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Reducing health inequity for value-based care

August 19, 2022
From the August 2022 issue of HealthCare Business News magazine

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.”

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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.

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