Payment is a powerful motivator. In the US, clinicians are paid more for providing more services, regardless of how they affect patients’ health. This dynamic has fueled an inefficient system in which care is often unaffordable and produces disappointing outcomes for many Americans.
Recognizing the misalignment between the payment and health, policymakers have spent a decade shifting financial incentives toward “value-based payment” that emphasizes better health outcomes and cost-conscious care. This approach has created a major cultural shift and prompted work across the health care industry to reduce waste and improve care.
But these changes have done little to address health care disparities – one of the most critical problems in the US health care system.
In a recent article published in the Journal of the American Medical Association, several of us highlighted why value-based payment has not led to more equitable care. Disparities have been widely viewed as “unintended consequences” – issues to monitor after making payment changes rather than address beforehand. While it tries to reward good health outcomes, value-based payment also does not account for other factors, such as social drivers of health, that impede better outcomes for historically marginalized groups like racial and ethnic minorities and individuals with low income.
The US cannot make meaningful progress without tackling these issues and realigning payment around equity. To that end, we call on the health care community to support and commit to advancing health equity in payment – a set of principles, policies, and methods for using health care payment to achieve greater equity.
This call is grounded in several beliefs. First, because intention precedes implementation, we cannot meaningfully address disparities so long as they are tacitly accepted as unintended consequences of how we pay for care. We acknowledge the need to set a new, explicit intention to pay for health care in ways that help eradicate inequity. This intention includes both removing existing payment incentives that unintentionally undercut equity as well as creating new incentives that promote it. Second, payment changes should address differences in how a clinician or organization treats different types of patients as well as differences between clinicians or organizations, which may be influenced by broader social and structural factors. Third, no payment system changes occur in a vacuum, and efforts to advance health equity in payment should utilize beneficial parts of existing data, technology, infrastructure whenever possible.
In that context, key work areas involve (a) adapting or pivoting from existing performance measures to develop ways to measure disparities within payment arrangements; (b) aligning payment incentives to directly support the goal of eliminating disparities; and (c) implementing changes into practice by harmonizing existing and new equity-focused incentives. Achieving these goals will require several steps in the coming years:
Convene a multi-stakeholder coalition. The work to advance equity through payment requires the voices of patients, communities, clinicians, health care organizations, insurers, employers, and other purchasers. We need diverse perspectives to guide the substantive changes needed in payment policies, programs, and methods.
Formally incorporate equity into the concept of value-based payment. In health care, value has been widely understood as quality relative to cost. In turn, value-based payment thus far has hinged on whether reforms improve quality and/or reduce costs overall – how large the benefits are across all patients. But nowhere in the value equation is the concept of equity – how even the benefits are between different groups of patients. This is a glaring omission that future work should address. We cannot be comfortable accepting concepts of value that do not consider equity, or improvements in value that come at the expense of the disadvantaged.
Create an implementation roadmap. Centering payment on equity-based goals is not a simple “flip of the switch” effort. We must articulate a roadmap for implementing real-world payment programs and methods that will make progress toward greater health equity. This roadmap should provide guidance on when and how to overcome barriers; harness aspects of existing payment system; make the necessary advances in data collection, performance measurement, and incentive design; and evaluate the impact of enacted changes.
Set bold, longitudinal goals. One way to demonstrate an intention to align payment with equity is by setting bold goals for changes in payment. For instance, health care leaders could set goals over time to incorporate equity measures into all payment models or tie a proportion of all reimbursement to equity measure performance. Decision-makers could also set goals for incorporating equity-focused payment changes into practice.
Conduct evaluations. Several decades of experience have made it undeniably clear: historically marginalized groups like racial and ethnic minorities and individuals with low income face widespread health care disparities. Yet remarkably little work has evaluated whether and how new payment methods affect disparities for these populations. Efforts to advance health equity in payment should be coupled with evaluation, the findings of which can then guide work evolution and refinement. Ultimately, we can only change and improve on what we measure and motivate.
Of course, this work will require great effort, and no payment approach is immune to unintended consequences. Reimbursement is also just one among many areas where changes are needed to address inequity. But payment is a powerful motivator, and intentional changes can harness it into a powerful solution to inequity. The health care community should undertake this work without delay.