could themselves inadvertently create additional incentives for providers to avoid patients with more complex needs, or to reduce health care utilization among populations whose main challenge is the underutilization of appropriate care.”

Health equity experts should look at a set of priorities when assessing value-based payment model proposals.

First, experts must ask whether a value-based care model will have a disparate negative on certain communities. Which patients do models benefit, and who will face consequences of a payment model? For example, does a value-based care model benefit providers who generally treat non-complex patients, while penalizing providers who treat high-risk patients with multiple complex conditions?

READ MORE: Using Social Determinants of Health in Patient-Centered Care

Such provider penalties could hinder a provider’s ability to continue to deliver high-quality care to disadvantaged, high-risk patients, thus perpetuating health inequity.

Experts must also look at how payment models risk adjust for clinical and social risk. Many current value-based care models adjust for clinical risk, such as patients with multiple complex chronic conditions. This puts providers on a level playing field for earning payment incentives.

However, there are concerns that these risk adjustment algorithms are not sophisticated enough to take into account social factors that could also influence a provider’s ability to meet value-based care metrics.

Next, policy experts should identify underlying resource inequalities. Access to certain health-related resources could impact a provider’s ability to deliver high-equality, value-based care.

“For example, many safety net, rural, and community hospitals have been systemically underfunded and are operating under financially precarious conditions, with negative margins that leave little room to invest in quality improvement and expanding services that would improve patient outcomes and their metrics,” the report noted.

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Finally, policy experts must consider American Indian and Alaska Native populations when designing payment models.

“Any payment and delivery reform effort must respect the federal government’s trust responsibility to tribes, along with their sovereignty,” the report said. “Many of the policy options described in this paper apply to the Indian Health Service, but special care must be taken to ensure that this chronically underfunded system not be further financially strained.”

Those considerations led the report authors into six key policy points.

First, there must be explicit policy initiatives that reward the creation of sustained health equity projects.

Next, there must be specific investments made into safety net and community health centers. These facilities need support for language services, cultural sensitivity training, and geographic accessibility services. These are fairly unique needs for these facilities and are necessary for them to thrive in value-based care models.

Building community health partnerships will also be integral to driving health equity in value-based care models. Partnerships may support patients outside the four walls of the hospital and help combat social needs and some discrimination.

Additionally, provider access to evidence-based treatment resources can help close care gaps.

Each value-based care model must also include some mechanism for measuring health equity and the social determinants of health. This will ensure providers actually deliver on health equity programs.

Finally, policy experts should foster a diverse healthcare workforce, the report stated. This will increase representation and the likelihood that healthcare delivers on unique population needs.

At the root of all of these efforts is integrating the patient voice into policymaking, the report authors asserted. This remains true for all patients and policies, but is especially important for initiatives targeted at minority or underserved patients.

“There is one overarching priority that cuts across all of the policy domains: ensuring the effective inclusion of the voices and priorities of communities of color, and other disadvantaged groups, in decision-making,” the report concluded. “This is not only the right thing to do as a matter of equity to support agency and empowerment, but it is the smart thing to do because the ultimate output will be of higher quality and more likely to be effective.”



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