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Reducing Health Care Disparities through Payment Reform

How can we deliver and pay for care in a way that reduces disparities? While much is now known about how to identify and reduce disparities via quality improvement, such programs are often under-resourced or not financially feasible for the long-term. Payment reform may be a potential solution, but reforms that do not explicitly consider disparities run the risk of unintentionally exacerbating or creating disparities.

In 2014, the Robert Wood Johnson Foundation (RWJF) funded Finding Answers to expand its focus to examine disparities interventions in the context of innovative ways to pay for care.

The Finding Answers: Payment Reform and Disparities program’s core goals were to:

  • Explore promising ways to reduce disparities by paying for care differently
  • Share practical lessons to inform other organizations who want to do similar work

Key Findings

The three grantee projects have now finished. From their results, Finding Answers has compiled comprehensive lessons learned to help other organizations as they combine payment reform and care delivery reform for optimal effectiveness in reducing health care disparities. You can read the report here.

A few key findings from the three grantees:

  • Designing and implementing effective financial incentives to reduce disparities has potential but is more complex than anticipated. There are many things other than money that healthcare teams find motivating and an incorrectly designed financial incentive system can discourage them. Financial incentives are also very challenging and information technology-intensive to implement. Integrated payment and delivery reforms to address disparities need to be tailored to the organizations and settings. There is no one-size-fits-all answer.
  • There are many benefits of team-level incentives. One of the advantages is that they can encourage integrated care management as team members strive toward a common goal.
  • Data management is critical. Revealing and combating health care disparities requires sustained collection, integration and reporting of race, ethnicity and language (REL) or other key demographic data. Updates on the status of a disparity and related quality of care measures may be more motivating to some health care team members than a financial incentive. 
  • Patient navigators and case workers (especially those who share language, identity, or heritage with a vulnerable group) can make a big difference in disparities—if their positions are funded. Flexible funding models and high-level commitment are necessary to ensure their success. Much work remains in changing policy and practice so that payers cover peer-based models.
  • Providers and other health care team members are usually surprised about disparities in their patient care. But once they find out, they are highly motivated to do something about it—whether or not you give them money.
  • Institutions, leaders, and individual team members must buy in. Policy change and value-based payment systems can encourage health care leaders to prioritize disparities reduction in a sustained way—and make it financially viable to do so. They can also incentivize the hard work of culture change necessary to address disparities.
  • Providers are motivated to reduce disparities. New financial models might make it more possible to do so, especially when aligned with state Medicaid programs and federal policies.

Funded Pilot Projects

In this phase, Finding Answers managed three pilot projects working to achieve disparities reductions through a combination of payment and delivery reform. Click on the links below to explore our grantees’ work:

George Mason University, Virginia

Improving screening and disease management for diverse, multilingual patients at safety-net clinics in northern Virginia using team quality improvement incentives.

Icahn School of Medicine at Mount Sinai, New York

Ensuring postpartum care for Medicaid-covered, high-risk, mostly minority women in a New York City health system through physician incentives and coordinated care.

University of Washington, Oregon

Community-based oral health care for mothers and children in rural Oregon using expanded-practice dental hygienists, global budgeting and a team payment incentive.

National Program Office

Under the direction of Marshall H. Chin, MD, MPH, the national program office continues to contribute to national conversations about reducing disparities. See our News and Publications pages for the most up-to-date information and links to our work.