A new report by AcademyHealth and the Robert Wood Johnson Foundation identified three emerging challenges in establishing long-term success in payment and delivery system reform, at least one of which raises some amount of controversy and directly concerns issuers.
The three challenges the report identified include: Aligning alternative payment with clinician compensation; Repurposing hospital resources; and considering social determinants of health in payment reform models.
The third item includes consideration of whether to adjust healthcare quality measures, and therefore provider payments, based on socioeconomic factors that impact patient health.
A national controversy
"There is strong disagreement nationally as to whether it's appropriate to adjust quality measures for the socioeconomic status of patients," Michael Bailit, president of Bailit Health Purchasing and one of the study authors, tells Healthcare Dive.
"There are some that sat yes, it's the right thing to do because it's more difficult to deliver high-quality healthcare and maintain a good health status for people of low income," Bailit says. However, "there are others who say we shouldn't set a lower standard for poor people than we do for everybody else in terms of quality of care."
This is one of the two main reasons why socioeconomic risk adjustment is not done, Bailit says.
The other reason is that healthcare organizations typically don't have sufficient administrative data to assess the socioeconomic status of a patient, Bailit says. A patient's a zip code may provide some indication, for example, but organizations do not have the data to truly assess factors such as job security, housing security, hunger, etc. "Those things aren't captured in databases," he says.
While many payers and providers may have individual opinions on the subject, most of the public discussion has taken place in the quality measurement world, Bailit says.
The National Quality Forum put out a report last summer that said risk-adjusting outcome measures is appropriate in some instances, and the group developed guidelines for determining when it is an appropriate policy.
However, the National Committee for Quality Assurance then wrote that it disagrees with that recommendation.
How insurers are responding
As for insurers, Bailit notes that during RWJF's payment reform discussions, a representative from Blue Cross and Blue Shield of Massachusetts said that they specifically do not support adjustments for socioeconomic status because they do not believe there should be lower healthcare expectations for those members. In addition, when the company profiled its providers, it found that some of their providers that had achieved the highest quality scores also had some the lowest socioeconomic status among their patients.
At the same time, Bailit points out that in some sense, quality measurements already do account for differences in patient populations. When providers or health plans are evaluated for their quality, it's commonplace for them to be held accountable for benchmarks that distinguish populations based on whether they are commercially insured, or insured by a Medicaid managed care plan—"So that's not quite socioeconomic status adjustment, but it certainly is stratification along lines that you would expect to see some differential in socioeconomic status," Bailit notes.
"I think there are a lot of mixed feelings and mixed practices when it comes to this topic," Bailit says.
Bailit suggests the industry is likely to see healthcare organizations experiment with a variety of approaches, but that socioeconomic risk adjustment is unlikely to go mainstream unless it becomes supported by further research on the impact of socioeconomic status.
"If socioeconomic status is found to be a strong predictor of quality, that might lead toward more adjustment, but we don't yet have that body of knowledge," Bailit says. "I think there's a lot more measurement work that will have to be done before there are profound changes in policy to widely adopt it."
Ultimately, the specific issue of risk adjustment is less likely to impact the success of payment reform than it is addressing socioeconomic influences on health, Bailit suggests.
Furthermore, the decision on whether to implement socioeconomic risk adjustment is unlikely to have a significant impact on insurers.
"The adjustments are all relative, so it has a net-zero financial impact on the insurer," Bailit says. "It would be work for insurers to operationalize such adjustment, so that would cause them to incur some cost, but I don't think there's a big bottom line impact."