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Changes in healthcare financing are requiring health systems to address social factors that directly impact patients’ health. 

 As providers like hospitals and physicians increasingly are rewarded and penalized based on value of the care they provide, they do not want to be punished for factors beyond their control.

The Challenge

Social determinants, such as individual and community behaviors, economic circumstances, and environmental factors, can influence health costs and outcomes, despite being outside the control of the health system.

Stakeholder Concerns

Stakeholders have raised concerns that current Medicare quality measurement and payment programs, and value-based programs (VBP) that do not account for social risk factors may underestimate the quality of care provided by providers disproportionately serving socially at-risk populations. The poorer average performance among providers disproportionately serving socially at-risk populations combined with the fact that they have fewer resources has raised concerns that Medicare’s VBP programs may potentially increase disparities.

The Role of Payment Reform

Although VBP programs have catalyzed health care providers and plans to address social risk factors in health care delivery through their focus on improving health care outcomes and controlling costs, the role of social risk factors in producing health care outcomes is generally not reflected in payment under current VBP design. This misalignment has led to concerns that trends toward VBP could harm socially at-risk populations. Providers disproportionately serving socially at-risk populations are more likely to score poorly on performance/quality rankings, more likely to be penalized financially, and less likely to receive bonus payments under VBP. VBP may be taking resources from the organizations that need them the most.

Social Risk Factors and Outcomes

Beneficiaries with social risk factors had poorer outcomes on many quality measures, including process measures (e.g., cancer screening), clinical outcome measures (e.g., diabetes control, readmissions), safety (e.g., infection rates), and patient experience measures (e.g., communication from doctors and nurses), as well as higher resource use (e.g., higher spending per hospital admission episode). This was true even when comparing beneficiaries at the same hospital, health plan, ACO, physician group, or facility. Dual enrollment (enrollment in both Medicare and Medicaid) was typically the most powerful predictor of poor performance among those social risk factors examined.

The Great Debate

On one side of the debate are supporters of the existing policy to exclude socioeconomic factors from risk-adjustment models in order to maintain the visibility of differences in health outcomes for groups with different socioeconomic characteristics. The opposing argument supports controlling for socioeconomic factors to avoid disproportionately penalizing hospitals that care for a large number of patients from disadvantaged backgrounds and communities. The question underlying the debate is centered on whether the quality of care received in the hospital can influence the portion of the patient’s risk of readmission that is attributable to his or her socioeconomic circumstances.

Meet the First “Social” ACO Paving the Way to Accountability

Commonwealth Care Alliance (CCA) is the nation’s first Social ACO. CCA was an early pioneer in developing fully integrated models that address physical and behavioral health in tandem with social needs. More than a decade ago, CCA developed a delivery and financing approach that is rooted in community-oriented principles and that integrates medical and behavioral health spending with social services in the form of long-term services and supports (LTSS).

Today, CCA cares for almost 19,000 individuals who are dually eligible for Medicare and Medicaid. Patients have substantial disabilities, and many are frail elders. They are poor and often disenfranchised. Some are homeless, and many are homebound. Nearly 80 percent of members have a behavioral health disorder alongside their complex physical illness.

As a fully integrated health plan and delivery system, CCA has had the unique opportunity to develop a revolutionary care model, with resulting lessons for stakeholders across the nation. The model of person-centered, community-based care for the most complex patients is grounded in the concepts of comprehensive care coordination and enhanced primary care. 

The Ecosystem of the CCA Model  

CCA’s care model is based upon engaging each member to identify their comprehensive human needs, including medical, behavioral health, and social, and making the connection between disease states, the traditional delivery system, and each person’s ecosystem. Each CCA member is assigned a Care Partner - a member of CCA’s care team who builds longitudinal, trusting relationships with members.

Comprehensive “Human Integration” Care Plans

Within the first weeks of enrollment, member needs related to social supports are documented directly in each member’s comprehensive care plan alongside medical and behavioral health information. The Care Partner then leverages a comprehensive team of clinical and non-clinical staff, as well as community partners - in particular, CCA relies heavily on community peers and health outreach workers - to walk hand-in-hand with the member as he or she accesses various care systems. This human integration is integral to providing members with care that is tailored to their needs in consistent, systematic ways.

Fully Integrated Financing Through Global Capitation

Full financial integration is the single most powerful aspect of social ACOs. In particular, the ability to directly balance community-based investments with acute care savings allows greater investment in primary care and social services. In the zero sum game that health care traditionally represents, this forced redistribution through capitation is likely to be the primary mechanism through which we can rebalance spending on medical versus social factors.

The core components of CCA’s care and financing model demonstrate opportunities for emerging social ACOs and for policymakers.

Addressing Social Risks in Medicare Payment

In a report by the National Academies of Sciences, Engineering and Medicine -- the latter formerly known as the Institute of Medicine -- titled Accounting for Social Risk Factors in Medicare Payment identified ways that Medicare could incorporate several social risk factors into a value-based payment model. The authors make detailed recommendations about data CMS could begin collecting to bridge the gap between patients' social conditions and their health outcomes.

Most of the data relate to demographics such as ethnicity, education, marital status and income that could be collected when patients apply for Medicare. Education data, which CMS does not currently collect, might indicate whether patients can access and understand health information, make proper decisions about their health, and be an advocate for healthy behaviors.

Other data sources are "neighborhood deprivation" measurements that provide snapshots of factors such as transportation options, walkable spaces, health care availability and violence. Housing quality is a particularly important factor in patients' health.

Heading Into a New Era

The subject of the socio-economic status of patients and readmission penalties has been a controversial topic. CMS argues that adjusting for income, race and ethnicity and geography might lead to a two-tiered health system that allows lower-quality healthcare for certain patients. Congress recently forced the agency's hand on its hospital readmissions reduction program. The 21st Century Cures Act signed into law in December, requires CMS to adjust penalties based on the proportion of a hospital’s patients identified as dual-eligible beneficiaries, or those that quality for both Medicare and Medicaid. The law states that the HHS secretary “shall assign hospitals to groups” and apply “a methodology in a manner that allows for separate comparison of hospitals within each group.” Those groups would be based on hospitals' overall proportion of dual-eligible individuals. Details are still forthcoming.

For further information on Value-Based models addressing socio-economic risk factors, see our story in this issue titled: New ACO Focuses On High-Rick Patient Population page 36 Remington Report March/April 2017

Author: Lisa Remington is President of the Remington Health Strategy Group

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