The right business incentives can make health care fairer
Health care organizations have known for decades that minority and disadvantaged populations often have poorer health outcomes and receive less-than-adequate care. Yet, health disparities remain as pressing a problem as ever.
Health care organizations have known for decades that minority and disadvantaged populations often have poorer health outcomes and receive less-than-adequate care. Yet, health disparities remain as pressing a problem as ever.
Providers want to do right by every patient, but a lack of financial incentives is a major barrier to achieving health equity. Most payers and providers are juggling so many issues directly related to their bottom line that most are not making reducing disparities a priority.
Changing the way we pay for health care could make a difference—if it's done right. We have focused on five ways that governmental and private payers can help providers make equity work:
Require health care organizations to report clinical performance data stratified by race, ethnicity, and socioeconomic status. Such reporting enables payments based on reductions in disparities. It also provides a picture to providers so they understand the immediacy of the problem and become motivated to solve it.
Incentivize preventive care and primary care. This means implementing more aggressive shared savings plans, in which providers bear some financial risk for preventable hospitalizations and emergency department visits. It means paying more for primary care and preventive care, which is currently under-reimbursed, and encouraging partnerships between clinical and non-clinical sectors, such as urban planning and education, to address the root causes of health disparities.
Incentivize the reduction of health disparities with equity accountability measures in payment programs. Efforts to increase overall care quality don't necessarily reduce disparities. The Centers for Medicare and Medicaid Services (CMS) and other payers should provide financial bonuses to those health care organizations that improve the care and outcomes of populations suffering from health disparities such as racial and ethnic minority patients and people of lower socioeconomic status.
Align equity accountability measures across public and private payers. Efforts to reduce disparities will be stronger if public and private payers convene and decide on the best measures of equitable care and outcomes. It might be both productive and fair, for example, to reward both high absolute levels of care and health outcomes for minority populations as well as improvement in these metrics over time. Care providers will then have a consistent set of expectations for most of their patients.
5. Assist safety-net organizations. CMS and other payers should support providers who care for the most disadvantaged populations with both financial and technical assistance.
Experiments with providers and payers in a variety of settings are underway to test innovations, such as group payment incentives for reducing disparities.
If the right reporting guidelines and incentives can be built in to the next generation of health information technology, we can move closer to the systematic improvement of reducing health disparities that everyone wants to see.
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Marshall H. Chin, MD, MPH, the Richard Parrillo Family Professor of Healthcare Ethics at the University of Chicago, is director of Finding Answers: Solving Disparities Through Payment and Delivery System Reform, a program office of the Robert Wood Johnson Foundation. This article is based on the paper, "Creating the Business Case for Achieving Health Equity," recently published in the Journal of General Internal Medicine.
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