Reducing health inequity for value-based care

August 19, 2022
By Joseph Webb

Without a doubt, the business of healthcare has experienced significant changes, from the implementation of the Affordable Care Act to the concept of value-based care.

Value-based care (VBC) is based on the view that healthcare professionals should be reimbursed based on the quality of care they deliver rather than volume of services provided. In VBC arrangements, providers contract with payers, such as Medicare, Medicaid, or commercial insurance companies to care for a defined set of patients, known as their “attributed patients.”

The goal of value-based care is to support individuals in achieving their highest possible level of wellness rather than waiting until they are ill to provide care. But under VBC, providers with poorer outcomes are financially penalized, disproportionally impacting safety-net hospitals.

Value-based care and safety-net hospitals
In 2001, safety-net hospitals were defined by the Institute of Medicine as hospitals providing care to a large share of uninsured or Medicaid patients, regardless of their ability to pay. As a result, many safety-net hospitals are under more financial stress than non-safety-net hospitals and rely on supplemental funding from the state and the federal government to remain operational. Insurance coverage provided through Medicaid and Medicare, while critical, does not typically cover the actual cost of care, which results in safety-net hospitals relying on supplemental government funding to continue to provide necessary healthcare services to patients. Such hospitals often perform worse on the value metrics that have the most significant weight in the VBC: process-of-care measures and patient experience measures.

One metric used to measure care is the number of healthcare-associated infections, an essential target of efforts in the United States to connect VBC to payment.

However, in a time-series study of 618 hospitals, implementation of federal value-based incentive programs was not associated with any improvements in targeted healthcare-associated infection rates or with changes in disparities in infection rates among safety-net and non-safety-net hospitals.

Studies have shown worse outcomes in many targeted quality measures adopted by federal value-based incentive programs among low-income patients and those who identify as members of racial/ethnic minority groups compared with patients without socioeconomic disadvantages. And safety-net hospitals, which care for a higher proportion of patients with low socioeconomic status tend to demonstrate worse performance.

A patient coming to a safety-net hospital is often experiencing chronic health conditions such as high blood pressure, diabetes, or obesity that are not well-controlled and managed. This high-risk population, which typically seeks hospital care through the Emergency Department, comprises only 5–10% of all patients treated, yet consumes 60–70% of hospital resources.

Which leads to the question: How can a safety-net hospital effectively manage healthcare for a high-risk patient population and still meet the recommended quality standards and requirements for funding?

An unexpected pandemic outcome
The recent Covid-19 pandemic required healthcare to develop new approaches to managing patient health but had a minimal financial impact on value-based systems, in which reimbursements are tied to patients’ health outcomes regardless of the number of visits and treatments. Instead, it highlighted the need for value-based care. Six in 10 employers are considering or already engaged in value-based design approaches.

The pandemic also revealed those healthcare systems that were not effectively managing resources, and turned a spotlight on those better managing resources, including Nashville General Hospital (NGH), which grew in terms of patient volume, referrals to specialists, and other improvement metrics. Given the available
research, this is quite an achievement. When asked how this was accomplished, I am quick to point to evidence-based care delivery models that dovetail with the goals of most value-based care programs.

At Nashville General, we focus on underlying issues that create health disparities, including health literacy and social determinants of health (SDOH). For example, Nashville General has put programs in place such as CHEN (Congregational Health and Education Network) and our Food Pharmacy, addressing health literacy through a trusted resource and food scarcity, especially for those who cannot afford healthier options that directly impact their chronic conditions, such as diabetes and heart disease. Through our efforts and a population focus, where we intervene with our frequent flyers through aggressive case management, we have been able to “live within our means” while still addressing root causes for issues that patients have in being compliant or seeking care appropriately. As a result, we have attracted patients with commercial insurance, transforming our patient mix from 60% uninsured/40% insurance to 60% insured/40% uninsured---in spite of the pandemic.

A more comprehensive approach
More healthcare systems and payers must acknowledge the impact of social and structural determinants of health on the ability of patients to access care and adhere to a care plan. In doing so, value-based care works well in a for-profit, nonprofit, and safety-net hospital environment.

Only then will there be real “value” in value-based care.

About the author: Joseph Webb is the chief executive officer of Nashville General.