The following is a guest article by Paul Barnes, Partner at CWH Advisors
Today, there is widespread consensus that Social Determinants of Health (SDoH) have an impact on health inequities among various populations; resource scarcity in food, housing and other areas result in different health utilization and outcomes. Although this focus started with attention to the population covered by Medicaid, the healthcare field has recognized that health equity is a relevant issue to populations covered by Medicare, Commercial, and other health insurance coverage.
At the same time, the resources devoted to Value Based Contracting (VBC) are dominating the healthcare landscape. We are defining VBC as a methodology to align incentives between a Payor and a Provider. The Payor may be a health plan, an ACO, a risk-bearing entity, or a governmental entity. The Provider may be a Traditional Provider, a Clinical Integrated Network, a Risk Bearing Entity, or a variety of other types of provider-driven organizations.
Although there is strong consensus about the importance of VBC, there is wide variability in the structure and even developmental stage of VBC arrangements. There are several ways to illustrate their variability, but I will share one framework that we have found useful in our VBC consulting practice:
Source: Health Care Payment Learning & Action Network (HCP-LAN) APM Framework and RBC Capital Markets
It is fair to say that the number of resources in most health plans and providers focused on VBC dwarfs the resources focused on SDoH and health equity. Our premise is that instead of competing priorities, VBC and SDoH focus can be brought together for the ultimate benefit of reducing health inequities AND impacting healthcare costs. VBC offers a tremendous opportunity to propel the capture and measurement of SDOH data by including these types of measures as part of the contract structure. Perhaps more importantly, VBC also offers an opportunity to incentivize actions taken to address social determinants leading to better health outcomes and greater health equity. Ultimately, Payors and Providers will devote more attention and resources to what is incentivized.
Let me provide some examples of what this could look like. It is accepted that housing insecurity in the Medicaid population leads to suboptimal patterns of utilizing healthcare resources. Incentivizing the capture of this information in a value-based contract with urgent care and primary care providers is an important first step. A number of Medicaid MCOs have taken this step, but the important next step is to create contractual incentives for real-time communication of that housing issue to the relevant entity who can address this issue – whether that be the MCO or another entity charged with addressing housing issues. Ultimately, the Payor can then analyze the longitudinal utilization of that patient to determine how addressing the housing issue impacts the pattern of utilization and healthcare cost for that patient as well as the cohort of patients with similar housing issues.
A second example might be found in the Medicare population related to the social determinant of food scarcity or food deserts. Many of these individuals receive home-based services either from a nurse or other caregiver. These home-based visits present unique opportunities to capture this critical information about food needs, especially as the data capture is incentivized by the VBC with the parent provider organization. As in the Medicaid housing example, the most powerful impact will come by creating incentives related to real-time communication of the food issues so that they can be addressed. This has the added benefit of increasing the patient’s perception of the value of the home provider as the food issue is addressed.
Fundamentally, this proposal is marshaling the current momentum (and resources) from VBC to give attention to identifying and addressing social determinants. Providers will devote more attention and resources to activities that hold a financial incentive. This has been well proven with the long-time inclusion of quality measures in VBC. These quality incentives include both data capture and “gap closure” – as is suggested for SDoH.
My colleague at CWH Advisors, Dr. Eric Olmsted, has done much work in this area. Part of his work has focused on expanding the range of SDoH from Z-codes to proxy variables that can reflect social determinants. For example, zip code data can be used to determine proxy factors such as distance to PCP, Internet access, and access to transportation. His work has focused on testing these proxy variables for specific health outcomes known to be associated with social determinants. Dr. Olmsted has also identified that machine learning techniques can be used to identify ‘best’ proxy variables. Nevertheless, the need for SDoH data capture remains an important issue and so does the need to measure the effectiveness of intervention using SDoH data to impact health inequities.
An additional opportunity lies with providers using their data to identify relevant equity issues in their populations. This might include some of the proxy measures as identified in Dr. Olmsted’s work. There is tremendous opportunity for providers to demonstrate value to payors through robust data analysis which then could be translated into measures incentivized in value-based contracts. This offers the benefit of providers initiating VBC terms as opposed to merely being reactive to the boilerplate VBC of some payors.
In conclusion, the goal is not just to identify SDoH but to make measurable progress in identifying these factors specific to a given population. We need to move from broad agreement that social determinants are an important aspect of designing intervention to actually impacting these factors and thus reduce health inequities. Putting incentives into the design and execution of SDoH interventions through VBC can make this a reality.
About Paul Barnes
Paul Barnes is a seasoned healthcare executive, having over 30 years of senior executive experience with both managed care and provider organizations. He has extensive experience with fast growth, innovative companies in both operational and business development roles. He has held leadership roles in both physical and behavioral health organizations with a strong interest in their integration. Paul has a Ph.D. in Clinical Psychology with practice experience in community mental health and child psychology.
