While We’re Fixing Health Care, Let’s Get It Right

Marshall H. Chin, MD, MPH

President Trump and the Republican Congress have vowed to repeal and replace Obamacare, and Democrats and advocacy groups have pushed back in force. Consumer advocates concerned about the health care of vulnerable populations have focused on preventing loss of health insurance coverage. Insurance companies, for their part, warn that repeal will cause uncertainty in actuarial forecasting, leading to higher premiums and forcing their departure from some markets.

Amidst all the debate, who is asking about health disparities? Will new proposals address disparities in the quality of care affecting racial/ethnic minority patients and persons of lower socioeconomic status, and how to finance this care? These health policy areas have largely flown under the radar of the public and media, and represent powerful missed opportunities to reduce inequities in health outcomes. 

Access to health care through insurance is just the first step to effective health care, as differences in quality of care and outcomes persist among the insured across sociodemographic factors. To achieve health equity, we must deliberately design systems to deliver individualized carethat meets the needs of each patient. Just as important, our health care reimbursement system must specifically incentivize and support the provision of high-quality care to at-risk populations.

Health care financing systems greatly impact the kind of care that organizations provide and how invested they are in treating vulnerable populations. Two health policy issues beyond insurance are particularly salient for equity during this turbulent transition period. 

First, safety-net providers and institutions that care for the uninsured and other challenging patients are at significant financial risk. Safety-net patients often have multiple medical and mental health needs, as well as social and economic barriers. As part of the Affordable Care Act, hospitals accepted reductions in their Disproportionate Share Hospital payments that pay for uncompensated care, in exchange for expanding the number of insured patients. These hospitals are now at great financial risk as payments decrease and their numbers of uninsured and underinsured patients increase. The American Health Care Act and Republican health plan reforms that have been floated to date, such as per capita state block grants, tax credits for health insurance, premium support, and high-risk insurance pools, are likely to decrease the number of Americans with health insurance and increase the burden on safety-net providers.

Second, value-based purchasing systems that reward high-quality care have not been designed with equity as a goal. The gradual shift from fee-for-service payment that incentivizes high volume of services to value-based payment is a positive step. However, these new payment systems incentivize general improvement in quality of care and outcomes without attending to the effects of such systems on health disparities, nor how payment systems can be designed to explicitly reduce disparities.   For example, Medicare’s Hospital Readmissions Reduction Program rewards and penalizes hospitals based on whether they have higher than expected hospital readmission rates. Safety-net hospitals have been more likely to be penalized than hospitals caring for more educated, affluent patients.  The reasons for these higher readmission rates depend upon the hospital and can include sicker, tougher patients to care for, worse quality of care, and insufficient resources to build and support optimal care systems.  Legislation requiring social risk adjustment for payment was inserted into the 21st Century Cures Act, pushed by hospital advocacy groups.  This legislation requires the Centers for Medicare and Medicaid Services to adjust the financial penalties in the hospital readmission program for the proportion of a hospital’s patients that qualifies for both Medicare and Medicaid insurance, comparing a given hospital to similar hospitals.  The details of how this requirement will be operationalized will be critical. How can we design efficient care and payment systems that ensure that all patients have the best possible outcomes regardless of their race, ethnicity, or socioeconomic status? Care systems demonstrated to reduce disparities tailor care to the individual needs of each patient, provide close support and monitoring, and often involve the patient’s family and community in the solutions.  Health care organizations must make equity an integral part of their culture and quality improvement systems, as there is not a simple one-time fix for equity. But how can payment systems support and incentivize these equity efforts? For example, in a capitated or global payment system such as an accountable care organization, how do we ensure that adequate funds flow to infrastructure shown to reduce disparities, such as employing community health workers?

The grantees featured on the Finding Answers website are addressing these issues with payment and delivery system reforms tailored to the populations they serve. We invite you to review their projects, learn the insights they’ve garnered to date, and share your comments with @FndgAnswers.

While policymakers are listening, we must take the opportunity to shine a light on the innovations in health care payment and delivery that could finally make health equity a reality.

Marshall Chin is Program Director of Finding Answers: Solving Disparities Through Payment and Delivery System Reform. Support for this program is provided by the Robert Wood Johnson Foundation. The views expressed here do not necessarily reflect the views of the Foundation.