Yesterday, we looked at how Medicaid accountable care organizations (ACOs) are attempting to address social determinants of health (SDH) by incorporating social services into their service delivery and financing models – Are Health Plans The Future Of Social Service Funding?. So where are the other payers in addressing these issues? Health plans appear to be experimenting with a range of approaches. And, while the Medicare program has been on a steady path to adopting value-based purchasing (see Medicare Bets Big On Pay-For-Value and How Prepared Are Health & Human Service Provider Organizations For Value-Based Reimbursement?), there is also a plan to incorporate SDH into those value-based payment models.
In June of 2013, the Medicare Payment Advisory Commission (MedPAC) recommended that CMS use two methods of reporting – one for public reporting and another for financial incentives. Readmissions rates for public reporting would remain unadjusted for socioeconomic disparities and hospitals would be compared only to hospitals with a “similar patient mix.” Additionally, a National Quality Forum (NQF) panel recommended that SDH factors should be included in risk adjustment if a connection can be made between that SDH and a specific quality metric.
To address these requests, the Department of Health and Human Services (HHS) asked the Institute of Medicine (IOM) to provide a definition of SES that identifies both the social factors in question, and could be applied to Medicare quality measurement and payment programs. In addition, IOM was tasked with identifying methods to apply this knowledge to quality measurement/payment methodologies. The IOM has completed the initial framework report, Accounting for Social Risk Factors in Medicare Payment: Identifying Social Risk Factors, in which it identified five social risk factors and a sixth “independent” risk factor:
- Socioeconomic position
- Race, ethnicity, and cultural context
- Social relationships
- Residential and community context
- Health literacy (independent risk factor)
How these factors will be incorporated in value-based purchasing isn’t clear at this point, but it is safe to assume this is in the future of health care financing. It’s the very “glacial” nature of Medicare – slow to move, but changing everything in its path. Our next step comes in October 2016 when the Secretary of Health and Human Services owes Congress a report on the effect of socioeconomic status (SES) on quality and resource use in Medicare. I expect this could eventually lead to some kind of payment adjustment – but only time will tell.
The strategic issue for executives of health plans, care coordination programs, and health and human service organizations is how to get ahead of the curve. Our upcoming issue of the OPEN MINDS Management Newsletter will focus on the cutting edge thinking about how to address these issues. For a preview of some of the emerging frameworks, check out Community Strategies For Addressing Health Equity & Social Determinants Of Health and Key Elements For Addressing Social Determinants Of Health.
For more on expanding your concept of innovation to address this big strategic issue, join me on June 8 at The 2016 OPEN MINDS Strategy & Innovation Institute for the session, “What Are The Challenges To Innovation In Serving Complex Consumers? A Town Hall Discussion On Overcoming The Barriers To Change,” featuring OPEN MINDS senior associate Joseph P. Naughton-Travers; Kenneth R. Weingardt, Ph.D., Scientific Director, Center for Behavioral Intervention Technologies & Professor, Northwestern University; Bruce C. Nisbet, President & CEO, Spectrum Human Services & Health Home Partners of WNY, LLC; and Peter O’Neill, Associate Director of Reimbursement and Health Policy, Neuronetics, Inc.